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 

Case 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 

Case No. 17 BK 4780-LTS

Re: ECF No. 549.

Urgent Application Relates Only to 

PREPA and Shall Only Be Filed in 

Case No. 

17 BK 4780-LTS

The Financial Oversight and 

Management Board for Puerto Rico,

as representative of

Puerto Rico Electric Power Authority,

Movant,

 1

 The Debtors in the jointly-administered Title III cases, along with each Debtor’s respective Title III case number 

listed as a bankruptcy case number due to software limitations 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) 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); (iv) Puerto Rico Highways 

and Transportation Authority (“HTA”) (Bankruptcy Case No. 17 BK 3567-LTS) (Last Four Digits of Federal 

Tax ID: 3808); and (v) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17 BK 4780-

LTS) (Last Four Digits of Federal Tax ID: 3747). (Title III case numbers are listed as Bankruptcy Case numbers 

due to software limitations).

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v.

WHITEFISH ENERGY HOLDINGS, LLC, et al.2

Respondents,

[Caption continued on next page]

 2 The Respondents include: Arc American, Inc., the Ad Hoc Group of General Obligation Bondholders, U.S. Bank 

National Association in its Capacity as PREPA Bond Trustee, the Ad Hoc Group of PREPA Bondholders, 

Whitefish Energy Holdings, LLC, Scotiabank de Puerto Rico, Solus Alternative Asset Management LP, National 

Public Finance Guarantee Corporation, Ambac Assurance Corporation, Assured Guaranty Corp., Assured 

Guaranty Municipal Corp., Syncora Guarantee Inc., the Official Committee of Unsecured Creditors, Siemens 

Transportation Partnership Puerto Rico, S.E, and Knighthead Capital Management, LLC.

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OVERSIGHT BOARD’S AND AAFAF’S 

URGENT APPLICATION AND NOTICE OF REVISED 

PROPOSED $300 MILLION LOAN FROM COMMONWEALTH TO PREPA

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

The Financial Oversight and Management Board for Puerto Rico (the “Oversight 

Board”), as representative of the Puerto Rico Electric Power Authority (“PREPA”) in this Title 

III case pursuant to section 315(b) of the Puerto Rico Oversight, Management, and Economic 

Stability Act (“PROMESA”), 3 and the Puerto Rico Fiscal Agency and Financial Advisory 

Authority (“AAFAF,” and, together with the Oversight Board, the “Movants”) respectfully 

submit this joint urgent application requesting approval of a revised proposed $300 million 

unsecured, super-prioritized loan from the Commonwealth to PREPA (the “Urgent Joint 

Application”).

4

Because time is of the essence, Movants are filing the Urgent Joint Application 

immediately and scheduling a call with creditors for 11 a.m. (EST) Friday February 16, 2018. 

We will report to the Court as to whether the call results in an agreement on scheduling any 

responses and a hearing on the application, subject to the Court’s schedule. It is critical to the 

Commonwealth to procure an order approving financing no later than Tuesday February 20, 

2018.

The Movants respectfully aver as follows:

I. PROCEDURAL BACKGROUND

1. Final Hearing on Financing. On February 15, 2018, this Court issued its oral 

ruling that for reasons explained on the record, it would not grant the Urgent Joint Motion of the 

Financial Oversight and Management Board for Puerto Rico and the Puerto Rico Fiscal Agency 

 3 PROMESA is codified at 48 U.S.C. §§ 2101-2241. 4

 Capitalized terms used but not otherwise defined herein shall have the same meaning given to them in the 

Postpetition Financing Motion, ECF No. 549.

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and Financial Advisory Authority for Entry of Interim and Final Orders (a) Authorizing 

Postpetition Secured Financing, (b) Granting Priming Liens and Providing Superpriority 

Administrative Expense Claims, (c) Modifying the Automatic Stay, (d) Scheduling a Final 

Hearing, and (e) Granting Related Relief (the “Postpetition Financing Motion”) [ECF No. 549]. 

The Court, however, determined not to issue a final order in respect of the Financing Motion, but

to enable Movants to submit on short notice a revised, proposed financing on terms the Court 

observed it might favorably entertain under 11 U.S.C. § 364(c) for a $300 million unsecured, 

superpriority loan, which may be followed up subsequently with a larger loan, which may be 

collateralized if certain showings are made.

2. Critical Timing. As explained at the February 15, 2018 hearing, PREPA’s cash 

availability is at such a low level that PREPA’s operations are in jeopardy. After the hearing, 

PREPA began to implement plans to ramp down PREPA’s power production and shut down 

certain generating units in order to conserve its limited cash resources. This exacerbated the risk 

to an already fragile system and leaves it vulnerable to outages and resulting in brownouts on the 

island. Unless PREPA obtains access to additional liquidity by mid-next week, PREPA will be 

forced to further reduce its load and reduce personnel. This will further jeopardize service to 

customers and leave many customers without power. Even with $300 million of postpetition 

financing PREPA will only be able to continue operation in the ordinary course until late March 

2018. Such disruption in the power will lead to increased out-migration, hardship, and fear, 

resulting in a further weakening of the Commonwealth’s economy and ability to rehabilitate. To 

avoid these consequences, without delay Movants undertook to revise the proposed financing in 

accordance with the Court’s ruling (the “Revised Financing”). Movants also undertook to cause 

a negotiation between PREPA and the Secretary of Treasury of Puerto Rico on the revised terms 

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of the financing. Commonwealth representatives cooperated in this endeavor, to avoid, on short 

notice, gravely negative consequences to Puerto Rico, although it remained their preference to 

protect the Commonwealth and its stakeholders through inclusion of a priming lien. 

