BlackRock, Nuveen Asset Management, and Franklin Advisers are threatening to walk away from Puerto Rico’s $9B debt-restructuring plan for its bankrupt power utility, PREPA, after the Trump administration fired nearly all members of the island’s fiscal oversight board. (Bloomberg)
A 2023 deal would have cut PREPA’s $9B debt to $2.6B, but hedge funds and bond insurers opposed it, pushing for better recoveries. If BlackRock and Nuveen defect, nearly 90% of the utility’s debt would be controlled by creditors who resist the plan.
The stalemate threatens to prolong bankruptcy as residents face some of the highest US power bills and chronic outages.