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Puerto Rico's electric authority gets creditor reprieve to July 31

A power station of Puerto Rico Electric Power Authority, in San Juan.
Ana Martinez | Reuters
A power station of Puerto Rico Electric Power Authority, in San Juan.

Puerto Rico Electric Power Authority, or PREPA, on Monday said the lenders providing it revolving lines of credit have agreed not to exercise their rights to seek certain remedies following a series of ratings downgrades and other recent events that have raised concern about PREPA's financial condition.

Under the agreement with the creditors, PREPA is permitted to delay certain payments currently due until July 31.

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PREPA said it will use that period to continue talks with creditors and evaluate alternatives to improve its financial condition. During that period, all payments owed to employees and suppliers will continue as normal.

Prices on PREPA's 5.25 percent bonds due July 2040 weakened to less than 37 cents on the dollar from Thursday's closing price of 40 cents on the dollar.