WASHINGTON, July 1 Prices on bonds sold by
Puerto Rico's struggling power authority plummeted on Tuesday as
debt holders worried about receiving a payment scheduled for
The junk-rated Puerto Electric Power Authority (PREPA) bonds
sold for 38.625 cents on the dollar in light afternoon trading,
equal to a 14.243 percent yield.
The island's Government Development Bank has delivered funds
to the bond trustee to cover the approximately $204 million in
principal and $179 million in interest due. But the trustee
could hold on to the money if it sees large expenses looming.
PREPA is considered likely to take advantage of a new Puerto
Rico law allowing public corporations to refinance their debts
as it faces expiring lines of credit, rising fuel prices and a
cash crunch. The situation could rack up costs for the
Since the law was passed, PREPA's prices have fallen,
reaching a record low of 36.875 cents on Monday, for a yield of
14.864 percent. The debt started trade Tuesday morning at 44.25
cents, for a yield of 12.561 percent.
(Reporting By Lisa Lambert; Editing by Chizu Nomiyama)