Fuel Line Lenders, in the execution of a Plan Support and Settlement Agreement with the Financial Oversight and Management Board for Puerto Rico in connection with the Title III restructuring of the Puerto Rico Electric Power Authority

On December 1, 2022, the Financial Oversight and Management Board for Puerto Rico announced its execution of a Plan Support and Settlement Agreement with all of the lenders of the fuel line loans of the Puerto Rico Electric Power Authority.  In settlement of the Fuel Line Lenders’ asserted priority, rights and claims, the FOMB agreed it will seek court approval of a plan of adjustment in the PREPA debt restructuring case under the Puerto Rico Oversight, Management, and Economic Stability Act, that will provide the Fuel Line Lenders with an 84% recovery on their approximately $700 million in petition date claims against PREPA, plus certain costs, fees and interest accruals.  The Fuel Line Lenders’ recovery will be in the form of newly issued PREPA bonds upon the effective date of the plan of adjustment, which plan of adjustment will be supported by the Fuel Line Lenders, subject to certain terms and conditions.

Wachtell, Lipton, Rosen & Katz served as legal advisor to the Fuel Line Lenders.