PREPA Bondholder Group Comments on AAFAF Rejection of $1 Billion Loan Offer

NEW YORK–(BUSINESS WIRE)–The Puerto Rico Electric Power Authority (PREPA) Bondholder Group today
commented on the statement from the Puerto Rico Fiscal Agency and
Financial Advisory Authority (“AAFAF”) rejecting the Bondholder Group
members’ offer of a debtor in possession (DIP) financing loan to PREPA
including $1 billion in new cash from the bondholders, as well as relief
on existing bonds.

Stephen Spencer of Houlihan Lokey, the PREPA Bondholder Group’s
financial advisor, said:

“We are disappointed by AAFAF’s and the Governor’s outright rejection of
our loan offer without any discussion or counter-proposal. We sincerely
believed our loan would have helped PREPA finance its recovery and
rebuilding efforts as quickly as possible in the wake of two terrible
hurricanes.

This offer was designed to support PREPA’s liquidity with new, immediate
low-cost financing – with an interest rate set materially below market –
and substantial debt service relief, including a permanent reduction in
outstanding debt. After a lack of communication from PREPA, we wanted to
ensure that they knew funding was available if needed. Importantly, we
believe this offer would have helped, not hurt, PREPA’s ability to
obtain Federal disaster funding relief based on the post-hurricane
recovery experiences of other electric utilities such as Entergy New
Orleans and the Long Island Power Authority, and with expanded capital,
would potentially reduce the time frame to restore power to the Island.

Our group’s members include firms that have had relationships in Puerto
Rico for many decades. We are all concerned with the well-being of the
Americans that live in Puerto Rico and we continue to look for ways to
engage with the Commonwealth and work collaboratively in the ongoing
recovery effort.”

Contacts

Media:
Sloane & Company
Dan Zacchei, 212-486-9500
dzacchei@sloanepr.com
or
Joe
Germani, 212-486-9500
jgermani@sloanepr.com