Exhibit N

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Exhibit N to Declaration Page 1 of 58
PO Box 192018 San Juan, PR 00919-2018; www.oversightboard.pr.gov; comments@oversightboard.pr.gov

FINANCIAL OVERSIGHT AND MANAGEMENT BOARD

 FOR PUERTO RICO

 Members

Andrew G. Biggs

Carlos M. García

Arthur J. González

José R. González

Ana J. Matosantos

David A. Skeel, Jr.

 José B. Carrión III 

Chair Natalie A. Jaresko

Executive Director

By Email

July 31, 2017

Honorable Ricardo A. Rosselló Nevares

Governor of Puerto Rico

La Fortaleza

PO Box 9020082

San Juan, PR 00902-0082

Honorable Thomas Rivera Schatz

President of the Senate of Puerto Rico

Honorable Carlos J. Méndez Núñez

Speaker of the House of Representatives

of Puerto Rico

Dear Governor Rosselló Nevares, Senator Rivera Schatz, and Speaker Méndez Núñez:

On July 12, 2017, the Financial Oversight and Management Board for Puerto Rico (the 

“Oversight Board”), by unanimous written consent (a copy of which is attached hereto), 

approved the revised proposed fiscal plan dated June 30, 2017 for the Government Development 

Bank for Puerto Rico (“GDB”) (a copy of which is attached hereto). We refer to the approved, 

revised fiscal plan as the “GDB Fiscal Plan.” 

The Oversight Board is pleased, pursuant to PROMESA § 201(e), to hereby certify the GDB 

Fiscal Plan as compliant with PROMESA § 201(b), and to hereby deliver this compliance 

certification to you.

The Oversight Board looks forward to working with the Commonwealth and the GDB to 

accomplish the requirements and goals of PROMESA for the benefit of the people of Puerto 

Rico and its creditors and other stakeholders.

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Honorable Ricardo A. Rosselló Nevares

Honorable Thomas Rivera Schatz

Honorable Carlos J. Méndez Núñez

July 31, 2017

Page 2 of 2

Sincerely,

José B. Carrión

Chair

Andrew G. Biggs 

Carlos M. García

Arthur J. González

José R. González

Ana J. Matosantos

David A. Skeel, Jr.

CC: Natalie A. Jaresko

 Christian Sobrino Vega

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Government Development Bank for Puerto Amended Fiscal Plan

San Juan, Puerto RicoJune 2017

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Disclaimer

The Puerto Rico Fiscal Agency and Financial Advisory Authority (“AAFAF”), the Government Development Bank for PuGovernment of Puerto Rico (the “Government”), and each of their respective officers, directors, employees, agentmembers, partners or affiliates (collectively, with AAFAF and the Government the “Parties”) make no representation oimplied, to any third party with respect to the information contained herein and all Parties expressly disclaim any swarranties.The Parties do not owe or accept any duty or responsibility to any reader or recipient of this presentation, whether in connot be liable for or in respect of any loss, damage (including without limitation consequential damages or lost profits) or nature of such third party that may be caused by, or alleged to be caused by, the use of this presentation or that is othethe gaining of access to this document by such third party.This document does not constitute an audit conducted in accordance with generally accepted auditing standards, an econtrols or other attestation or review services in accordance with standards established by the American InstitAccountants or any other organization. Accordingly, the Parties do not express an opinion or any other form of assustatements or any financial or other information or the internal controls of the Government and the information containeAny statements and assumptions contained in this document, whether forward‐looking or historical, are not guarantees and involve certain risks, uncertainties, estimates and other assumptions made in this document. The economic and finGovernment and its instrumentalities is affected by various financial, social, economic, environmental and political facto

very complex, may vary from one fiscal year to the next and are frequently the result of actions taken or not taken, not oand its agencies and instrumentalities, but also by entities such as the government of the United States. Because unpredictability of these factors, their impact cannot be included in the assumptions contained in this document. Furesults may differ materially from any estimates, projections, or statements contained herein. Nothing in this document san express or implied commitment to do or take, or to refrain from taking, any action by AAFAF, the Governmeninstrumentality in the Government or an admission of any fact or future event. Nothing in this document shall be corecommendation or advice to any person to participate, pursue or support a particular course of action or transaction, tsecurity, or to make any investment decision.By accepting this document, the recipient shall be deemed to have acknowledged and agreed to the terms of these limitaThis document may contain capitalized terms that are not defined herein, or may contain terms that are discussed in otare commonly understood. You should make no assumptions about the meaning of capitalized terms that are not dconsult with advisors of AAFAF should clarification be required.

