Exhibit C

Disclosure Statement Information Relating to New Bonds and CVI

Case:17-03283-LTS Doc#:23588-3 Filed:02/21/23 Entered:02/21/23 15:09:16 Desc:

Exhibit C Page 1 of 6
PREPA DISCLOSURE STATEMENT: INFORMATION REGARDING NEW BONDS

OBJECTION

LOCATION OF RELEVANT

INFORMATION IN THE 

DISCLOSURE STATEMENT

SUMMARY OF DISCLOSURE STATEMENT CONTENTS

Omnibus Objection of Official Committee of Unsecured Creditors to (I) Disclosure Statement for Title III Plan of Adjustment of Puerto Rico 

Electric Power Authority and (II) Related Motions [ECF No. 3186] (“UCC Obj.”)

The Disclosure Statement is opaque 

on the Legacy Charge. UCC Obj. ¶¶ 

82-83.

Disclosure Statement Sections I.B, 

II.B.3(iii).

Section I.B

• Summary of the revenue support for the Plan and the Legacy 

Charge.

Section II.B.3(iii)

• Detailed overview of the Legacy Charge, including chart of the 

Legacy Charge allocation and explanation of PREPA customer 

segmentation. 

Objection of PREPA Bond Trustee Regarding Motion for Approval of Disclosure Statement for Title III Plan of Adjustment of the Puerto Rico 

Electric Power Authority [ECF No. 3187] (“Trustee Obj.”)

The Disclosure Statement does not 

adequately disclose the source of 

funding for New Bonds. Trustee 

Obj. at 10-11.

Disclosure Statement Sections I.B, 

II.B.3(iii), VI.F.5.

Section I.B

• Summary of the revenue support for the Plan and the Legacy 

Charge.

Section II.B.3(iii)

• Detailed overview of the Legacy Charge, including chart of the 

Legacy Charge allocation and explanation of PREPA customer 

segmentation. 

Section VI.F.5

• Description of nature and extent of security interest and recourse 

securing the Series B Bonds—specifically, a security interest in 

and recourse to Net Revenues and the right to receive Net 

Revenues up to an amount equal to the Legacy Charge Revenues.

The Disclosure Statement does not 

include meaningful projections of 

Reorganized PREPA’s future Net 

Revenues. Trustee Obj. at 11.

Disclosure Statement Ex. D. Exhibit D

• Load Forecast and Illustrative Cash Flow for New Bonds

Case:17-03283-LTS Doc#:23588-3 Filed:02/21/23 Entered:02/21/23 15:09:16 Desc:

Exhibit C Page 2 of 6
2

OBJECTION

LOCATION OF RELEVANT

INFORMATION IN THE 

DISCLOSURE STATEMENT

SUMMARY OF DISCLOSURE STATEMENT CONTENTS

The Disclosure Statement does not 

explain Reorganized PREPA’s duty 

to earn sufficient Net Revenues to 

fund the New Bonds. Trustee Obj. 

at 12-13.

Disclosure Statement Sections I.B, 

VI.F.8, VI.F.10.

Section I.B

• Summary of the revenue support for the Plan and the Legacy 

Charge.

Section VI.F.8

• “[Reorganized PREPA shall] make reasonable best efforts to (a) 

continue to levy and collect rates, fees, and charges, including, 

but not limited to, the Legacy Charge and the Remaining Legacy 

Charge and (b) deposit Net Revenues collected from such rates, 

fees, and charges into the Debt Service Fund in accordance with 

the Payment Waterfall . . . .”

Section VI.F.10

• States if the amount of the Legacy Charge Revenues in a given 

year are insufficient to pay the interest on the New Bonds, 

Reorganized PREPA shall (a) implement an increase in the 

Legacy Charge sufficient to cover the shortfall and/or (b) initiate 

a rate case before PREB to compel PREB to implement an 

increase in the Legacy Charge sufficient to cover the shortfall.

The Disclosure Statement does not 

clearly explain the remedies 

supporting New Bonds. Trustee 

Obj. at 13-15.

Disclosure Statement Section 

VI.F.13.

