U.S. Treasury Department officials have visited Puerto Rico in recent weeks as a deadline approaches for the junk-rated island’s power utility to strike a deal to extend a creditor agreement.
Antonio Weiss, who became a top adviser to the Treasury secretary this year, and Kent Hiteshew, who runs the department’s office of state and local finance, have met with officials in San Juan in recent weeks, Daniel Watson, a Treasury spokesman, said late Monday in an e-mail. The New York Times reported the trips earlier in the day.
“The recent trips by senior Treasury officials to Puerto Rico are part of the Department of the Treasury’s ongoing engagement with the Commonwealth on its fiscal situation,” Watson said. “Federal policy experts have visited Puerto Rico to learn more about the fiscal situation and share their expertise with the Puerto Rican officials that are leading the Commonwealth’s economic policies.”
Treasury officials have been traveling to the territory since at least 2013 to discuss its finances. Puerto Rico, whose bonds are tax-exempt nationwide, has struggled under $73 billion in debt issued by the commonwealth and its agencies. The securities have traded at distressed levels for more than a year on concern that the island won’t be able to repay its obligations.
The Puerto Rico Electric Power Authority, or Prepa, is negotiating with banks, investors and insurance companies to extend loans and gain time to create a turnaround plan. Those agreements end Wednesday.
Prepa faces a $415.6 million principal and interest payment to bondholders July 1, according to New York-based NewOak Capital LLC. Prepa has $236.4 million in reserve, according to a filing by its bond trustee on the Electronic Municipal Market Access website.