THIS NOTICE IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
A SOLICITATION OF ACCEPTANCE OR REJECTION OF A TITLE III PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE INCORPORATED INTO PROMESA TITLE III BY SECTION 301.
ANY SUCH FUTURE OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROMESA.
--------------------------------------------------------------------------------
NOTICE TO HOLDERS OF UNINSURED BONDS
of
PUERTO RICO ELECTRIC POWER AUTHORITY
(Formerly Puerto Rico Water Resources Authority)
POWER REVENUE BONDS and POWER REVENUE REFUNDING BONDS
(List of CUSIPS Attached as Exhibit A hereto)
Regarding
Opportunity for Uninsured Bondholders to Become Party to Settlement Agreement
“Participation Date”: 5:00 p.m. ET on February 24, 2023
This notice contains important information of interest to beneficial owners of the subject securities. To the extent applicable, all depositories, custodians, and other intermediaries receiving this notice are requested to expedite re-transmittal to such beneficial owners in a timely manner. AS MORE FULLY DESCRIBED HEREIN, FAILURE TO SIGN THE SETTLEMENT AGREEMENT (AS DEFINED BELOW) AND TO TENDER YOUR BONDS FOR ASSIGNMENT OF A NEW CUSIP BY THE PARTICIPATION DATE WILL RESULT IN LOSS OF THIS OPPORTUNITY TO SETTLE.
This notice is addressed solely to holders of Bonds (as defined below) issued by the Puerto Rico Electric Power Authority (“PREPA”) that are not insured under a primary insurance policy or secondary insurance policy (the “Uninsured Bonds”). Bonds insured under a primary insurance policy or secondary insurance policy (“Insured Bonds”) are not eligible for the opportunity described herein and their respective monoline insurer will be provided with a similar proposal separately. Accordingly, beneficial owners of such Insured Bonds and any custodian holding such Insured Bonds and a related secondary insurance policy are not eligible to sign the Settlement Agreement, should not tender such Insured Bonds, and should not sign the Settlement Agreement in respect of such Insured Bonds.
Capitalized terms used but not defined in this notice shall have the respective meanings given to them in the Settlement Agreement.
Settlement Agreement
NOTICE IS HEREBY GIVEN by the Financial Oversight and Management Board for Puerto Rico, as the Title III representative of PREPA (“Oversight Board”) to each beneficial and registered owner of uninsured Puerto Rico Electric Power Authority Power Revenue Bonds and Power Revenue Refunding Bonds (the “Bonds”), issued and outstanding pursuant to that certain Trust Agreement, dated as of January 1, 1974, as amended and restated, supplemented, or otherwise modified from time to time, between PREPA and U.S. Bank National Association as successor trustee (the “Trustee”), to become a party to a Settlement Agreement (together with the annexes, exhibits, and schedules attached thereto, and as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms, each a “Settlement Agreement”) among (a) Oversight Board and (b) such beneficial or registered owner of Uninsured Bonds (together with all other beneficial or registered owners that become parties to a Settlement Agreement, the “Settling Bondholders”). Beneficial or registered owners of Uninsured Bonds who do not become a party to the Settlement Agreement are defined as “Non-Settling Bondholders”.
Each Settling Bondholder will be party to an individual Settlement Agreement that will contain the same terms and conditions as the Settlement Agreements applicable to other Settling Bondholders. A copy of the terms of the Settlement Agreement is attached hereto as Exhibit B. A copy of the Settlement Agreement will also be available at: https://cases.ra.kroll.com/puertorico, the case site for the Title III Case of PREPA. Once on the case site, click the link named “PREPA Settlement Materials” on the left hand side of the site under “Quick Links” to obtain a copy of the Settlement Agreement. The Settlement Agreement will also be posted on the Electronic Municipal Market Access (EMMA) website of the Municipal Securities Rulemaking Board, currently located at http://emma.msrb.org, using the CUSIP numbers of the Uninsured Bonds eligible to participate in the settlement and agreements as described herein and in the Settlement Agreement.