Section VI.F.13

• Outlines remedies available to the New Master Trustee in the 

event of a default on the New Bonds. 

The Disclosure Statement is unclear 

regarding the Proposed Collateral 

for the New Bonds. Trustee Obj. at 

15.

Disclosure Statement Sections 

II.B.3(i), VI.F.5.

Section II.B.3(i)

• Description of nature and extent of security interest and recourse 

securing the Series B Bonds—specifically, a security interest in 

and recourse to Net Revenues and the right to receive Net

Revenues up to an amount equal to the Legacy Charge Revenues.

Section VI.F.5

• Description of nature and extent of security interest and recourse 

securing the Series B Bonds—specifically, a security interest in 

and recourse to Net Revenues and the right to receive Net 

Revenues up to an amount equal to the Legacy Charge Revenues.

Case:17-03283-LTS Doc#:23588-3 Filed:02/21/23 Entered:02/21/23 15:09:16 Desc:

Exhibit C Page 3 of 6
3

OBJECTION

LOCATION OF RELEVANT

INFORMATION IN THE 

DISCLOSURE STATEMENT

SUMMARY OF DISCLOSURE STATEMENT CONTENTS

Omnibus Objections of the Ad Hoc Group of PREPA Bondholders to the Disclosure Statement for the Title III Plan of Adjustment of the Puerto 

Rico Electric Power Authority [ECF No. 3111], and Related Procedural Motions Related to the Disclosure Statement and Plan Confirmation 

[ECF Nos. 3113, 3114] [ECF No. 3189] (“AHG Obj.”)

The Disclosure Statement does not 

adequately explain the nature and 

structure of the Legacy Charge. 

AHG Obj. ¶ 81.

Disclosure Statement Sections I.B, 

II.B.3(iii).

Section I.B

• Summary of the revenue support for the Plan and the Legacy 

Charge.

Section II.B.3(iii)

• Detailed overview of the Legacy Charge, including chart of the 

Legacy Charge allocation and explanation of PREPA customer 

segmentation. 

The Disclosure Statement does not 

adequately explain how the different 

parts of the Legacy Charge will be 

allocated among classes of 

ratepayers. AHG Obj. ¶ 81.

Disclosure Statement Section 

II.B.3(iii).

Section II.B.3(iii)

• Chart describing Legacy Charge allocation. 

The Disclosure Statement does not 

adequately explain the contours of 

the new rate exemption proposed in 

the Plan. AHG Obj. ¶ 81.

Disclosure Statement Section 

II.B.3(iii).

Section II.B.3(iii)

• Overview of the Legacy Charge, including explanation of new 

rate exemption.

The Disclosure Statement does not 

disclose sufficient information about 

the Series B Bonds and the risks that 

those bonds will trade at 

substantially less than their face 

value, making the Disclosure 

Statement’s recovery levels 

materially misleading. AHG Obj. ¶ 

83.

Disclosure Statement Sections 

VI.F.2(i), VI.F.8, VIII.E.

Section VI.F.2(i)

• Detailed description of Series B Bonds. 

Section VI.F.8

• List of key covenants for the New Bonds. 

Section VIII.E

• Risk factor clearly states the risk that the Series B Bonds will not 

trade at par, including the fact certain creditors believe their terms 

do not reflect market terms. 

The Disclosure Statement does not 

disclose that the Series B Bonds are 

likely to trade at a substantial 

discount to the Series A Bonds. 

AHG Obj. ¶ 86.

Disclosure Statement Section 

VIII.E.

Section VIII.E

• Risk factor clearly states the risk that the Series B Bonds will not 

trade at par, including the fact certain creditors believe their terms 

do not reflect market terms. 

Case:17-03283-LTS Doc#:23588-3 Filed:02/21/23 Entered:02/21/23 15:09:16 Desc:

Exhibit C Page 4 of 6
4

OBJECTION

LOCATION OF RELEVANT

INFORMATION IN THE 

DISCLOSURE STATEMENT

SUMMARY OF DISCLOSURE STATEMENT CONTENTS

There is no clarity about how the 

Oversight Board understands the 

nature of the security interest and 

recourse for holders of Series B 

Bonds. AHG Obj. ¶ 87.

