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Puerto Rico Board Warns of Chaos if Utility’s Bankruptcy Is Axed

Sept. 20, 2022, 7:56 PM

The federal board overseeing Puerto Rico’s financial overhaul pushed back against bondholders’ call to dismiss bankruptcy proceedings for the island’s main electricity provider, wary that such a move would quash the utility’s ability to borrow money again and “jeopardize the entire territory.”

Dismissal of the Puerto Rico Electric Power Authority’s (Prepa) bankruptcy “would eliminate the ability to discharge debt necessary to regain market access and would result in chaos,” the Financial Oversight and Management Board for Puerto Rico said in filings Tuesday.

The board’s statement came in response to Prepa bondholders’ push to dismiss the utility’s court-supervised restructuring of its ...