This notice contains summaries of the Settlement Agreement and is qualified in its entirety by reference to the Settlement Agreement. All registered and beneficial owners of the Uninsured Bonds are urged to review the Settlement Agreement in its entirety and to consult with their legal and financial advisors concerning any questions they have concerning the terms of the Settlement Agreement.
The PREPA Title III Case
On July 2, 2017 (the “Petition Date”), the Oversight Board filed a petition for relief for PREPA pursuant to section 304(a) of PROMESA1 with the United States District Court for the District of Puerto Rico (the “Title III Court”), commencing a debt adjustment case under Title III of PROMESA, Case No. 17-bk- 4780-LTS (the “Title III Case”). Pursuant to section 315(b) of PROMESA, the Oversight Board is the Title III representative of PREPA in PREPA’s Title III Case.
The Amended Lien & Recourse Challenge Challenging the Validity of the Bonds
This settlement offer applies to you if you are a beneficial holder of Uninsured Bonds issued by PREPA. As explained in more detail below, the validity of your Bonds and entitlement to payment have been challenged on two grounds: (1) the Oversight Board contends your Bonds are secured only by moneys in certain accounts that only amount to less than one percent (1.0%) of your claim; and (2) the Oversight Board contends your Bonds are not allowable claims against PREPA, but are only allowable claims against those certain accounts. If the Oversight Board prevails on both those contentions, your recovery will be less than one percent (1.0%) of your allowable Bond claims. If the Oversight Board prevails on its contention that the collateral securing your bonds is limited to what is in those certain accounts, but does not prevail on its contention that your bonds are not allowable claims against PREPA, your recovery will equal the recovery received by other general unsecured claimholders which may range from approximately forty percent (40.0%) to fifty percent (50.0)% of your allowable Bond Claims. If the Oversight Board does not prevail on its contention that the collateral securing your bonds is limited to what is in those certain accounts, but is rather secured by PREPA’s revenues, your allowable Bond Claims will likely be paid more than fifty percent (50.0%) on the dollar and could possibly be paid in full, depending on the Title III Court’s determination including as to PREPA’s responsibility to raise electricity prices and PREPA’s ability to collect more revenues as its customers are charged more for power.
Rather than risking nearly no recovery on your Bond Claims, this settlement offer allows you to settle for payment in the form of new bonds of approximately half your claims with the possibility of receiving more depending on how many bondholders settle and the outcome of the litigation over the two contentions described above. Your allowable Bond claims for settlement purposes include all unpaid principal and interest accrued as of PREPA’s commencement of its Title III case on July 2, 2017, but excludes all interest accrued after that date. In exchange for eliminating the risk of nearly no recovery, your acceptance of the offer means that you also materially diminish the probability you will be paid in full or even more than the settlement offer if both the Oversight Board’s contentions are rejected and the Bondholders’ representatives prevail in the litigation.
On July 1, 2019, the Oversight Board commenced an adversary proceeding against the Trustee (the “Amended Lien & Recourse Challenge”), by filing a complaint (subsequently amended), styled The Financial Oversight and Management Board for Puerto Rico v. U.S. Bank National Association, Adv. Proc. No. 19-00391-LTS, currently pending with the Title III Court, in which the Oversight Board asserts that the Trustee’s lien and security interest is limited to funds in certain deposit accounts held by the Trustee (the “Lien Scope Counts”) and that the Trustee’s claims with respect to the PREPA Revenue Bonds are recourse solely to such deposit accounts and are non-recourse (meaning they are not valid claims) against PREPA (the “Recourse Counts”). All filings with respect to the Amended Lien & Recourse Challenge can be found at https://cases.ra.kroll.com/puertorico/Home- DocketInfo?DocAttribute=4451&DocAttrName=ADVCASENO.19-00391.