Disclosure Statement Sections 

II.B.3(i), VI.F.5, VI.F.13, VIII.E.

Section II.B.3(i)

• Description of nature and extent of security interest and recourse 

securing the Series B Bonds—specifically, a security interest in 

and recourse to Net Revenues and the right to receive Net 

Revenues up to an amount equal to the Legacy Charge Revenues. 

Section VI.F.5

• Description of nature and extent of security interest and recourse 

securing the Series B Bonds—specifically, a security interest in 

and recourse to Net Revenues and the right to receive Net 

Revenues up to an amount equal to the Legacy Charge Revenues.

Section VI.F.13

• Outlines remedies available to the New Master Trustee in the 

event of a default on the New Bonds.

Section VIII.E

• Describes the risks related to Series B Bondholders’ enforcement 

of remedies upon an event of default. 

Supplemental Objections of the Ad Hoc Group of PREPA Bondholders to the Disclosure Statement for the First Amended Title III Plan of 

Adjustment of the Puerto Rico Electric Power Authority [ECF No. 3225] (“AHG Supp. Obj.”)

The Disclosure Statement does not 

adequately explain the nature and 

structure of and the process for 

establishing the Legacy Charge. 

AHG Supp. Obj. ¶ 24.

Disclosure Statement Sections I.B, 

II.B.3(iii).

Section I.B

• Summary of the revenue support for the Plan and the Legacy 

Charge.

Section II.B.3(iii)

• Detailed overview of the Legacy Charge, including chart of the 

Legacy Charge allocation and explanation of PREPA customer 

segmentation. 

Case:17-03283-LTS Doc#:23588-3 Filed:02/21/23 Entered:02/21/23 15:09:16 Desc:

Exhibit C Page 5 of 6
5

OBJECTION

LOCATION OF RELEVANT

INFORMATION IN THE 

DISCLOSURE STATEMENT

SUMMARY OF DISCLOSURE STATEMENT CONTENTS

The Disclosure Statement does not 

include sufficient detail about the 

New Bonds. AHG Supp. Obj. ¶ 24.

Disclosure Statement Sections 

II.B.3(i), II.B.6, VI.F.1-19, VIII.E.

Section II.B.3(i)

• Detailed overview of New Bonds

Section II.B.6

• Illustrative distribution of New Bonds under the Plan

Section VI.F.1–19

• Detailed overview of all relevant provisions in the Plan regarding 

the issuance and distribution of New Bonds. 

Section VIII.E

• Description of risks related to the New Bonds. 

Objection By AHISMA Foundation to Disclosure Statement for First Amended Title III Plan of Adjustment of the Puerto Rico Electric Power 

Authority [ECF No. 3228] (“AHISMA Obj.”)

The Disclosure Statement does not 

adequately explain the legal and 

financial characteristics of the Series 

B-1 Bonds. AHISMA Obj. ¶ 10.

Disclosure Statement Sections 

II.B.3(i), II.B.6, VI.F.1-19.

Section II.B.3(i)

• Detailed overview of New Bonds

Section II.B.6

• Illustrative distribution of New Bonds under the Plan

Section VI.F.1–19

• Detailed overview of all relevant provisions in the Plan regarding 

the issuance and distribution of New Bonds. 

Supplemental Objection of Official Committee of Unsecured Creditors in Response to Disclosure Statement for First Amended Title III Plan of 

Adjustment of the Puerto Rico Electric Power Authority [ECF No. 3226] (“UCC Supp. Obj.”)

The Disclosure Statement does not 

contain the underlying customer 

information necessary to calculate 

the projected annual revenues to 

support the illustrative cash flow for 

New Bonds. UCC. Supp. Obj. ¶ 24.

Disclosure Statement Section I.B; 

Ex. P. 

Section I.B

• Summary of the revenue support for the Plan and the Legacy 

Charge.

Exhibit P

• Legacy Charge Derivation.

Case:17-03283-LTS Doc#:23588-3 Filed:02/21/23 Entered:02/21/23 15:09:16 Desc:

Exhibit C Page 6 of 6