Schedule 5 

Form of Election Notice for Holders of Claims in Class 5

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Schedule 5 - Form of Election Notice for Holders of Claims in Class 5 Page 1 of 8
IN THE 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 

(Jointly Administered) 

 

ELECTION NOTICE 

FOR NATIONAL INSURED BONDHOLDERS WITH CLAIMS IN CLASS 5 

This Election Notice (the “Notice”) is being sent to the beneficial holders of Allowed 

National Insured Bond Claims arising on account of National Insured Bonds, which are insured 

1

 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); (v) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17- 

BK-4780-LTS) (Last Four Digits of Federal Tax ID: 3747); and (vi) Puerto Rico Public 

Buildings Authority (“PBA”) (Bankruptcy Case No. 19- BK-5523-LTS) (Last Four Digits 

of Federal Tax ID: 3801) (Title III case numbers are listed as Bankruptcy Case numbers 

due to software limitations). 

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by National Public Finance Guarantee Corporation (“National”). These securities give rise to 

Claims in Class 5 of the Modified Second Amended Title III Plan of Adjustment of the Puerto Rico 

Electric Power Authority, dated March 1, 2023 [ECF No. _____] (as the same may be updated, 

supplemented, amended and/or otherwise modified from time to time, the “Plan”).2 Although 

National has the right to cast the vote on account of Claims arising from National Insured Bonds 

to accept or reject the Plan, holders of Claims in Class 5 are entitled to elect their form of treatment 

pursuant to the Plan. 

Each holder of an Allowed National Insured Bond3 has the option to elect to receive on the 

Effective Date, or as soon as reasonably practicable thereafter, in full consideration, satisfaction, 

release, and exchange of such holder’s Claim: 

National Commutation Treatment (Option 1): On the Effective Date, or as soon as 

reasonably practicable thereafter, you will receive the National Commutation 

Consideration, distributable by or at the direction of National in its sole and absolute 

discretion pursuant to Section 20.A of the Plan. The National Commutation Consideration 

consists of a combination of some or all of the following: (i) your Pro Rata Share of the 

National Plan Consideration; (ii) a percentage, to be determined at National’s sole 

discretion, of the amounts distributable to National in accordance with the terms and 

provisions of Article VIII.A of the Plan; and (iii) Cash in an amount to be determined by 

National in its sole discretion, in full and complete satisfaction, release, and discharge of 

any further obligation of National with respect to the applicable National Insurance Policies 

(and, by making such election, you shall be deemed to have agreed to commute the 

National Insurance Policies relating to your Allowed National Insured Bond Claim). 

If you elect the National Commutation Treatment (Option 1), (i) you shall not receive any 

payments from National under the National Insurance Policies on account of accrued and 

unpaid interest on and after, or, in the case of any capital appreciation bonds, the accreted 

value on and after, the Effective Date, and to the extent any accrued or accreted interest is 

paid to you by National after such date, such amount shall be credited against the 

consideration you (or your successors, transferees, or assigns) are otherwise entitled to 

receive as National Commutation Consideration, (ii) the National Insured Bonds 

underlying your Allowed National Insured Bond Claim shall be deemed cancelled on the 

Effective Date, and (iii) you shall have no other or further rights under or with respect to 

the applicable National Insurance Policy or any of the National Non-Commutation 

2

 Unless otherwise defined herein, each capitalized term used herein shall have the meaning 

given to it in the Plan. 

3

 Any calculations and/or payments to be made to you based on, or in relation to, your 

Allowed National Insured Bond Claims pursuant to the options set out herein will take into 

account any payments of principal and/or accrued interest already made to you by National 

pursuant to the terms of the relevant National Insurance Policies. For the avoidance of 

doubt, you shall not be compensated for any amounts already paid to you pursuant to the 

terms of the relevant National Insurance Policies. 

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Treatment options described in Section 20.B of the Plan or with respect to the National 

Non-Commutation Treatment (Option 2) below. 

