Puerto Rico Electric Power Authority Reaches Deal With Lenders - WSJ

Puerto Rico Electric Power Authority Reaches Deal With Lenders

Monday July 7th, 2014 at 2:28 PM

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July 7, 2014 2:00 p.m. ET

The Puerto Rico Electric Power Authority reached agreements with two banks to defer payment on lines of credit that threatened to burden the cash-strapped utility with $671 million in obligations between now and mid-August.

The power authority reached deals with lenders and "may delay certain payments currently due until July 31, 2014," according to a news release from the authority released Monday. The two lenders are Citibank and Scotiabank de Puerto Rico, a person familiar with the matter said.

The authority said in the news release that it would "use this period to evaluate various alternatives to improve its financial situation."

Puerto Rico has about $73 billion in total obligations, including those owed by its so-called public corporations, and has been struggling with unemployment more than twice the national average and a sluggish economy. Its debt is widely held by mutual funds and individuals, and some analysts worry that the power authority's troubles could escalate into a wider Puerto Rican default and losses for investors nationwide.

Puerto Rico lawmakers last month approved legislation allowing some agencies, such as the island's power, water and transportation authorities, to restructure their debt. Those agencies have a combined $19.4 billion outstanding, according to estimates from Barclays BARC.LN -1.14% Barclays PLC U.K.: London GBp216.05 -2.50 -1.14% July 7, 2014 5:09 pm Volume (Delayed 15m) : 27.68MP/E Ratio 43.21 Market Cap GBp35.88 Billion Dividend Yield 1.85% Rev. per Employee GBp262,765222.50220.00217.50215.009a10a11a12p1p2p3p4p 07/07/14 Puerto Rico Electric Power Aut...07/07/14 Europe Stocks Fall as German I... 07/06/14 IEX Pricing Aims to Drain 'Dar... More quote details and news » BARC.LN in  Your Value Your Change Short position PLC. The law doesn't apply to Puerto Rico's general-obligation or sales-tax debt.

Funds managed by Franklin Templeton Investments and OppenheimerFunds Inc. have challenged the legislation in court, saying the act is a bankruptcy law that "treads on the Congress's exclusive province in enacting such legislation."

Reforming the island's public corporations has become central as the administration of Gov. Alejandro Garcia Padilla tries to jump-start the economy, eliminate budget deficits and reassure investors that the U.S. commonwealth's fiscal position is improving after an eight-year recession.

William Dudley, president of the Federal Reserve Bank of New York, said in a speech last month that large, indebted, corporate-like public entities account for almost 40% of the island's debt.

"For any financial reform agenda to be successful, it must confront this issue head on," he said.

Write to Mike Cherney at mike.cherney@wsj.com

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Puerto Rico Electric Power Authority Reaches Deal With Lenders - Wall Street Journal

Monday July 7th, 2014 at 2:27 PM

Puerto Rican Community In New York - Google News

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Puerto Rico Electric Power Authority Reaches Deal With Lenders Wall Street Journal William Dudley, president of the Federal Reserve Bank of New York, said in a speech last month that large, indebted, corporate-like public entities account for almost 40% of the island's debt. "For any financial reform agenda to be successful, it must ...

Resident Commissioner Pedro Pierluisi will consult with the leadership of the U.S. Congress

He asked to review the fiscal situation

Monday July 7th, 2014 at 11:07 AM

El Vocero De Puerto Rico

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THE SPOKESMAN / Archive

For Yennifer Álvarez Jaimes, EL Vocero - 4:00 am

Resident Commissioner Pedro Pierluisi consult with the leadership of the U.S. Congress their opinion on the possibility of evaluating some extent rescue the imminent insolvency and critical financial state of Puerto Rico.

This was confirmed yesterday, when asked by THE SPOKESMAN Pierluisi, while recalling that "Congress has the power to investigate government actions that impact the U.S. economy, including the health of its financial system, and to consider legislation to safeguard the economic well-being of the nation. "

"It remains to be seen, however, if congressional committees with jurisdiction over such matters as the Committees on Financial Services and the Federal Judiciary and House Committees on the Judiciary and Finance in the United States Senate, decide to investigate the possible impact of the Bankruptcy Act Creole in financial markets, "the resident commissioner.

