Puerto Rico Electric trustee gives bond payments, support deal update

By Caroline Salls

Pittsburgh, Dec. 7 – Puerto Rico Electric Power Authority’s power revenue and power revenue refunding bonds trustee provided an update on bond payments and deadlines set in the authority’s restructuring support agreement with an informal group of bondholders, according to a notice released Monday by bond trustee U.S. Bank, NA.

Also, U.S. Bank said a notice of redemption was sent for a further redemption of $5 million of the authority’s series 2015A bonds on Dec. 1.

The trustee also said it may be required to distribute $24 million held in a series 2013A capitalized interest subaccount on or after Jan. 1 if it does not have adequate funds in a sinking fund or otherwise to pay all interest due that date on the bonds. U.S. Bank said there are not currently enough funds in the sinking fund to make the Jan. 1 interest payment.

Under the restructuring support agreement, some or all of the Jan. 1 interest payments would be paid with funding provided to the authority, “but it remains premature to predict whether and to what extent that will occur.”

The trustee said the support agreement includes a Dec. 10 deadline for the authority and monoline insurers Assured Guaranty Corp., Assured Guaranty Municipal Corp., National Public Finance Guarantee Corp. and Syncora Guarantee Inc. to reach a restructuring agreement for insured bonds.

U.S. Bank said “it remains premature to determine the full extent to which the rights of bondholders may be affected by a restructuring transaction that is expanded to include the monoline insurers or if the monoline insurers do not participate.”

In addition, the trustee said a Special Securitization Statute required by the restructuring support agreement has been introduced in the Puerto Rico legislature but has not yet been enacted. The deadline under the support agreement for enactment of the Special Securitization Statute is Dec. 7.

According to the notice, the support agreement also calls for an amendment to the bond trust agreement reinstating limitations upon the remedial powers of the trustee during the support period, but the trustee has not yet been asked to execute that amendment. The amendment execution deadline is Dec. 22.

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