Puerto Rico’s electric utility, PREPA, is facing higher power costs after the First Circuit ruled bondholders have the legal right to payment at face value of their $8.5 billion claim on utility revenues.
Puerto Rico’s Financial Oversight and Management Board (FOMB) said it intends to introduce changes to the plan of adjustment to allow for payments to PREPA bondholders based on the First Circuit’s ruling.
In this Law360 article, CRA’s Bradley Wendt provides expert commentary on the situation. Wendt analyzes the challenges the ruling pose for the FOMB, citizens, and the likelihood of PREPA incurring more costly debt for equipment upgrades and grid modernization.
