PREPA

El Acuerdo de Bonistas de la AEE

El acuerdo del Ad Hoc Group (que posee aproximadamente el 35% de los bonos en circulación de la AEE) con la AEE conlleva lo siguiente:

  • El Grupo Ad Hoc de bonistas intercambiará todos sus bonos de rentas por nuevos bonos titularizados(securitization notes) que deberán obtener calificación crediticia de “investment grade”y representarán el 85% del valor de los títulos que intercambian.

 

  • Los bonistas  tendrán la opción de recibir (i) bonos de titularización (securitization bonds)que pagarán un interés en efectivo a una tasa de entre 4.0% y 4.75%, dependiendo de la calificación crediticia que reciban(“Bonos opción A”) o (ii) bonos de titularización convertibles (convertible capital appreciation securitization bonds) que capitalizaran intereses durante los primeros cinco años a una tasa de entre 4.5% y 5.5%, y pagaran intereses corrientes no capitalizables y en efectivo a partir del quinto año (“Bonos opción B”).

 

  • Los Bonos opcion A pagaran únicamente intereses durante los primeros cinco años y los Bonos opción B capitalizaran intereses pero no recibirán pagos de intereses en efectivo durante los primeros cinco años. Todos los bonistas no asegurados tendrán la misma oportunidad de participar en el canje. 
  • El Ad Hoc Group de tenedores respaldará, conforme a términos que serán acordados de buena fe, un financiamiento que le permitiría a la AEE adquirir en efectivo los bonos que poseen los acreedores que no suscribieron los acuerdos de indulgencia.

 

Esto lo que quiere decir es que el 35% de bonistas van a cambiar sus bonos. Sugiere que la AEE buscará financiamiento para comprar el resto de sus bonos, obviamente al precio de Mercado (como 50% de su valor), pero no puede obligar a los tenedores de estos bonos a venderlos a ese precio. Obviamente estos bonistas quieren el 100% de su valor o el pago de la obligación. O sea, que este acuerdo no es ni siquiera con la mayoría de los bonistas y claramente no obliga al resto. Falta mucho por recorrer.

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PERCEPTION IS EVERYTHING PART III, YET ANOTHER IMPORTANT UPDATE

Someone, who shall remain nameless, sent me an email mentioning the name of David J. Wermuth. Upon a short internet search, I found out he is a Senior Principal and the General Counsel of Stone Point and a member of the Investment Committees of the Trident Funds. He used to work for Cleary Gottlieb, PR’s premier restructuring law firm, and is a director of a number of portfolio companies of the Trident Funds, including Freepoint Commodities LLC and Millstein & Co.

Again the three names, Freepoint Commodities LLC who negotiated a billion dollar fuel contract with PREPA, Stone Point who owns pat of Freepoint and Millstein & Co., who’s principal is also owner of Millco Advisors who is involved in the PREPA restructuring and will receive a $9 million bonus if the electric utility restructures by December 31, 2015. This stinks to high heaven.

Perception is Everything

The media has told us that PREPA has made a deal with Free Point Commodities, LLC, to buy fuel for its plants. It is clear from PREPA’s press release, that this contract was obtained through negotiations, not through a bidding process. So far, so good.

The problem is that Stone Point Capitol has investments in Free Point Commodities, LLC, AND in Millstein & Co., The problem is that Jim Millstein is also is the Chief Executive Officer of Millco Advisors, LP, and upon information and belief, also of Millstein & Co. The former has had many contracts with the PR Government Development Bank as a restructuring advisor. Mr. Millstein was also the MC of the PR Government’s presentation of Dr. Anne Krueger’s report earlier this year, see.

This information begs the question, is there some impropriety on this? I don’t know, but Millco Advisors’ contract clearly states in the 23rd paragraph:

Millco-contract

The Consultant certifies that it has received copies of (a) Act No. 84, enacted on June 18, 2002, as amended, which establishes the Code of Ethics for Contractors, Suppliers and Applicants for Economic Incentives of the Executive Agencies of the Government of the Commonwealth of Puerto Rico and (b) the Government Ethics Law, Act No. 1, enacted on January 3,2015 as amended from time to time, and its implementing regulations. The Consultant agrees that it, as well as all personnel providing services under this Agreement, will comply with such acts.

This means the Ethics Office of Puerto Rico would have jurisdiction over this issue and its head, attorney Zulma Rosario, has a well-deserved reputation for fairness and zealousness in fulfilling her duties. A violation of the PR Ethics law would entail possible civil and criminal liabilities for Millco Advisors or Mr. Millstein or both.

millco stonepoint

AEE ANUNCIA NUEVOS CONTRATOS DE COMBUSTIBLE Y GAS NATURAL QUE PROVEERAN AHORROS EN LAS OPERACIONES DE TRANSFORMACIÓN DE $50 MILLONES EN ECONOMÍAS ANUALES Y TÉRMINOS FINANCIEROS FAVORABLES