As of the date hereof, the various parties to the Amended Lien & Recourse Challenge, including the Oversight Board and the Trustee, have concluded briefing with respect to some of the most determinative claims, counterclaims, and defenses asserted in the Amended Lien & Recourse Challenge. The Title III Court has not issued any rulings with respect to the Amended Lien & Recourse Challenge, including with respect to the Lien Scope Counts or the Recourse Counts. The Title III Court has scheduled oral argument to be heard in connection with the Amended Lien & Recourse Challenge on February 1, 2023.
The PREPA Plan
On December 16, 2022, the Oversight Board filed its proposed plan of adjustment for PREPA in connection with PREPA’s Title III Case (as it may be further amended, modified, or supplemented from time to time as permitted by the Settlement Agreement, the “PREPA Plan”)2 and a corresponding proposed disclosure statement (the “Disclosure Statement”). As of the date hereof, the Disclosure Statement has not been approved and the PREPA Plan has not been confirmed by the Title III Court.
The PREPA Plan provides holders of Bonds the option to be classified in one of two classes of claims. The first class is the class of holders of Uninsured Bonds3 that desire to settle their claims against PREPA for the treatment described in the PREPA Plan for such class (the “Settling Class”). The second class is the class of holders or insurers of Bonds desiring to have their distributions depend largely on the outcome of the litigation described above (the “Non-Settling Class”). The scope of the security interest and the allowance of the claims of the Non-Settling Class will be determined in the Amended Lien & Recourse Challenge through, among other things, resolution by the Title III Court (or other court with appropriate jurisdiction, including any applicable appellate court) of the Lien Scope Counts and Recourse Counts. A ruling adverse to the Trustee in the Amended Lien & Recourse Challenge could eliminate the vast majority of the claims in the Non-Settling Class, resulting in such holders of claims in the Non-Settling Class receiving treatment on their claims substantially less than the treatment provided to the claims of Settling Class. Conversely, if the Trustee is successful in the Amended Lien & Recourse Challenge, the treatment provided to the claims of the Non-Settling Class could be substantially more than the treatment provided to the claims of the Settling Class.
The Oversight Board, pursuant to the Settlement Agreement, as the Title III representative of PREPA, is offering holders of Bonds the opportunity to choose between joining the Settling Class and becoming a Settling Bondholder or remaining in the Non-Settling Class. A Settling Bondholder will, consistent with the Settlement Agreement, receive—subject to confirmation of the PREPA Plan— the treatment provided to the claims of the Settling Class in the PREPA Plan in exchange for the settlement of the Oversight Board’s claims in the Amended Lien & Recourse Challenge against the Trustee, as applied to the Uninsured Bonds held by the Settling Bondholders, including the Lien Scope Counts and the Recourse Counts. By opting into the Settling Class Settling Bondholders waive their right to object to confirmation and to participate in the Amended Lien & Recourse Challenge; however, they retain the right to vote to accept or reject the Plan, after approval of the Disclosure Statement.
Overview of Certain Terms of Settlement Agreement
As described in greater detail in the Settlement Agreement, by signing the Settlement Agreement, a Settling Bondholder agrees (i) to become a member of the Settling Class and receive the treatment provided to holders of claims in such class in the PREPA Plan, as described in the Settlement Agreement, and (ii) to the settlements embodied in the Settlement Agreement, and to various covenants related thereto. Settling Bondholders shall also be entitled to certain rights, claims, and protections, in each case, subject to the terms of the Settlement Agreement. The following is a brief overview of certain terms of the Settlement Agreement relevant to the treatment given to the Settling Bondholders.
