Bhatia summons PREPA and GDB to explain bond issuance to the Senate

On July 29, 2013, Metro Puerto Rico reported that Senate President Eduardo Bhatia summoned the Puerto Rico Electric Power Authority (PREPA/AEE) and the Government Development Bank (GDB) to explain a $600 million bond issuance they were preparing to place the following week.

Cited were PREPA executive director Juan F. Alicea Flores and interim GDB president José V. Pagán Beauchamp, for a hearing before the Senate Finance Committee (chaired by Sen. José R. Nadal Power).

In separate letters, Bhatia demanded that the Senate receive all documents of PREPA’s Capital Improvements Program and Strategic Plan, to which the proceeds were allegedly destined. “The Senate recognizes that the country today is in a precarious economic condition, so any determination of this kind (the bond issuance) will receive the strictest scrutiny on our part,” the letter warns.

The letter states that with the issuance PREPA’s long-term indebtedness would rise to $9,000 million, and that $600 million “will become a direct burden on all PREPA ratepayers” if approved without analysis or long-term projection.

Summons / proposed issuance is not a disbursement. Projected debt ≠ adjudicated theft.

Source: Metro Puerto Rico. https://www.metro.pr/pr/sin-categoria/2013/07/29/bhatia-cita-aee-bgf-explicar-senado-emision-bonos.html