January 11, 2018 / 1:00 AM / 10 days ago

Puerto Rico fiscal plan revision delayed until Jan. 24

NEW YORK (Reuters) - Puerto Rico’s federally-appointed oversight board on Wednesday granted a two-week extension for the bankrupt island’s government to deliver a revised blueprint for its fiscal turnaround.

The board said in a statement that the turnaround plan, initially due on Wednesday, will now be due on Jan. 24. Fiscal plans for Puerto Rico’s debt-laden power utility, PREPA, and sewer authority, PRASA, were extended to the same date.

Puerto Rico, burdened by $120 billion in combined bond and pension debt, filed the largest U.S. municipal bankruptcy in history last May. Its finances are under the management of a seven-member board appointed by federal lawmakers.

The fiscal plan, which requires approval by the board, is meant to forecast Puerto Rico’s financial standing over several years, and serve as the basis for debt restructuring talks with creditors. Puerto Rico delivered such a plan last year, but the board called for revisions after Hurricane Maria battered the island in September, killing dozens and decimating local infrastructure.

The new plan is to account for economic losses from Maria, with bondholders bracing for increases to projected repayment cuts. Even before the storm, the fiscal plan did not bode well for bondholders, forecasting just $800 million a year available to service debt - around a quarter of what Puerto Rico owed.

According to the board’s statement on Wednesday, Governor Ricardo Rosselló initially sought an extension only for the PREPA turnaround plan. But the board extended all three “to ensure alignment of the assumptions and plans,” the board said in a letter to Rosselló, published along with its statement.

Reporting by Nick Brown; editing by Diane Craft

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