Virgin Islands delegate says financiers support WAPA emergency declaration

Bonds

U.S. Virgin Islands Del. Stacey Plaskett said Thursday that the financial community supports making an emergency declaration for the island’s Water and Power Authority.

Plaskett, the Virgin Islands’ non-voting representative in U.S. Congress, made the statement in a press conference held in St. Croix.

In mid-September Plaskett sent a letter to Gov. Albert Bryan urging him to declare an emergency for WAPA. In the letter she suggested that the authority’s debt may have to be restructured.

U.S. Virgin Islands Gov. Albert Bryan was urged to declare an emergency for the Water and Power Authority.

Plaskett said since writing the letter she has spoken with holders of WAPA’s debt, underwriters of it, bond analysts, and ratings agency professionals about how the Puerto Rico Oversight, Management, and Economic Stability Act is working. The federal government passed PROMESA in summer of 2016 to give Puerto Rico a way to adjust its debts and impose an oversight board over the local government.

Plaskett said those she spoke with expressed support for declaring an emergency at WAPA, she said. Declaring an emergency would allow financial observers to realize that the government has recognized WAPA’s insolvency. That is the first step in dealing with it, she said.

Bryan isn’t admitting the truth of the situation, she said.

Plaskett said she was unsure if a federal court needed to be involved in handling WAPA’s financial problems. She said that WAPA needs to think about getting the U.S. departments of energy and agriculture to changing the terms on their loans to WAPA.

WAPA has $252 million of bond debt outstanding. Total long-term debt is either $550 million or $633 million in the last two months, according to executive director and Plaskett, respectively. Total liabilities including pensions, short-term loans and lines of credit are $1.2 billion.

A spokesman for Bryan didn’t respond to a request for a comment.

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