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IEEFA and partners renew call to write off Puerto Rico bond debt as part of restructuring plans to ensure low prices, resilient grid

April 21, 2022

April 21, 2022 (IEEFA)—The Puerto Rico Electric Power Authority (PREPA) is entering another round of debt restructuring negotiations, but IEEFA believes the new arrangement is set up to fail given current mediation and underlying assumptions.

At a press conference hosted by UTIER (Puerto Rico Union of Electrical and Irrigation Industry Workers), CAMBIO and Frente Ciudadano para la Auditoria de la Deuda this afternoon, IEEFA called for a new restructuring agreement that realistically accounts for the island’s economic prospects and invests in renewable energy.

On April 7, IEEFA wrote a letter calling for the money owed to bondholders by PREPA to be written off as a loss as Puerto Rico looks to restructure the authority’s $8 billion debt. Today’s event reiterated the need to write off the debt to keep electricity rates low and ensure the grid is able to improve resilience through renewable energy projects.

“I am proposing that the advisors who failed PREPA and failed Puerto Rico—the same ones who failed twice to produce bond deals that could work—come together with their trillion dollars in assets and settle the claims for everyone,” said Tom Sanzillo, IEEFA director of financial analysis. “Companies with assets in the trillions can come up with approximately $4 billion to $5 billion. The money can be used to pay back bondholders and it can establish a way to reimburse small bond holders on Puerto Rico.”

Full Letter: Puerto Rico Debt Letter

Watch the event and see the full remarks here.

 

Author Contact:

Tom Sanzillo (tsanzillo@ieefa.org) is IEEFA director of financial analysis.

Media Contact:

Susan Torres (storres@ieefa.org), +1 (908) 565-3451

 

About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. IEEFA’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

Tom Sanzillo

Tom Sanzillo is Director of Financial Analysis for IEEFA. He has produced influential studies on the oil, gas, petrochemical and coal sectors in the U.S. and internationally, including company and credit analyses, facility development, oil and gas reserves, stock and commodity market analysis, and public and private financial structures. He also examines such areas as community and shareholder activism, institutional investment, public subsidies and Puerto Rico’s energy economics.

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