PREPA mediators ask for more time

Bonds

Mediators for the Puerto Rico Electric Power Authority restructuring asked the judge to extend the deal deadline from Sept. 9.

The mediators asked PREPA bankruptcy Judge Laura Taylor Swain Thursday afternoon to extend the mediation, and deadline for a proposed deal, to 11:59 p.m. Atlantic Standard Time, Sept. 16, with the possibility of a further extension to 11:59 p.m., Sept. 30, based on their “assessment of the material progress of the mediation.”

PREPA mediators said they may need another month to complete debt negotiations.

Swain agreed to a request that parties to be given until noon on Tuesday to file objections or other responses to the notice.

Puerto Rico Attorney John Mudd tweeted, “Seems they are close to an agreement in the PREPA plan. Judge will likely grant it.”

The Puerto Rico Oversight Board must submit by the deadline a proposed plan of adjustment, a term sheet for a plan of adjustment, a litigation schedule, or “a declaration or memorandum of law showing cause as to why the court should not consider dismissal of PREPA’s Title III [bankruptcy] case.” 

The current round of mediation sessions started in response to Gov. Pedro Pierluisi withdrawing from a PREPA debt restructuring deal in early March. At that time Swain asked the board to submit a proposed plan of adjustment by May 2.

In response to mediation team requests, she has repeatedly pushed back this deadline.

PREPA has about $8 billion in bond debt and about $1 billion in other debt outstanding. 

While the Oversight Board filed for bankruptcy for PREPA under the Puerto Rico Oversight, Management, and Economic Stability Act in July 2017, there have been talks among some of the involved parties about restructuring PREPA’s debt since summer 2014. 

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