Pierluisi back tomorrow to Washington, DC and said that "auscultaré feeling in the lead (congressional) regarding the need for Congress to intervene in the management of fiscal and economic crisis facing Puerto Rico."

Pierluisi had shown little optimistic about a possible rescue in an interview with Bloomberg last to declare "I see fertile ground" Thursdays.

In the same report, Bloomberg reporters and Brian Chappatta Michelle Kaske in New York concluded that "any bailout of Congress would be difficult due to anger against federal bailouts of Wall Street and the U.S. auto industry."

Meanwhile, Bloomberg reported that Republicans in the House of Reps in the federal Senate and introduced legislation that would prevent the Treasury Department or the federal rescue municipalities.

"They are intended to cover associations also said Luke Bolar, a spokesman for Republican Sen. David Vitter of Louisiana, who sponsored the measure.

"In no way should the federal government get into the business of bailing out state and local governments that are in red," Vitter said in the Senate in April. "These governments must make tough decisions," he said as reported by Bloomberg.

At the same time, seems to be ruled out a possible aid to the Federal Reserve.

Stephen Myrow, a partner at Beacon Advisors LLC and exoficial Policy Department of the U.S. Treasury, told Bloomberg, which is very little you can do this agency or the Federal Reserve.

"They are looking at the existence of programs to try to identify which funds are available, but the problem with this type of fund is the huge current deficit financing," he added. "The only federal aid available and able to avoid restructuring in theory would be a special federal program. But there is no indication that the federal have any appetite to do that, "said Myrow.

Meanwhile, Jen Friedman, spokesman for the National Economic Council in the White House said in a statement at the same specialized in economics and finance that the Obama administration is working with the government of Alejandro García Padilla medium. At the same time, he acknowledged that "in addition to the hard steps that have been made so far, economic development will be important in the long-term fiscal sustainability of the island."

THE SPOKESMAN tried to get a reaction from the Secretary of the Interior, Ingrid Vila Biaggi or some official García Padilla administration, but at press time no response was obtained. La Fortaleza or the Government Development Bank (GDB) have not answered what has stemmed the disbursement of funds to pay for the $ 417.6 million in bonds Electric Power Authority (PREPA).

While the insolvency of some public corporations such as the ESA, is discussed García Padilla took several free to share with your family days.

Stronghold announced Friday that García Padilla attend the summer meeting of the Association of Governors of the United States from 10 to 13 July in the city of Nashville, Tennessee, and before the conclave will take a few days to share with his wife and their children.

It was also reported that the Secretary of State, David Bernier, he serves as acting governor since last Friday through Sunday, July 13, with the exception of the period from Sunday 6th to Tuesday 8th July, during which the Attorney General Cesar Miranda, will be the acting governor.

Yennifer Álvarez Jaimes, EL VOCERO 

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"Alejandro García Padilla, history will remember you as the executioner of the workers."

There have deployed a large cruzacalle, toward Arecibo to San Juan, which reads: "Alejandro García Padilla history will remember you as the executioner of the workers." (Supplied)

Unionized UIA protest against García Padilla

Monday July 7th, 2014 at 10:16 AM

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By <a href="http://Primerahora.com" rel="nofollow">Primerahora.com</a> 07.07.2014 | 7:15 a.m.

A group of members of the junction Authentic Independent Union (UIA) of the Water and Sewerage Authority (AAA) Occurs in the Monday morning on the bridge of the José de Diego That highway leads to Plaza Las Americas in Hato Rey.

 There have deployed a large cruzacalle, Toward Arecibo to San Juan, que reads: "Alejandro García Padilla history will remember you as the executioner of the workers."

 In an interview With This newspaper, the president of the UIA, Irene Maymí Pedro Said That the demonstration is to "show outrage to Law 66 (Fiscal Sustainability and Government Operations) of" which Takes away rights acquired through collective agreements to Deal with the fiscal crisis .

