Judge sides with PREPA bondholders on timing

U.S. District Court Judge Laura Taylor Swain sided with Puerto Rico Electric Power Authority bondholders on the scheduling of the remainder of the authority’s bankruptcy with confirmation hearings expected in early March.

Bondholding investment firms and bond insurers had argued for more time to conduct discovery, inform bondholders, vote on the current plan, and respond to Oversight Board filings. The board asked the judge to schedule and the Palmas del Mar Country Club — were issued in 2000 and 2011 through the Puerto Rico Industrial, Tourist, Educational, Medical, and Environmental Control Facilities Financing Authority (known as AFICA).

The restructuring will mean bondholders and the GDB will get pro-rata shares of a $10.5 million cash payment, after bond trustee fees are paid. The restructuring will resolve the letters of credit and Coco Beach Golf & Country Club bonds.

The Palmas del Mar Country Club, with an assessed value of $4.2 million, is collateral on the Palmas bonds.

Bondholders, but not the GDB, were given the opportunity to vote on the deal, consistent with the Puerto Rico Oversight, Management, and Economic Stability Act.