PREPA bondholders reject FOMB’s $3 billion settlement proposal
PREPA bondholders rejected the Financial Oversight and Management Board’s newly publicized $3 billion settlement proposal as “unworkable,” opening another adversarial front in the utility’s prolonged Title III plan process. The bondholders said they sought an explanation of the proposal’s basis but received no response before FOMB released it publicly. They also pointed to more than $12 billion of largely unused federal reconstruction funding and maintained that they remain prepared to support an orderly bankruptcy exit, according to Caribbean.
The rejection removes any assumption that the $3 billion offer can anchor a consensual deal with this creditor constituency. Plan negotiations now face a clear fork: improved economics or a contested restructuring path, with further delay threatening to keep PREPA under court protection while reconstruction capital remains undeployed.