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Table of Contents

I. Executive SummaryII. Transaction OverviewIII. Fiscal PlanIV. Fiscal Plan ImplementationV. Appendices  

i. Current Balance Sheet Informationii. Financial Modeliii. GDB Overview, History and Root Causes of its Crisis

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

I. Executive Summary

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Executive Summary• GDB was originally created to aid the Government in the performance of its fiscal duties and to more eff

responsibility to develop the economy of Puerto Rico

• Over time, GDB evolved and its role expanded to include, among other services, acting as a financin

losses of the Government, its Agencies, Municipalities, and Public Corporations

• The GDB was also called upon to provide financial support during periods of financial distress, leverag

rating, reputation, access to the capital markets and its constructive relationship with the investment cofinancial support to troubled public entities and assist them in regaining financial stability

• Due to the expansion of services and a confluence of other decisions and actions, in recent years the 

immersed in a fiscal and viability crisis

• The loss of its investment grade rating in 2014 and the resulting loss of market access left the GDB w

performing assets, limited available liquidity, and the inability to repay its debts as they come due

• With the fiscal challenges affecting the GDB, AAFAF was created to assume the roles of fiscal agent, f

disclosure agent of the Government

• Presently, the GDB’s primary role is to serve as an agent in (i) collecting on its loan portfolio and 

pursuant to strict priority guidelines

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• Given the reduced services that GDB is currently providing, an important question was asked and answ

be restructured, become a viable going concern, and reinstate its past banking operations? After review current circumstances, and the exclusion of appropriations to the GDB as payment for certified goveGovernment’s certified fiscal plan, there is no clear path to achieve long term viability for the GDB, 

financial condition(1)

• GDB leadership has concluded that an orderly wind down of its operations would mitigate the impac

(municipalities, depositors, and other creditors, etc.)

• To efficiently effectuate the orderly wind down, GDB’s management has created a Project Management 

will allow for a smooth transition of GDB’s current operations

• On May 15, 2017, AAFAF and GDB announced a Restructuring Support Agreement (“RSA”) with a signific

financial creditors, which became effective pursuant to its terms on May 17, 2017

– The RSA contemplates dividing GDB’s assets into two separate entities: a New Issuer for the be

creditors consisting of Bondholders, Municipal Depositors, and Non‐Government Entity Depositors a Public Entity Trust (“PET”) for the benefit of Other Depositors (Government Entity Depositors)

– The RSA terms are expected to be consummated pursuant to a consensual restructuring of G

Qualifying Modification

– Once approved by the requisite financial creditors of GDB, the Oversight Board, and the US Distric

the Restructuring (as defined in the RSA) will provide GDB’s stakeholders a recovery based on the c

• This GDB Amended Fiscal Plan (“Plan”) incorporates the RSA framework, resolving the mechanism by w

flow will be allocated among the New Issuer and PET

Executive Summary

(1) Analysis and assessment based on unaudited financial information

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• All fundamental new business banking and origination activities have ceased• Service the existing loan portfolio through maturity or refinancing by third party financial institutions• Coordinate and execute collection efforts on loans pursuant to the terms of the RSA• Formalize the process for a transparent and orderly sale of real estate assets at fair market value• Restructure GDB’s workforce through “Single Employer Program(2)” and voluntary separation plan

Current Objective / Services Provided

Executive SummaryGDB Snapshot(d)

204 Total Emplo

110 Union – 73 Gene

(1) GDB FY2014 Audited Financial Statements(2) Act 8 of 2017 (Single Employer Act), establishes the Government of Puerto Rico as a single Employer and allows greater mobility of public sector employees between 

Source: Government Development Bank; unaudited financial data is subject to change

Note: Differs from Assets on unaudited balance sheet:a) $494mm of ‘advances’ through the Municipal Administration Fund (FAM, for its Spanish acronym) and COFIM were recategorized from ‘Municipal’ to ‘Other’ 

b) Public Sector: Excludes investment assetsc) Municipal loans and deposits are net of a ~$25mm collateralized deposit secured my municipal loansd) Unaudited

