Solus Alternative Asset Management LP took over a $146 million loan issued by Puerto Rico's cash-strapped power utility from a division of Citigroup Inc., according to documents published by the island's development bank.
Solus, a New York-based hedge fund that invests in distressed debt, signed the latest extension of an agreement between the Puerto Rico Electric Power Authority and its lenders that's keeping the energy producer out of default, a copy of the agreement dated April 30 and posted on the website of the Government Development Bank shows. Signers of the forbearance pact attest that they hold a $146 million loan issued by the utility, known as Prepa.
A representative for the Puerto Rico office of Citibank N.A., a division of Citigroup that provides retail banking services, had signed the original forbearance agreement in August and two amendments to the pact this year, according to copies of the documents on the GDB website. Reuters earlier reported that Citi sold the loan to Solus.
An e-mail message left outside of business hours for Solus wasn't immediately returned. Robert Julavits, a spokesman for Citigroup, declined to comment. David Millar, a New York-based spokesman for the GDB, didn't immediately respond to an e-mail seeking comment.
Solus is among a group of asset managers that have signed a separate pact that agrees to forbear on the utility's more than $8 billion of bond debt, according to copies of the agreement. Ten other investors including hedge-fund firm Marathon Asset Management, whose chief executive officer has touted the investment, have signed the original agreement or extensions of it. The bondholders, along with three bond insurers, own at least $4.99 billion, or 60 percent, of Prepa's bonds, according to the documents.
The current forbearance agreement expires June 4.