· Settling Claims: Pursuant to the PREPA Plan, Settling Bondholders shall have their claims allowed in an amount equal to the accrued and unpaid principal and interest on their Uninsured Bonds as of the Petition Date. On account of that claim, Settling Bondholders shall be entitled to receive from PREPA a minimum recovery of fifty percent (50.0%) of their allowed claims, consisting of:
(a) their pro rata share of the cash in the deposit account(s) held by the Trustee which are subject to a perfected security interest in favor of the Trustee (collectively, the “Sinking Fund”); and
(b) a distribution of Series B Bonds (as defined in the Term Sheet (as defined in the Settlement Agreement)), such that the cash (received under subsection (a) above) and the face amount of the Series B Bonds received by each Settling Bondholder equals 50% of the amount of the allowed claim.4
· Settling Bondholders may receive additional distributions on their allowed claims depending on the result of the Amended Lien & Recourse Challenge. If the Oversight Board prevails on the Lien Scope Counts and/or Recourse Counts, such that New Bonds (as defined in the Term Sheet and Settlement Agreement) remain available for distribution after making the minimum distributions of New Bonds to Settling Bondholders and Non-Settling Bondholders, then the Settling Bondholders’ will receive, after (i) the trust established for holders of general unsecured claims against PREPA receives the next distribution of New Bonds in a face amount sufficient to provide general unsecured claims fifty percent (50.0%) of the estimated value of their claims, and (ii) the trust established pursuant to the PREPA Plan to make payments to the PREPA pension system (for the benefit of PREPA pension beneficiaries) receives twenty percent (20.0%) of the Series B Bonds remaining after the distributions of Series B Bonds in (i), (A) forty percent (40.0%) of their pro rata share of remaining Series B Bonds available, and (B) if and only if the holders of general unsecured claims against PREPA and Fuel Line Lenders receive New Bonds in a face amount sufficient to pay them in full, up to the remaining sixty percent (60.0%) of their pro rata share of New Bonds.
· The Settling Bondholders will receive a contingent value instrument in an amount equal to their remaining portions of their allowed claims. The total recovery to be received by Settling Bondholders under the PREPA Plan is referred to herein as the “Settling Claims Recovery.”
· Non-settling Claims: Non-Settling Bondholders’ recovery is dependent on the outcome of the Amended Lien & Recourse Challenge.
· If the Oversight Board prevails on the Lien Scope Counts and Recourse Counts, then Non- Settling Bondholders’ Claims receive only their pro rata share of the cash in the Sinking Fund (less than one percent (1.0%) of such claims), and have no deficiency claim against PREPA. If the class of Non-Settling Bondholders votes to accept the PREPA Plan, however, they will receive a contingent value instrument that could pay up to the difference between the unpaid principal and accrued interest on their claims as of the Petition Date and the distributions made to them from the Sinking Fund, depending on future results. The prospects of the contingent value instrument paying material amounts is very speculative.
· If the Oversight Board prevails on the Lien Scope Counts, but loses on the Recourse Counts, then the Non-Settling Bondholders’ claims will receive a pro rata share of the Sinking Fund. Any potential unsecured deficiency claim will share, pro rata, with all other non-settled unsecured claims, in the recovery made available to holders of general unsecured claims.
· If the Oversight Board loses the Lien Scope Counts, but prevails on the Recourse Counts, then the Non-Settling Bondholders’ claims will receive their pro rata share of remaining New Bonds issued under the PREPA Plan in an amount equal to the value of PREPA’s assets that are subject to a valid, perfected, and enforceable prepetition security interest in favor of the Bond Trustee as determined pursuant to the Amended Lien & Recourse Challenge (the “Bond Collateral”) after payment of the (i) Settling Bondholders’ allowed claims, (ii) the Fuel Line Lenders’ (as defined in the Term Sheet and Settlement Agreement) allowed claims, and (iii) National’s (as defined in the Term Sheet and Settlement Agreement) allowed claims. Non-Settling Bondholders will have no unsecured deficiency claims against PREPA.
· If the Non-Settling Bondholders prevail on both the Lien Scope Counts and the Recourse Counts, then the Non-Settling Bondholders’ claims will receive their pro rata share of remaining New Bonds issued under the PREPA Plan in an amount equal to the value of the Bond Collateral after payment of the (i) Settling Bondholders’ allowed claims, (ii) the Fuel Line Lenders’ (as defined in the Term Sheet (as defined in the Settlement Agreement)) allowed claims, and (iii) National’s (as defined in the Term Sheet (as defined in the Settlement Agreement)) allowed claims. They will also receive a pro rata share of the recovery made available to holders of general unsecured claims on account of their deficiency claim.
