Economics
Puerto Rico’s Record Restructuring Seen Surviving Junk Rating
- Electric utility needs investment-grade rating under pact
- Needed rating deemed unlikely after commonwealth defaults
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The fate of the prototype for Puerto Rico’s debt-restructuring effort hinges on winning an investment-grade credit rating on new bonds investors have agreed to accept in exchange for providing relief to the island’s main electric utility.
While that may appear to be an arduous task for an agency already in technical default, it may not matter in the long run, according to two people involved with the negotiations who declined to be identified because the talks are private. After two years of negotiations, creditors have too much at stake to let the Puerto Rico Electric Power Authority’s $9 billion restructuring unravel, they said.