Puerto Rico's indebted electric power authority PREPA will seek to persuade creditors in a meeting on Thursday to give it more time to restructure its business, according to a government official in Puerto Rico who was briefed on the matter.
At a meeting in New York, PREPA will argue that creditors, who hold over $9 billion of its debt, should extend a forbearance agreement that expires on March 31. Once the agreement expires creditors have the right to accelerate their claims, potentially forcing the utility into insolvency.
The official asked not to be named because the talks with creditors are not public.
PREPA did not return a request for comment.
The creditor group represents 60 percent of PREPA's bondholders and includes large hedge funds such as Blue Mountain Capital and Appaloosa Management, mutual funds Oppenheimer and Franklin Templeton, bond insurers, as well as Citibank and Scotiabank.
PREPA missed a deadline on March 2 when it was supposed to present bondholders with a comprehensive restructuring plan. Ealier PREPA told creditors restructuring would likely take 10 years instead of an expected five years. The creditors did not take action when that milestone was missed.
Ratings agency Moody's has said it expects PREPA to default on or before July 1, the date of it next scheduled debt service payment. PREPA made a bond payment of about $214 million at the start of the year and faces another $400 million payment in July, according to Moody's. (Reporting by a contributor in San Juan; Writing by Edward Krudy; Editing by Lisa Shumaker)
Puerto Rico meets creditors over $9 bln debt load
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