· Transfer Covenants: By signing the Settlement Agreement, a Settling Bondholder agrees that it will transfer Uninsured Bonds solely in accordance with the terms of Section 6 of the Settlement Agreement, as follows: to a transferee (i) that is a Settling Bondholder; or (ii) who becomes a Settling Bondholder by executing the joinder contained in Appendix B to the Settlement Agreement.
· Termination of the Settlement Agreement: If any Settlement Agreement terminates, the parties to that Settlement Agreement will be restored to their original rights (including regarding the potential claims and proofs of claim and potential objections thereto), subject to, and as more fully set forth in, the Settlement Agreement.
The below graphic depicts the projected recoveries for both Settling Bondholders and Non-Settling Bondholders based on various scenarios with respect to (i) the percentage of Bondholders that settle and do not settle and (ii) the outcome of the Lien Scope Counts and Recourse Counts in the Amended Lien & Recourse Challenge. The projections below are subject to material change.
|
|
FOMB wins on Lien Scope Counts and Recourse Counts
|
FOMB wins on Lien Scope Counts and Loses on Recourse Counts
|
FOMB loses on Lien Scope Counts and Recourse Counts
|
|
0% Bonds Settle
|
Settling Bonds
|
N/A
|
Settling Bonds
|
N/A
|
Settling Bonds
|
N/A
|
|
Non-Settling Bonds
|
0.21%
|
Non-Settling Bonds
|
46.42%
|
Non-Settling Bonds
|
51.41%
|
|
25% Bonds Settle
|
Settling Bonds
|
100%
|
Settling Bonds
|
50.00%
|
Settling Bonds
|
50.00%
|
|
Non-Settling Bonds
|
0.28%
|
Non-Settling Bonds
|
45.38%
|
Non-Settling Bonds
|
51.88%
|
|
50% Bonds Settle
|
Settling Bonds
|
69.99%
|
Settling Bonds
|
50.00%
|
Settling Bonds
|
50.00%
|
|
Non-Settling Bonds
|
0.42%
|
Non-Settling Bonds
|
43.48%
|
Non-Settling Bonds
|
52.81%
|
|
75% Bonds Settle
|
Settling Bonds
|
56.26%
|
Settling Bonds
|
50.00%
|
Settling Bonds
|
50.00%
|
|
Non-Settling Bonds
|
0.84%
|
Non-Settling Bonds
|
38.91%
|
Non-Settling Bonds
|
52.81%
|
|
100% Bonds Settle
|
Settling Bonds 50.00%
Non-Settling N/A Bonds
|
Settling Bonds N/A Settling Bonds N/A
Non-Settling N/A Non-Settling N/A Bonds Bonds
|
The foregoing is not a complete summary and is qualified in its entirety by reference to the Settlement Agreement. Beneficial owners and holders are encouraged to review the Settlement Agreement in its entirety. Beneficial owners and holders should consult their bank, broker, or other financial or legal advisor in deciding whether to agree to be bound by the terms of the Settlement Agreement.
Rationale for Assignment of Alternative Identifying CUSIPs
Settling Bondholders are, subject to the terms and conditions of the Settlement Agreement, entitled to their pro rata share of the Settling Claims Recovery. The rights to this Settling Claims Recovery and obligations of such Settling Bondholders “travel” with the Uninsured Bond if it is transferred to another Settling Bondholder. Accordingly, in order to separately identify the Uninsured Bonds that fall into this category, the Settlement Agreement provides for the assignment of alternative identifying CUSIPs to track beneficial interests in Uninsured Bonds that become subject to the Settlement Agreement from time to time, including on or prior to 5:00 p.m. ET on February 24, 2023. Although referred to in the below procedures as an “exchange,” the assignment of such alternative identifying CUSIPs does not change or cause a reissuance of the Uninsured Bonds or change the prepetition nature of claims arising from the Uninsured Bonds in any way. The terms of your Uninsured Bond remain the same regardless of your acceptance of the Settlement Agreement, but the beneficial owners thereof become subject to the terms, conditions, settlements, covenants and agreements of the Settlement Agreement. The new CUSIP merely provides an administrative mechanism for tracking the beneficial interests of existing Uninsured Bonds that became subject to the Settlement Agreement prior to 5:00 p.m. ET on February 24, 2023. There are no tax consequences resulting from the administrative change of CUSIP in respect of your Uninsured Bond.
