Puerto Rico's Stalled Electric Deal Shows Long Path to Shed Debt
- Lawmakers face Dec. 7 deadline to allow utility to reorganize
- `Little time left' to negotiate on other bonds, Moody's says
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Even before Puerto Rico moves to restructure its $70 billion of debt, the trial run with its electric utility is showing just how hard that will be.
It took more than a year of fitful negotiations for the Puerto Rico Electric Power Authority, known as Prepa, to strike a deal with bondholders, who in November agreed to take losses of 15 percent. The utility is still in talks with MBIA Inc., Assured Guaranty Ltd. and Syncora Guarantee Inc., which insure some of its $8 billion of debt against default. And officials are bumping up against another hurdle: the agreement could unravel if island lawmakers don’t pass needed legislation by Dec. 7.