August 31, 2015 / 10:02 PM / 4 years ago

UPDATE 1-Puerto Rico's PRASA secures credit extension - statement

(Adds executive president’s quote, background)

By Jessica DiNapoli

NEW YORK, Aug 31 (Reuters) - A Monday deadline for Puerto Rico’s water authority to repay a $90 million credit facility has been extended until at least Sept. 15, giving it more time to work on a $750 million bond sale.

The bond offering, postponed from the week of Aug. 17 to give wary investors more time to analyze materials, would allow the Puerto Rico Aqueduct and Sewer Authority (PRASA) to pay down the credit facility from Banco Popular de Puerto Rico.

It would be Puerto Rico’s first public bond offering since it failed on Aug. 1 to make a full payment on bonds sold by its Public Finance Corp, a move widely considered a default.

On or before Sept. 15, Bank of America Merrill Lynch is expected to acquire $75 million of the credit facility, with Banco Popular de Puerto Rico maintaining the balance, PRASA Executive President Alberto Lazaro said in a statement.

PRASA will then sign new credit facilities with the banks with Nov. 30 maturities, PRASA spokeswoman Norma Munoz said in an email.

PRASA is observing market conditions and waiting for the right time to price the offering, Lazaro said in the statement.

Puerto Rico is delaying until Sept. 8 the completion of its fiscal reform plan, originally planned to be delivered on Sunday or Monday. The Puerto Rico Electric Power Authority (PREPA) also faces a Sept. 1 deadline to execute its restructuring support agreement.

“Although these are unrelated to PRASA, we decided it was a better strategy to wait for those externalities to occur and take that uncertainty away from our deal,” Lazaro said.

Puerto Rico’s Governor Alejandro Garcia Padilla shocked investors in June by saying he wanted to restructure the island’s $72 billion debt.

Reporting by Jessica DiNapoli; Editing by Chizu Nomiyama and Richard Chang

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