Puerto Rican power utility PREPA and its creditors have reached a new deal to restructure $8.9 billion in debt through new bonds with longer maturities, the U.S. territory's government announced yesterday, Reuters reported.
Puerto Rico in Distress
Video Features
ABI Analysis
Moody's Investors Service yesterday lowered ratings on $13 billion of Puerto Rican bonds, including debt from the U.S. territory's now-defunct former fiscal agent, the Government Development Bank (GDB), Reuters reported.
Puerto Rico's federally appointed financial oversight board scheduled mediation in debt restructuring talks between the U.S. territory's general obligation bondholders and holders of its so-called COFINA debt, which is backed by sales tax revenue, the board said in a letter to the creditors on Thursday, Reuters reported on Friday.
As the debt started piling up and Puerto Rican leaders started getting desperate, commonwealth officials started making bigger and bigger promises to prospective bondholders, according to a Washington Examiner commentary today.