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Indybay FeatureRelated Categories: Americas | International | U.S. | Global Justice and Anti-Capitalism | Government & Elections
Puerto Rico and Bondholders Agree on Electric Company Debt Deal
Puerto Rico’s electric utility company (PREPA) and bondholders reached an agreement to restructure $8.9 billion in debt, according to an announcement from the island's government.
The deal still needs approval from a "control" board Congress created as part of debt crisis legislation passed last year.
"The test for any debt deal is whether or not the debt is brought back to sustainable levels," noted Eric LeCompte, who tracks the debt negotiations and leads Jubilee USA, a religious development organization. "It's hard to judge success until all of the debt is brought back to sustainable levels, not just some of it."
Puerto Rico's government says this will save $1.5 billion in debt servicing costs over five years and expects the average electric bill to be reduced by $90 annually.
"Puerto Rico's government is making progress but the entire debt needs to be looked at comprehensively," said LeCompte, who testified to Congress on Puerto Rico's debt plan. "Puerto Rico won't see recovery, let alone economic growth, until the whole debt is restructured."
Jubilee USA Network is an alliance of more than 75 US organizations and 650 faith communities working with 50 Jubilee global partners. Jubilee USA builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA wins critical global financial reforms and won more than $130 billion in debt relief to benefit the world's poorest people. http://www.jubileeusa.org