3. Temporary Solution. Movants anticipate submitting a further request for approval 

of a larger financing within two to four weeks because the instant proposed financing is 

projected to be consumed before the end of March 2018. Movants will undertake to justify the 

terms of any further financing in accordance with the Court’s ruling of February 15, 2018.

II. REVISED FINANCING

4. Material Changes to Financing. Attached hereto as Exhibit A is a revised 

proposed credit agreement (the “Revised Credit Agreement”). A redline of the Revised Credit 

Agreement to the Credit Agreement filed on February 6, 2018 [ECF No. 640-2] is attached 

hereto as Exhibit B. Also attached hereto, as Exhibit C, is a revised financing order (the “New 

Revised Financing Order”). A redline of the New Revised Financing Order to the Revised 

Proposed Final Order filed on February 14, 2018 [ECF No. 713] is attached hereto as Exhibit D. 

The material changes in the Revised Financing are:

a. Principal Amount. Reduced to $300 million.

b. Interest Rate. Fixed at 5% per year.

c. Superpriority. Unchanged.

d. Collateral. Eliminated.

e. Good Faith Lender Finding for 11 U.S.C. § 364(e). Eliminated.

f. Insulation from Attack in the Commonwealth Title III Case. Eliminated.

III. ADDITIONAL SUPPORT FOR REVISED FINANCING

5. Todd Filsinger Declaration. Attached hereto as Exhibit E is a declaration from 

Mr. Filsinger (the “Third Supplemental Filsinger Declaration”) providing PREPA’s most current 

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budget5 showing the need for immediate financing of at least $300 million and describing his 

conversation with the Secretary of Treasury of Puerto Rico in which he requested a loan with 

neither a priming lien nor a superpriority.

6. As the February 15, 2018 hearing demonstrated, PREPA had been unsuccessful in 

obtaining unsecured credit allowable under 11 U.S.C. 503(b)(1) and no party offered PREPA 

unsecured financing on terms as or more attractive than the Revised Financing, for the purposes 

of 11 U.S.C. § 364(c).

IV. REQUEST FOR RELIEF

7. Based on the evidentiary hearing held on February 15, 2018 and the Third 

Supplemental Filsinger Declaration, Movants submit the requirements for approval of the 

Revised Financing have been satisfied and request its approval. 

 5 The updated budget is attached as Exhibit 1 to the New Revised Financing Order attached hereto as Exhibit C. 

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WHEREFORE the Movants respectfully request the Court to approve the Revised 

Financing, to issue the New Revised Financing Order, and to grant PREPA such other and 

further relief as is just.

Dated: February 16, 2018

San Juan, Puerto Rico

Respectfully submitted,

/s/ Martin J. Bienenstock

Martin J. Bienenstock (pro hac vice)

Paul V. Possinger (pro hac vice)

Ehud Barak (pro hac vice)

Maja Zerjal (pro hac vice)

PROSKAUER ROSE LLP

Eleven Times Square

New York, NY 10036

Tel: (212) 969-3000

Fax: (212) 969-2900

Attorneys for the Financial Oversight and 

Management Board as Representative for 

PREPA

/s/ Hermann D. Bauer 

Hermann D. Bauer

USDC No. 215205

O’NEILL & BORGES LLC

250 Muñoz Rivera Ave., Suite 800

San Juan, PR 00918-1813

Tel: (787) 764-8181

Fax: (787) 753-8944

Co-Attorneys for the Financial Oversight and 

Management Board as Representative for 

PREPA

THE PUERTO RICO FISCAL AGENCY 

AND FINANCIAL ADVISORY 

AUTHORITY, as fiscal agent for PREPA

By its attorneys,

/s/ Nancy A. Mitchell

Nancy A. Mitchell (pro hac vice)

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Greenberg Traurig LLP

200 Park Avenue

New York, NY 10166

Tel: (212) 801-9200

Fax: (212) 801-6400

David D. Cleary

Kevin D. Finger

Greenberg Traurig LLP

77 West Wacker Drive

Suite 1300

Chicago, IL 60601

Tel: (312) 456-8400

Fax: (312) 456-8435

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Exhibit A

Revised Credit Agreement

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Exhibit B

Redline of the Revised Credit Agreement

to the Credit Agreement filed February 6, 2018 [ECF No. 640-2]

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Exhibit C

New Revised Financing Order

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Exhibit D

Redline of New Revised Financing Order

to the Revised Proposed Final Order filed February 14, 2018 [ECF No. 713] 

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Exhibit E

Third Supplemental Filsinger Declaration

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