A beneficial owner of an Uninsured Bond that chooses not to join the Settlement Agreement will continue to hold its Uninsured Bonds unchanged from its current form and under its original CUSIP. Beneficial owners are encouraged to monitor the Kroll Restructuring Administration LLC (“Kroll” or the “Information and Tabulation Agent”) and EMMA websites for future information concerning their Uninsured Bonds.
In the event that there is a termination of a Settlement Agreement pursuant to Section 10 thereof prior to the commencement of distributions contemplated by the Settlement Agreement, then, unless otherwise agreed to by the parties to the Settlement Agreement, the Oversight Board shall employ its reasonable efforts to cause the reassignment of the original CUSIPs of Uninsured Bonds that had been subject to that Settlement Agreement.
The procedures for receiving such alternative identifying CUSIPs are set forth below.
Procedures for Entering into the
Settlement Agreement and Assignment of Replacement CUSIPs
Holders of Uninsured Bonds who enter into the Settlement Agreement do so with their understanding and their consent that their beneficial interests in Uninsured Bonds will be assigned a new replacement CUSIP to identify their beneficial interests in the Uninsured Bonds and their agreement to the terms of the Settlement Agreement. The assignment of such replacement CUSIP is referred to herein as an “exchange” for these limited administrative purposes only. The exchange will be a one-for-one exchange. It is anticipated that the Bonds identified by their new CUSIP will be delivered at the direction of PREPA on or before March 6, 2023 (the “Exchange Effective Date”).
For those beneficial owners of Uninsured Bonds entering into the Settlement Agreement, in addition to providing the beneficial owners’ agreement by executing the Settlement Agreement through the delivery of a signature page in the form of Exhibit D hereto, Depository Trust Corporation (“DTC”) participants should make book-entry delivery of the consenting Uninsured Bonds by causing DTC to transfer such
Uninsured Bonds into the ATOP account established by the Information and Tabulation Agent, on behalf of and as agent for PREPA in accordance with DTC’s procedures for such transfer. Such book-entry delivery must be made on or prior to 5:00 p.m. ET on the Participation Date. Please note that transferring Uninsured Bonds into the Information and Tabulation Agent’s ATOP account alone is not sufficient to process the consent and exchange of a beneficial owner’s Uninsured Bonds; the signature page to the Settlement Agreement Consent Form (defined below) and the Settlement Agreement, in the form of Exhibit C and Exhibit D hereto, respectively, must also be delivered to the Information and Tabulation Agent to effectively process such consent and exchange.
The Information and Tabulation Agent will establish an ATOP account with respect to all Uninsured Bonds at DTC for purposes of joining holders to the Settlement Agreement. DTC Participants should make book-entry delivery of the Uninsured Bonds by causing DTC to transfer such Uninsured Bonds into the Information and Tabulation Agent’s ATOP account in accordance with DTC’s procedures for such transfer. Concurrently with the delivery of the Uninsured Bonds through book-entry transfer into the Information and Tabulation Agent’s ATOP account at DTC, an Agent’s Message (as defined below) in connection with such book-entry transfer must be transmitted to and received by the Information and Tabulation Agent on or prior to the Participation Date. The confirmation of a book-entry transfer into the Information and Tabulation Agent’s ATOP account at DTC as described above is referred to herein as a “Book-Entry Confirmation.”