National Non-Commutation Treatment (Option 2): If you timely and validly elect to 

receive the National Non-Commutation Treatment, (i) National shall receive the National 

Plan Consideration distributable on account of the applicable Allowed National Insured 

Bond Claim, and (ii) such Holder shall receive the following treatment(s):4

 

(i) Custodial Trusts: You shall (A) deposit, or be deemed to have deposited, 

among other things, your Pro Rata Share of the National Trust 

Consideration, the National Insured Bonds allocable to you, and the related 

National Insurance Policies into the applicable National Trust, (B) be 

deemed to have received your Pro Rata Share of the National Trust 

Consideration and National Certificates in consideration therefor, and (C) 

have no recourse to National or the National Insurance Policies other than 

as provided for under the terms of the National Trust. 

(ii) Escrow: You shall deposit, or be deemed to have deposited, among other 

things, your Pro Rata Share of the National Escrow Consideration in the 

National Escrow Account and such deposited National Escrow 

Consideration shall be held as security for National’s obligations to the 

Holders of the National Insured Bonds whose National Escrow 

Consideration was deposited in the National Escrow Account under the 

National Insurance Policies. 

(iii) Payment of Accelerated Amounts: National shall receive the National 

Plan Consideration that would be otherwise allocable to you and National 

shall fully and completely discharge its obligation to you by paying on the 

Effective Date, in Cash, the amount thereof at the National Acceleration 

Price as of the date of payment. 

(iv) Alternative Treatment: The Oversight Board and National reserve the 

right to formulate an alternative election or implementation option with 

respect to the National Insured Bonds that is mutually acceptable to the 

Oversight Board and National, each in their respective sole discretion; 

provided, however, that any such alternative election or implementation 

option must be proposed, in writing, prior to the commencement of the 

Disclosure Statement hearing. 

If you fail to make a valid election or submit an election for less than all of your Claims in 

Class 5 (in which case, such election will be void and of no force and effect), you will be deemed 

to have elected to commute the applicable National Insurance Policies, to release and discharge 

National’s obligations thereunder, and to receive distributions in accordance with the National 

Commutation Treatment (Option 1). If you do not validly elect to receive the National Non4

 Pursuant to the Plan, National shall exercise in its sole discretion its election of treatments 

at or prior to the Plan Supplement Deadline. 

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Commutation Treatment, you shall be deemed to have had, on or after the Effective Date, the 

National Insured Bonds, including the obligations of National under the related National 

Insurance Policies, underlying your Claim cancelled. 

You are encouraged to review the entire Disclosure Statement and the Plan before making an 

election with respect to the form of distribution you will receive under the Plan. The tax 

consequences described in the Disclosure Statement are not a substitute for careful tax planning 

and professional tax advice upon your individual circumstances and you should seek advice 

from your own tax advisor. 

Please take notice that you are not able to vote to accept or reject the Plan and will not receive 

separate voting instructions for such purpose. Pursuant to the Plan and the Disclosure 

Statement Order, National is entitled to vote to accept or reject the Plan on account of Claims 

arising from securities insured by National. 

IF YOU WISH TO RECEIVE THE NATIONAL COMMUTATION TREATMENT 

(OPTION 1), YOU DO NOT NEED TO TAKE ANY FURTHER ACTION. HOWEVER, 

IN SUCH CASE, YOU WILL BE DEEMED TO HAVE ELECTED TO RELEASE, 

DISCHARGE, AND COMMUTE NATIONAL’S OBLIGATIONS AND THE NATIONAL 

INSURANCE POLICY. 

Each holder of National Insured Bonds described on Exhibit A attached hereto that wishes 

to receive the National Non-Commutation Treatment (Option 2) must submit a valid election 

in the manner described herein. 

* * * * * 

How to Submit a Valid Election 

If you wish to elect to receive the National Non-Commutation Treatment (Option 2), you must 

instruct your broker or nominee (each, a “Nominee”) to electronically deliver your National 

Insured Bonds via the Automated Tender Offer Program (“ATOP”) at The Depository Trust 

Company (“DTC”), which will constitute an election via DTC’s ATOP system to receive the 

National Non-Commutation Treatment (Option 2). 

No paperwork is required to be delivered to Kroll to effectuate the election. The sole means of 

effectuating this election is to (i) validly tender your National Insured Bonds into the proper ATOP 

envelope at DTC, and (ii) make the election to receive the National Non-Commutation Treatment 

(Option 2), each as described on DTC’s ATOP system. 

