LA AEE CAE EN CHATARRA!!!! The negative outlook reflects our concern for the utilitys access to the bond markets. Proceeds of the 2013A bonds will cover two years capital investment and 2.5 years interest expense, but PREPAs management expects to issue an additional $1.0 billion after 2015 to complete the five-year investment plan. Exceptionally high debt costs would reduce the impact of other cost-cutting measures, which could lead to weakened credit metrics. The authoritys commitment to reduce its own operating costs and the Puerto Rico governments commitment to honor its financial obligations to PREPA support the rating. Progress in both of these endeavors will be important factors in maintaining the rating during our two-year outlook horizon; not doing so could lead to a downgrade. Moreover, the authoritys goal of reducing its dependence on oil and improving the electricity systems overall reliability and efficiency will be an important component of Puerto Ricos economic growth, and successful execution of the planned conversion and upgrade will also be important factors in maintaining the rating. We do not expect a positive rating action in the next two years.
Posted on: Sat, 25 Jan 2014 23:56:06 +0000
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