“Agent’s Message” means a message transmitted by DTC to, and received by, the Information and Tabulation Agent’s ATOP account and forming a part of the Book-Entry Confirmation that states that DTC has received an express acknowledgment from the participants in DTC described in such Agent’s Message, stating the aggregate principal amount of the Uninsured Bonds that have been tendered by such participants pursuant to this notice and that such participants have received this notice, have reviewed the Settlement Agreement and agree to be bound by the Settlement Agreement’s terms and that PREPA may enforce such agreement against such participants.
Unless the Uninsured Bonds being tendered are received in the Information and Tabulation Agent’s ATOP account on or prior to 5:00 p.m. ET on the Participation Date (accompanied by a properly transmitted Agent’s Message), the holders of such Uninsured Bonds will be deemed to have not joined the Settlement Agreement. Uninsured Bonds tendered into the ATOP account may be withdrawn until the Participation Date.
Bulk tenders through ATOP are not permitted. Tenders must be submitted at the beneficial holder level into DTC’s ATOP system. Tenders through ATOP will be accepted in each Uninsured Bond’s minimum and multiple denominations.
The form associated with consent to the Settlement Agreement (“Settlement Agreement Consent Form”), attached as Exhibit C hereto, must include all participating CUSIPs, principal amounts, and VOI (Voluntary Offering Instruction) IDs per beneficial owner. If there are any irregularities with what has been delivered via book entry into ATOP and what is provided on the Settlement Agreement Consent Form, consent to the Settlement Agreement will be considered ineffective until the irregularity is corrected. All Uninsured Bonds tendered through DTC’s ATOP will be restricted from further trading or transfer through the Exchange Effective Date for such participating Bonds in accordance with the terms of the Settlement Agreement.
A signature page to the Settlement Agreement, in the form of Exhibit D hereto, must be signed by the beneficial owner of the participating Uninsured Bonds or its nominee (if the nominee is permitted to act as a signatory for the beneficial owner) and must be returned to the Information and Tabulation Agent through Kroll’s E-Portal system. If a beneficial owner holds multiple CUSIPs, the beneficial owner is
only required to sign one signature page to the Settlement Agreement for their entire principal amount of Uninsured Bonds consenting to the terms of the Settlement Agreement. Beneficial owners of Uninsured Bonds corresponding to two or more CUSIPs must tender all of their Uninsured Bonds through the execution of a single signature page of the Settlement Agreement according to the terms herein, in addition to tendering all of their bonds through DTC’s ATOP system. Once a beneficial owner has delivered a signature page to the Settlement Agreement, such signature page will be considered to have been delivered with respect to all of the Uninsured Bonds that beneficial owner holds.
Beneficial owners of Insured Bonds are not individually eligible to become party to the Settlement Agreement and are not subject to the procedures set forth herein.
A beneficial owner or its DTC nominee (if the DTC nominee is permitted to act as signatory for the beneficial owner) should return a signed signature page to the Settlement Agreement to Kroll, in the form of Exhibit D hereto, no later than the Participation Date, 5:00 p.m. ET on February 24, 2023, via Kroll’s E-Portal system. The information provided on the signature page and through the Information and Tabulation Agent’s E-Portal system must be disclosed at the beneficial owner level. To access the E-Portal System visit https://cases.ra.kroll.com/puertorico, click on “Submit Settlement Agreement Signature Page” section of the website and follow the instructions to complete and submit your Settlement Agreement signature page and associated information. Unless the Settlement Agreement signature page is received by the Information and Tabulation Agent on or prior to the Participation Date of 5:00 p.m. ET on February 24, 2023, the holders of such Uninsured Bonds will be deemed to have not joined the Settlement Agreement. Please do not submit hard copies or emailed copies of the Settlement Agreement signature page. The E-Portal is the only valid method of submission.
Questions or requests for additional information may be directed to the Information and Tabulation Agent at:
Kroll Restructuring Administration LLC Attn: Tiffany Archbell
Tel: +1 (646) 486-7944. E-Mail:
puertoricoballots@ra.kroll.com