1

Balance Sheet: Key Assets($000s) 1/31/2017

Unrestricted Cash 153,845

Municipal 2,009,570Public Sector 2,971,159

Appropriations 2,832,569

Private/Other 941,935

Adjustments (2,491,340)

Loan Portfolio 6,263,894REO Assets 62,710

Key Assets 6,480,448

Balance Sheet: Key Liabilities($000s) 1/31/2017Outstanding Balances

Deposits 3,489,214Accrued Interest 6,320

Total Deposit Balance 3,495,534

GDB Notes 3,763,817

Accrued Interest 113,602

Total GDB Note Balance 3,877,419

Key Liabilities 7,372,953

(a)(c)

(b)

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

II. Transaction Overview

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Transaction OverviewExecutive Summary• On May 15, 2017, AAFAF and GDB announced an RSA with a significant portion of GDB’s financial credito

effective pursuant to its terms on May 17, 2017

• On June 19, 2017, AAFAF and GDB announced that parties representing over 50% of GDB’s Participating 

defined in the RSA) had signed the RSA

• The RSA is consistent with the GDB Fiscal Plan certified on April 28, 2017, as it contemplates the orderly • The RSA contemplates dividing GDB’s assets into two separate entities: the New Issuer for the benefit of 

Municipal Depositors, and Non‐Government Entity Depositors and the PET for the benefit of Other DepoEntity Depositors)

• Prior to closing of the transaction, GDB seeks to 1) adjust loan balances based on undisbursed municipal

against corresponding loans, and 2) provide accelerated setoff of public entity deposits to non‐performinapplicable

Management and Trust Structure Summary• Upon closing of the transaction, unrestricted cash will be used to fund 1) PET disbursements (prioritizing

deposits), 2) transaction costs (including professional fees and contemplated settlements), 3) $25mm PEbalance, and 4) remainder (estimated at $167mm) for the benefit of the New Issuer

• Upon closing of the transaction, GDB will have 12 months to transfer the servicing of the New Issuer asse

Collateral as defined in the RSA) to a third party servicer. During this time, GDB’s operational expenses wthe New Issuer and the PET and each trust will maintain a minimum cash balance of approximately $25m

• A considerably reduced GDB operation will remain to service the New Issuer assets for up to 12 months,

PET and wind down the operations of GDB

Note: Please refer to the RSA and Term Sheet for structure details including description of securities to be issued by the New Issuer

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Transaction Overview

= +

= +

Pre Transaction Pro‐Forma Allocation Pre‐Transaction

Note: $71.0mm difference between Pre Transaction and Pro Forma key assets is due to estimated  transaction and settlement related costs (actual costs will vary)

Asset SummaryLiability Summary

Pre Transaction ‐ Key AssetsPost Setoff($000s) 9/30/2017

Unrestricted Cash 313,318

Municipal 1,657,641

Public Sector 2,591,100

Appropriations 2,119,359

Private/Other 504,846

Loan Portfolio 6,872,946REO Assets 62,710

Key Assets 7,248,974

PET ‐ Key AssetsPost Setoff($000s) 

Unrestricted Cash 

Public Sector 

Appropriations 

Loan Portfolio 

Key Assets 

PET ‐ Key LiabilitiesPost Setoff($000s) Outstanding Balances

Public Entity Depo

Total Deposit Balan

Key Liabilities 

Pre Transaction ‐ Key LiabilitiesPost Setoff($000s) 9/30/2017Outstanding Balances

Deposits 1,406,183

Total Deposit Balance 1,406,183

GDB Notes 3,763,817

Total GDB Note Balance 3,763,817

Key Liabilities 5,170,000

New Issuer ‐ Key AssetsPost Setoff($000s) 9/30/2017

Unrestricted Cash 167,338

Municipal 1,657,641

Public Sector 2,460,521

Appropriations 481,210

Private/Other 504,846

Loan Portfolio 5,104,218REO Assets 62,710

Key Assets 5,334,266

New Issuer ‐ Key LiabilitiesPost Setoff($000s) 9/30/2017Outstanding Balances

Muni Deposits 383,041NGE Deposits 181,469

Total Deposit Balance 383,041

GDB Notes 3,763,817

Total GDB Note Balance 3,763,817

Key Liabilities 4,146,858

*To show allocation of the before giving effect to any liabilities pursuant to the RNew Issuer and PET

