NEW YORK (Reuters) - Puerto Rico’s government on Friday called moves by creditors of the island’s bankrupt power utility to offer a $1 billion loan a “publicity stunt,” the latest salvo in a public back-and-forth on how to help the utility recover after Hurricane Maria.
As Puerto Rico struggles with near total destruction of its power distribution grid from last week’s storm, the government released a new point-by-point critique of the offer’s terms to the utility, while calling the group’s arguments in favor of the loan “self-serving.”
Hurricane Maria knocked out power to the U.S. territory’s 3.4 million residents and left the Puerto Rico Electric Power Authority (PREPA), which declared bankruptcy in July, scrambling to complete damage assessments. A total restoration of power to the U.S. territory is expected to take months.
The statement, from Puerto Rico’s Fiscal Agency and Financial Advisory Authority, said the government appreciates “sincere expressions of support” from creditors.
“However, the Government will flat out reject and block callous attempts by any group or constituency to leverage off the suffering of the people of Puerto Rico at their most vulnerable moment,” it said.
The exchange between the government and the PREPA bondholder group began on Wednesday when the creditors offered the utility a new $1 billion loan and a discount on a portion of existing debt to help recovery efforts.
The Fiscal Agency first rejected the proposal on Thursday, calling the proposal “not viable” and saying it would hamper the utility’s ability to recover.
Later that day, PREPA bondholder group’s financial advisor, Stephen Spencer of Houlihan Lokey, responded that the group was disappointed by Puerto Rico’s rejection of the offer “without any discussion or counter-proposal.”
The government’s statement Friday criticized that response, saying the bondholder group “continues to grossly mischaracterize the terms” of the proposal and detailing reasons why they believed the proposal was meant to benefit the trading value of PREPA bonds.
The PREPA bondholder group declined to comment on the government’s Friday statement.
Reporting by Stephanie Kelly; Editing by Megan Davies and Mary Milliken