 "We want to let people know what will happen Alejandro García Padilla to history, as the executioner of workers. Right now there is talk of crises and are opening an office in Colombia at a cost of $ 250,000, "I added.

 Irene Maymí That clarified the UIA is not work stoppage at this time. Not That rule out in the coming days was Decreed a standstill.

 I Also Said That during the day some employees of the AAA will Participate in the event That the Union of Employees of the Government Development Bank (GDB) will perform against the Labor Department to report the Alleged Threats from the employer in dismissing them if They Return not to work. This group has 21 days to indefinite strike.

GDB Employees protest against the Department of Labor

Monday July 7th, 2014 at 10:14 AM

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The Union of Employees of the Government Development Bank (GDB) will manifest in the morning before the Department of Labor to repudiate the Alleged intransigence of the employer to negotiate wage Increases and Report That They sent a letter in Which I Allegedly Threatened firings do not return to work, said Maria Teresa Rodriguez junction president.

"During the most recent attempt by the Union to reach an agreement GDB to end the conflict That has kept for 21 days on the road, this time through the arbitration process the Department of Labor, management GDB Refuses to negotiate with striking employees and, instead , delivered a letter threatening them That If They do not report to work today will be dismissed. All this, Despite The governor promised Alejandro García Padilla That there will be layoffs in the country, "Rodriguez said in a press release.

The Union Leader said the claim made ​​beyond the Law of Fiscal and Operational Sustainability, que will take away vested rights. BGF owes He said the wage Increases That are supposed to give four years ago and there is Alleged That inaction of the employer to apply the collective agreement.

"The Union reaffirms That wage Increases That took more than four years without Receiving are fair and do not Represent a burdensome expense to the Bank or damage Their budget situation. On the Contrary, the junction Represent employees less than 25% of the total payroll expense GDB, With almost 60% of the Bank's employees, "Explained Rodriguez.

Rodriguez reiterated management BGF That Refuses to negotiate. 've Explained that last Tuesday, July 1, I had an appointment in the Department of Labor to begin the process of arbitration. said I did not eat the employer to negotiate and instead handed him the letter That They Were Allegedly Threatened with layoffs.

"The Bank has not Chosen Timely resolve a situation dating from the last administration, giving procrastinated, denoting lack of interest in just Addressing the Demands of the workers. Now I tries to bring this dispute under the recently approved Law 66 indicating That the said statute Increase prohibits any and extra payments, "I said.

Tildan a AGP de “verdugo de los trabajadores”

Monday July 7th, 2014 at 10:10 AM

Diario De Puerto Rico

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SAN JUAN – El presidente de la Unión Independiente Auténtica (UIA), Pedro Irene Maymí dijo el lunes que el gobernador Alejandro García Padilla será recordado como “el verdugo de los trabajadores”, por lo que colocaron un rótulo con ese mensaje en una concurrida vía en San Juan.

“En primera instancia (el verdugo) fue Fortuño con la Ley 7 y ahora es Alejandro con la Ley 66 que es la continuación de lo que comenzó Luis Fortuño”, dijo Irene Maymí en entrevista radial (NotiUno).

Miembros de la UIA instalaron la mañana del lunes un rótulo en el que responsabilizan al gobernador de ser “verdugo de los trabajadores”, esto como parte de las actividades que llevan los sindicatos de las corporaciones públicas en rechazo a la Ley 66 de Sostenibilidad Fiscal. El cruza calle fue colocado en el puente que da acceso de Plaza Las Américas hacia la Autopista de Diego en dirección hacia Bayamón

“El país ya ha tomado conocimiento de lo nefasta que es esta ley para el país. Esto no es solo en contra de los trabajadores públicos, sino que también afecta a los empleados privados… Nuestro mensaje a nuestro pueblo es que esto no se trata de sindicatos ni de empleados públicos. Se trata de empleados, independientemente que sean públicos o privados”, indicó.

“Ciertamente esto no termina aquí. Vamos a llevar los mensajes a otras áreas. No es porque sea Plaza Las Américas, sino porque es un área de las más transitadas”, añadió al reiterar la disposición de los obreros para seguir manifestándose hasta que se entable un diálogo con el gobierno.