* *

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

III. Fiscal Plan

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanFiscal Plan Approach and Assumptions• The Plan is based on the expected performance of GDB’s existing loan asset portfolio• Based on the assessment of the loan portfolio(1) and the Government’s certified fiscal plan, the Plan assu

loans, select public sector loans, and the sale of real estate owned assets are the only sources of revenue

• To the extent a loan asset is “non‐performing”, the Plan assumes such loan remains “non‐performing” an

not be a source of future inflows, although GDB, or any successor entity, reserves the right to pursue col

• The Plan assumes the orderly sale or other legally available disposition of real estate owned assets at fai

a period of 24 months

• Although GDB’s operations are expected to be wound down in a shorter period, the Plan reflects a reduc

operating activities during the 10 year projection period, given the uncertainty surrounding existing and and collection efforts of PET assets

• The Plan assumes a cash balance of approximately $25mm is maintained at each of the New Issuer and P

adequate funding of their operations for 12 months post closing. After 12 months the New Issuer and PEminimum cash balances of $5mm and $10mm, respectively

• The Plan is not contradictory to the Government’s certified fiscal plan and other instrumentality fiscal pla

– GDB has confirmed with AAFAF and its advisors that public sector deposits at GDB do not have an 

Government’s certified fiscal plan as none of the component units assume the disbursement of su

– GDB has confirmed with AAFAF and its advisors that assumptions in the Plan are consistent with a

instrumentality fiscal plans, where applicable

(1) As of January 31, 2017 ‐ Unaudited

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanOverview – Combined New Issuer and PET

Note: FY 2018 beginning cash balance and transaction costs are estimates Source: GDB. Financial projections are based on unaudite

Government Development BankFiscal Plan ‐ Fund Flows($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

2018 2019 2020 2021 2022 2023 2024 2025 2026 

New Issuer Inflows 70,011           196,334         168,285         168,738         172,802         175,078         178,654         176,428         175,55

        

PET Inflows 9,123              14,091           14,031           13,982           13,933           13,779           11,775           11,726           11,67

          

Pre‐Transaction Inflows 164,389         ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  

Total Cash Inflows 243,523         210,425         182,316         182,720         186,736         188,857         190,429         188,154         187,23

        

New Issuer Outflows ‐                  3,237              6,291              6,111              5,926              5,736              5,538              5,340              5,13

             

PET Outflows 19,054           6,718              3,874              3,914              3,912              3,968              4,024              4,085              4,14

             

Pre‐Transaction Outflows 9,834              ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  

Total Operating Outflows 28,888           9,955              10,165           10,025           9,837              9,704              9,562              9,425              9,28

             

Net Cash Flows 214,635         200,470         172,151         172,695         176,898         179,153         180,867         178,729         177,94

        

Beginning Cash Balance 158,763         50,000           15,000           15,000           15,000           15,000           15,000           14,979           14,99

          

Net Cash Flows 214,635        200,470        172,151        172,695        176,898        179,153        180,867        178,729        177,94

       

Transaction Costs (70,980)         ‐                 ‐                 ‐                 ‐                 ‐                 ‐                 ‐                 ‐                 

Disbursements (252,418)       (235,470)       (172,151)       (172,695)       (176,898)       (179,153)       (180,888)       (178,718)       (177,93

      

Ending Cash Balance 50,000           15,000           15,000           15,000           15,000           15,000           14,979           14,990           15,00

          

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanNew Issuer Overview ‐ Beginning at Transaction Close (9/30/17)

Source: Government Development Bank. 

