EXHIBIT 28 

Case:17-03283-LTS Doc#:3126-28 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit Reorg Research Article re: Resident Commissioner & Budget Surplus Page 1 of 3
Puerto Rico

Resident Commissioner Says Commonwealth Should Analyze Using Budget Surplus

to Make Debt Interest Payments, Calls Lack of Market Access ‘Dangerous’ 

Fri 03/02/2018 16:14 PM

Resident Commissioner Jennifer González said this afternoon that the administration of Gov. Ricardo

Rosselló should consider using any budget surplus to pay interest on its public debt, a move which

she said could help regain investor trust and reopen capital markets for the Puerto Rico government.

She also expressed confidence that the commonwealth government will receive a Community

Disaster Loan of more than $2 billion from the federal government during the current fiscal year. The

resident commissioner spoke after delivering a speech at a Minority Business Development Agency

event in San Juan. González gave an overview of the federal disaster aid coming to the island and

pledged to fight to ensure that local contractors participate in the recovery and rebuilding work on

the island.

The resident commissioner said that the recently approved $16.5 billion injection of federal funding

in critical areas such as healthcare “will relieve the pressure of having to make payments that you

had to make before” and open the way for the government to begin analyzing making debt payments.

“Making a serious evaluation will contribute to creating the environment that will enable Puerto Rico

access these markets again. We are going to be in hurricane season again in a few months, and we

don’t have access to these markets. This is very dangerous,” she said, adding that the state

government needs market access despite the federal government disaster funding.

“I have confidence in what the governor is doing, but I believe if there is a surplus, after complying

with pensions and other obligations, there should be an evaluation as to whether you can at least pay

the interest on the debt,” she added. González also said such a move would bring more “certainty” to

Puerto Rico’s bond market. She noted that local COFINA and general obligation bondholders are not

currently investing because of the uncertainty, which is harming the island economy. This is another

consideration in restarting interest payments, she said.

González said she has not discussed the issue with Gov. Ricardo Rosselló and declined to speculate

whether the move would win commitments from creditors to lend to the commonwealth once again.

The resident commissioner said her call for an analysis of resuming interest payments is completely

separate from the CDL issue and expressed confidence that the commonwealth government could get

a loan of $2.065 billion. González said she met with U.S. Treasury officials on Tuesday after Rosselló

sent a letter to congressional leaders complaining about the “arbitrary conduct” by federal officials

that has “effectively blocked Puerto Rico’s access to approximately $4.7 billion in CDL program funds

that Congress made available last fall.”

The resident commissioner said that the CDL is meant to cover revenue losses and unexpected

payments by jurisdictions in the wake of disasters, and Treasury officials explained to her that the

reduced $2.065 billion corresponds to the losses the commonwealth was able to demonstrate.

González said she is against the U.S. Treasury policy that conditions release of CDL proceeds on the

commonwealth’s cash balance dipping below $800 million.

Two sources familiar with the matter said the U.S. Treasury’s cash balance policy is akin to a rejection

of the lending because the commonwealth’s cash balance is not expected to dip that low. The day

after the governor’s letter was released, the U.S. Treasury issued a release highlighting its cash

balance policy and stated that it was putting in place loan documentation for the Puerto Rico

government to “quickly access funding” should the commonwealth's cash balance fall below $800

million

Case:17-03283-LTS Doc#:3126-28 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit Reorg Research Article re: Resident Commissioner & Budget Surplus Page 2 of 3
However, the resident commissioner said her office is arranging a meeting with U.S. Treasury,

commonwealth and PROMESA board officials that is aimed at “harmonizing the need that the Puerto

Rico government has” with these requirements, and she expressed confidence that the loan proceeds

would begin flowing during the current fiscal year.

González emphasized that the CDL process for island municipalities is under way, and she said she

expects all towns to receive the financing to cover their needs. Although the program is typically

capped at $5 million, she said large town governments will be able to receive more in order to cover

their losses and that towns will have a full year under the program to assess their financial losses.

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Case:17-03283-LTS Doc#:3126-28 Filed:05/23/18 Entered:05/23/18 11:45:37 Desc:

Exhibit Reorg Research Article re: Resident Commissioner & Budget Surplus Page 3 of 3