UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of 

THE COMMONWEALTH OF PUERTO RICO et al., 

Debtors.1

PROMESA Title III 

No. 17 BK 3283-LTS 

(Jointly Administered) 

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of 

PUERTO RICO ELECTRIC POWER 

AUTHORITY, 

Debtor. 

PROMESA Title III 

No. 17 BK 4780-LTS 

LIMITED OBJECTION OF THE PREPA BOND TRUSTEE TO THE NOTICE OF 

FILING OF REVISED (I) ORDER (A) AUTHORIZING DEBTOR PUERTO RICO 

ELECTRIC POWER AUTHORITY TO OBTAIN POSTPETITION FINANCING, (B) 

PROVIDING SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIMS, AND (C) 

GRANTING RELATED RELIEF; AND (II) SUPERPRIORITY POST-PETITION 

REVOLVING CREDIT LOAN AGREEMENT

 

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 The Debtors in these Title III cases, along with each Debtor’s respective Title III case number and the last four (4) 

digits of each Debtor’s Federal tax identification number, as applicable, are the (i) Commonwealth of Puerto Rico 

(Bankruptcy Case No. 17 BK 3283-LTS) (Last Four Digits of Federal Tax ID: 3481); (ii) Puerto Rico Sales Tax 

Financing Corporation (“COFINA”) (Bankruptcy Case No. 17 BK 3284-LTS) (Last Four Digits of Federal Tax ID: 

8474); (iii) Puerto Rico Highways and Transportation Authority (“HTA”) (Bankruptcy Case No. 17 BK 3567-LTS) 

(Last Four Digits of Federal Tax ID: 3808); (iv) Employees Retirement System of the Government of the 

Commonwealth of Puerto Rico (“ERS”) (Bankruptcy Case No. 17 BK 3566-LTS) (Last Four Digits of Federal Tax 

ID: 9686); and (v) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17 BK 04780-LTS) 

(Last Four Digits of Federal Tax ID: 3747). 

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To The Honorable United States District Court Judge Laura Taylor Swain: 

U.S. Bank National Association, solely in its capacity as trustee for the PREPA 

Bondholders (the “Trustee”), respectfully submits this Limited Objection (the “Limited 

Objection”) with respect to the Notice of Filing of Revised (I) Order (A) Authorizing Debtor 

Puerto Rico Electric Power Authority To Obtain Postpetition Financing, (B) Providing 

Superpriority Administrative Expense Claims, and (C) Granting Related Relief; and (II) 

Superpriority Post-Petition Revolving Credit Loan Agreement (ECF No. 729 at Case No. 17-BK4780 and ECF No. 2533 at Case No. 17-BK-3283) (the “Notice”).2

 The version of Revised 

Proposed Financing Order and the Revised Credit Agreement attached to the Notice were much 

improved over the documents submitted to the Court early on Friday morning. It appears that 

PREPA, AAFAF and the Oversight Board took a number of comments from parties in interest, 

which is greatly appreciated. The Trustee is attempting in this Limited Objection not to delay 

the outcome and funding contemplated by the Facility, but feels constrained by a number of 

continuing issues. 

The Trustee’s suggested changes to the Revised Proposed Financing Order are set forth 

on Exhibit A. A redline showing the proposed changes is attached as Exhibit B. The Trustee’s 

comments to the Revised Credit Agreement attached to the Notice are set forth in a redlined 

version attached hereto as Exhibit C. A redline showing the proposed changes is attached as 

Exhibit D. 

These coordinated proposed revisions attempt two things in the main. First, to more fully 

convert the Facility from one that primes the rights of Bondholders to Revenues pledged under 

 

2

Unless otherwise noted, docket entries referred to herein are from PREPA’s Title III case, Bankruptcy 

Case No. 17 BK 04780-LTS. Capitalized terms used herein but not otherwise defined will have the meanings 

ascribed to them in the Notice. 

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the Trust Agreement to one that provides the Lender with the repayment status of a superpriority administrative expense claimant as ruled by the Court. The suggested changes are aimed 

at avoiding the taking of sides on potential disputes over the Trust Agreement or assuming the 

terms of a plan of debt adjustment or privatization transaction. For example, the Trustee 

suggests that Facility loan payments to the Lender prior to the Termination Date (i.e., effective 

date of a plan of debt adjustment, termination of Revolving Credit Commitment or acceleration 

of the Facility) be paid pursuant to the Budgets set up under the Credit Agreement to the extent 

cash flows support it. On and after the Termination Date, however, the Facility would be 

payable immediately, but only to the extent payment is available under Title III for such claims. 

The Movants’ draft attempts to retain priming features in the Revenues that either fail to credit 

the Court’s ruling or presume the outcome of litigation not properly before the Court. Secondly, 

there are changes proposed to clarify that the promises of the Authority in the Credit Agreement 

need to be consistent with: (i) the Authority’s obligations under the Trust Agreement, without 

attempting to resolve what those duties are; and (ii) the Financing Order and the realities of what 

can legally be done under Title III of PROMESA on account of a super-priority administrative 

expense claim. 

The Trustee has not been able to coordinate fully with its constituents in the time 

allowed. Accordingly, these proposed changes are submitted by the Trustee with a reservation of 

rights to join in the objections, if any, of the Ad Hoc Group of PREPA Bondholders, National, 

Assured or Syncora, and to revise proposed revisions to accord with other changes that may be 

suggested by its constituents. 

Respectfully submitted in San Juan, Puerto Rico, on February 17, 2018. 

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I hereby certify that, on this same date, I electronically filed the foregoing with the clerk 

of the Court using the CM/ECF system for both Case No. 17-BK-4780 and Case No. 17-BK3283, which will notify the attorneys of record. 

RIVERA, TULLA AND FERRER, LLC 

/s Eric A. Tulla 

Eric A. Tulla 

USDC-DPR No. 118313 

Email: etulla@ riveratulla.com 

/s Iris J. Cabrera-Gómez 

Iris J. Cabrera-Gómez 

USDC-DPR No. 221101 

Email: icabrera@riveratulla.com 

Rivera Tulla & Ferrer Building 

San Juan, PR 00917-1212 

Tel: (787)753-0438 

Fax: (787)767-5784 

MASLON LLP 

By: /s Clark T. Whitmore 

Clark T. Whitmore (admitted pro hac vice) 

Jason M. Reed (admitted pro hac vice) 

90 South Seventh Street, Suite 3300 

Minneapolis, MN 55402 

Telephone: 612-672-8200 

Facsimile: 612-672-8397 

E-Mail: clark.whitmore@maslon.com 

jason.reed@maslon.com

ATTORNEYS FOR U.S. BANK NATIONAL 

ASSOCIATION, IN ITS CAPACITY AS 

TRUSTEE 

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EXHIBIT A 

PROPOSED FINANCING ORDER

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EXHIBIT B 

REDLINE OF PROPOSED FINANCING ORDER

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EXHIBIT C 

REVISED CREDIT AGREEMENT

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EXHIBIT D 

REDLINE OF REVISED CREDIT AGREEMENT 

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