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Plan Support Agreement Puerto Rico

In addition, it does not respect the legal rights, priorities and pledges of creditors, in violation of the Puerto Rico Economic Management Act (“PROMESA”),” and, in particular, does not openly comply with basic constitutional protection provisions, tax regime requirements and obligations with respect to general and tax obligations. , critical municipal funding instruments in Puerto Rico and at the national level. Psa is also based on inaccurate and incomplete information on Puerto Rico`s economy, cash balances, federal funds, revenue projections and debt capacity. The main beneficiaries and architects of PSA are hedge funds that have tipped bonds from the hands of retailers and long-term creditors and Puerto Rico`s bondholders (many of whom are retirees on the island) into dollars. Puerto Rico`s Legislature and Governor Vasquez should not support PSA because it is imprisoning the island in litigation and, in all likelihood, will result in the exclusion of much-needed infrastructure development capital for decades to come. The adjustment plan originally proposed by the supervisory board, presented on September 27, 2019, offered unsecured creditors a recovery of “1.8%,” according to its own estimates from the Prudential Supervisory Board, and the supervisory board`s revised adjustment plan (the “amended proposed plan”) presented on February 28, 2020 offers unsecured creditors only a 3.9% recovery. The proposed amended plan is an insult to all Puerto Ricans. Fact: This figure of 70% is very misleading. Go bondholders only accept a 20-30% reduction in their bonds (depending on the year of issuance), resulting in a reduction in Commonwealth debt of approximately $4.5 billion, not the alleged $24 billion (70% of the $35 billion) reduction requested by the supervisory board. The remaining portion of the alleged $24 billion reduction consists of (a) approximately $4 billion in a Commonwealth down payment, which would be used to repay the go bonds, and (b) about $16 billion in debt, which is not at all part of the go borrowing agreement. The use of $4 billion of Commonwealth funds to repay go bonds should not be seen as a benefit of STRUC`s go bond proposal – it is simply debt repayment.

In addition, no one has accepted the proposal to reduce other debts by $16 billion, which includes: “As investors in Puerto Rico, we strongly believe in its future. The PSA, announced in February, remains the fastest way for the island to exit the restructuring process and regain critical access to financial markets – while gaining independence from THE supervision of foMB. PSA is based on conservative but realistic assumptions about the future growth of Puerto Rico`s economy, supported by actual results.