Puerto Rico’s government has reached a key debt restructuring deal with a group that bought bonds issued by the U.S. territory’s power company.
The deal announced Friday is expected to reduce some of Puerto Rico’s Electric Power Authority debt by 33 percent as the company prepares to privatize the energy generation.
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The deal also was reached with bond insurer Assured Guaranty Corp. and calls for a fixed transition charge of 2.7 cents per kilowatt hour that will rise to 4.5 cents. The increase would be reflected in customer’s bills as Puerto Ricans decry austerity measures.
A federal control board that oversees the island’s finances said the plan would save about $3 billion in debt service payments over the next decade.
The deal has to be approved by a federal judge.