THE ELECTION DEADLINE IS 

 5:00 P.M. (ATLANTIC STANDARD TIME) ON JUNE 7, 2023. 

This date and time is referred to as the “Election Deadline.” 

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PLEASE TAKE NOTICE THAT IF YOU TENDER YOUR NATIONAL INSURED 

BONDS THROUGH ATOP, YOU WILL BE RESTRICTED FROM TRANSFERRING 

YOUR NATIONAL INSURED BONDS UNTIL THE ISSUANCE OF NEW CUSIPS IN 

CONNECTION WITH SUCH TENDERED BONDS, WHICH ISSUANCE SHALL 

OCCUR AS SOON AS REASONABLY PRACTICABLE AFTER THE ELECTION 

DEADLINE. IF YOU DESIRE TO RETAIN THE ABILITY TO TRADE OR TRANSFER 

YOUR NATIONAL INSURED BONDS PRIOR TO THE ISSUANCE OF NEW CUSIPS, 

THEN YOU SHOULD NOT TENDER YOUR NATIONAL INSURED BONDS THROUGH 

ATOP. 

YOU MAY, HOWEVER, REVOKE YOUR ELECTION AT ANY TIME BEFORE THE 

ELECTION DEADLINE AND WITHDRAW ANY TENDERED NATIONAL INSURED 

BONDS. 

* * * * * 

How to Revoke an Election 

You may revoke an election to receive the National Non-Commutation Treatment (Option 2) and 

withdraw your National Insured Bonds tendered through DTC’s ATOP at any time before the 

Election Deadline. 

If you wish to revoke your election, you must instruct your Nominee to revoke your election and 

withdraw your National Insured Bonds via ATOP at DTC (which withdrawal will be confirmed 

by Kroll once notified by DTC of the withdrawal request). No paperwork is required to be 

delivered to Kroll to effectuate the election. 

If you revoke your election at any time before the Election Deadline, you may make an election to 

receive the National Non-Commutation Treatment (Option 2) at any time before the Election 

Deadline, in accordance with the instructions to submit an election above. 

* * * * * 

If you have any questions about your holdings, please contact your Nominee. Additionally, you 

must contact your Nominee to take any action described above. 

IF YOU HAVE ANY QUESTIONS REGARDING THIS NOTICE, PLEASE CONTACT 

THE BALLOTING AGENT, KROLL RESTRUCTURING ADMINISTRATION LLC 

(“KROLL”),5 BY TELEPHONE AT (844) 822-9231 (TOLL FREE FOR U.S. AND PUERTO 

RICO) OR (646) 486-7944 (FOR INTERNATIONAL CALLERS), AVAILABLE 10:00 A.M. 

TO 7:00 P.M. (ATLANTIC STANDARD TIME) (SPANISH AVAILABLE), OR BY EMAIL 

AT PUERTORICOINFO@RA.KROLL.COM AND REFERENCE “NATIONAL 

5

 On March 29, 2022, Prime Clerk LLC changed its name to Kroll Restructuring 

Administration LLC. 

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DISTRIBUTION ELECTION” IN THE SUBJECT LINE. PLEASE NOTE THAT KROLL 

IS NOT AUTHORIZED TO PROVIDE, AND WILL NOT PROVIDE, LEGAL ADVICE. 

All questions as to the validity, form and eligibility (including time of receipt) of your election 

will be determined by the Oversight Board, whose determination shall be final and binding on all 

parties. The Oversight Board and National reserve the absolute right to reject any or all elections 

that are not in proper form or the acceptance of which would, in its legal counsel’s opinion, be 

unlawful. The Oversight Board and National also reserve the right to waive any defects, 

irregularities or conditions as to an election. A waiver of any defect or irregularity in one instance 

shall not constitute a waiver of the same or any other defect or irregularity with respect to any 

other instance except to the extent the Oversight Board may otherwise so provide. An election 

shall not be deemed to have been made until any defects or irregularities have been waived by us 

or cured. None of the Oversight Board, National or the Balloting Agent, nor any other person will 

be under any duty to give notification of any defect or irregularity in this election, or will incur 

any liability to you for failure to give any such notification. 

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Exhibit A 

Description CUSIP 

 

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