Caribbean Business - February 11, 2016

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W E E K O F F E B R U A R Y 1 1 - 1 7 , 2 0 1 6 | V O L . 2 E D I T I O N 5 | W E E K LY $ 2 . 0 0 | © 2 0 1 6 L A T I N M E D I A H O U S E , L L C | C A R I B B E A N B U S I N E S S . P R

State Elections Commission Trimming More Fat

Bond Exchange Plan Hitss Investors Hard

Panama Canal Operation to Diversify With its Expansion

Friends of Court Defend P.R. Bankruptcy Law

Seeking New Cuts to Absorb Shortfall PAGE 6

Trades Big Cuts for Value PAGE 7

New Transshipment Hub in the Works PAGE 22

Stress ‘Fragile’ State of Prepa Deal PAGE 26

COVER STORY

TOP STORY

Lawmakers Mull Bill to Help Prasa Achieve External Financing GDB Says not so Fast With Puerto Rico lawmakers on the verge of approving the “largest securitization in U.S. history” for the P.R. Electric Power Authority (Prepa), another bill seeking the same structure for the P.R. Aqueduct & Sewer Authority (Prasa) is being trumpeted as the utility’s last shot at avoiding a waterrate hike this summer.

aims to jumpstart capital improvement projects now on life support, while avoiding a rate hike to maintain financial stability. After all, Prasa’s board had decided in 2013 to finance a fouryear capital improvement plan (CIP) mostly by issuing debt, but not precisely with the utility’s revenues. With no access to

The Investment Summit

T

Scaling the Acts 20/22 Mountain

he 2016 Puerto Rico Investment Summit kicked off at the Convention Center today, Feb. 11, bringing together executives, attorneys, CPAs, institutional investors, investment bankers and private equity professionals for two days of informative panels on investment opportunities, public officials pitching the latest tax incentives and networking among the attendees. In a way, the yearly forum that began in 2014 has become

a sort of tradition: crowds of wealthy investors, most of them recent arrivals to Puerto Rico, make their way to the conference rooms of a five-star hotel to learn about the latest and greatest tax lures that the Caribbean island has in store for anyone willing to establish a business in Puerto Rico and a place of residence for at least 183 days of the year. It is part of a concerted effort by public officials—particularly the island’s Economic

Development & Commerce Department (DDEC by its Spanish acronym) and its secretary, Alberto Bacó Bagué—to inject much-needed cash and jobs into Puerto Rico’s embattled economy. What began as a trickle of offshore investors coming to the island after Acts 20 and 22 were signed into law in 2012, has now turned into a stream, if not an outright flood, of investment activity. BY DENNIS COSTA PAGES 14-17

Alberto Lázaro, Prasa president House Bill 2786 would establish the Prasa Revitalization Act, whereby a new corporation would be created with the sole purpose of issuing new debt for the utility, backed by a new charge on water bills that would be pledged to cover its debt service. In essence, the bill attempts to help Prasa regain access to capital markets as it desperately

external financing at reasonable terms and not enough revenues to cover for all costs, there is simply no money to fund these projects under the existing rate structure and revenues. At first glance, it would seem that the lifeline measure could be soon on its way. BY LUIS J. VALENTÍN CONTINUES ON PAGE 4


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Caribbean Business - February 11, 2016 by Latin Media House, LLC - Issuu