Puerto Rico power company rejects bondholders' debt exchange plan

Puerto Rico's power company has rejected a new proposal from a bondholders group that calls for an $8.1 billion debt exchange amid growing concerns the public agency could be the first one in the U.S. territory to go bankrupt.

The Electric Energy Authority said Thursday that the proposal would not lead to a successful restructuring and does not share the burden of its more than $9 billion debt.

The negotiations between the power company and the bondholders group comes nearly two months after the agency submitted a long-awaited restructuring plan.

The bondholders group in its new counterproposal seeks to privatize generation to lower rates and delay debt payments for $2.5 billion in savings it said could be invested elsewhere by the power company.