Prepa Debt Insurers Said to Consider Denying Extension of Pact
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The companies that insure debt of Puerto Rico’s electric utility are considering blocking an extension of a forbearance agreement with creditors that’s set to expire this week, according to two people with knowledge of the talks.
Ending the accord would allow creditors, including investors holding the junk-rated agency’s $8.6 billion of debt, banks and the insurers, to turn negotiations with the utility into a legal battle. The power provider, known as Prepa, has used reserves for debt payments, a breach of bond covenants. A judge could push the agency to replenish those funds.