Note: Differs from Assets on unaudited balance sheet:a) $494mm of ‘advances’ through the Municipal Administration Fund (FAM, for its Spanish acronym) and COFIM were recategorized from ‘Municipal’ to ‘Other

Note: Trust is set up at transaction closing (assumed 9/30/17) all prior ca

New Issuer ‐ Key LiabilitiesPost Setoff($000s) 9/30Outstanding Balances

Muni Deposits 3NGE Deposits 1

Total Deposit Balance 3

GDB Notes 3,7

Total GDB Note Balance 3,7

Key Liabilities 4,1

New Issuer ‐ Key AssetsPost Setoff($000s) 9/30/2017

Unrestricted Cash 167,338

Municipal 1,657,641Public Sector 2,460,521

Appropriations 481,210

Private/Other 504,846

Loan Portfolio 5,104,218REO Assets 62,710

Key Assets 5,334,266

*To show allocation of the Key Assets and Key before giving effect to any modification of such liabilities pursuant to the Restructuring, as betNew Issuer and PET

* *

Government Development BankFiscal Plan ‐ Fund Flows ‐ New Issuer($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

2018 2019 2020 2021 2022 2023 2024 2025 2026 

Municipal Loans 38,427           174,291         168,273         168,725         172,790         175,066         178,642         176,416         175,54

        

REO Asset Sales 31,525           22,016           ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  

Interest on Cash 60                   27                   13                   13                   13                   13                   13                   13                   1

                  

New Issuer Inflows 70,011           196,334         168,285         168,738         172,802         175,078         178,654         176,428         175,55

        

Trust Servicing Fee ‐                  3,237              6,291              6,111              5,926              5,736              5,538              5,340              5,13

             

GDB Funding 13,385           1,245              ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  

Total Operating Outflows 13,385           4,482              6,291              6,111              5,926              5,736              5,538              5,340              5,13

             

Net Cash Flows 56,627           191,852         161,994         162,627         166,877         169,342         173,116         171,088         170,41

        

Beginning Cash Balance 167,338         25,000           5,000              5,000              5,000              5,000              5,000              5,000              5,00

             

Net Cash Flows 56,627           191,852        161,994        162,627        166,877        169,342        173,116        171,088        170,41

       

Disbursements (198,965)       (211,852)       (161,994)       (162,627)       (166,877)       (169,342)       (173,116)       (171,088)       (170,41

      

Ending Cash Balance 25,000           5,000              5,000              5,000              5,000              5,000              5,000              5,000              5,00

             

Note: Unused cash balance held at PET above a minimum amount to be negotiated under the RSA will be disbursed to the New Issuer 12 months post close – Not contemplated in

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanPET and Wind Down of GDB Overview – Beginning at Transaction Close (

Note: Differs from Assets on unaudited balance sheet:a) $494mm of ‘advances’ through the Municipal Administration Fund (FAM, for its Spanish acronym) and COFIM were recategorized from ‘Municipal’ to ‘Other

PET ‐ Key AssetsPost Setoff($000s) 9/30/2017

Unrestricted Cash 75,000

Public Sector 130,580

Appropriations 1,638,148

Loan Portfolio 1,768,728

Key Assets 1,843,728

PET ‐ Key LiabilitiesPost Setoff($000s) 9/30Outstanding Balances

Public Entity Deposits 1,0

Total Deposit Balance 1,0

Key Liabilities 1,0

Source: Government Development Bank; unaudited financial data is subject to change

Note: Trust is set up at transaction closing (assumed 9/30/17) all prior ca

*To show allocation of the Key Assets and Key Lbefore giving effect to any modification of such liabilities pursuant to the Restructuring, as betwNew Issuer and PET

* *

Government Development BankFiscal Plan ‐ Fund Flows ‐ PET($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

2018 2019 2020 2021 2022 2023 2024 2025 2026 

Public Sector Loans 9,076              14,055           14,007           13,958           13,909           13,754           11,751           11,702           11,65

          

Interest on Cash 47                   36                   25                   25                   25                   25                   24                   24                   2

                  

From New Issuer 13,385           1,245              ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  

GDB Inflows 22,507           15,336           14,031           13,982           13,933           13,779           11,775           11,726           11,67

          

Payroll and Related 7,390              2,320              1,010              1,021              1,034              1,050              1,066              1,083              1,10

             

Other Operating 11,664           4,398              2,864              2,893              2,877              2,918              2,958              3,003              3,04

             

Total Operating Outflows 19,054           6,718              3,874              3,914              3,912              3,968              4,024              4,085              4,14

             

Net Cash Flows 3,453              8,618              10,157           10,068           10,022           9,811              7,751              7,641              7,53

             

Beginning Cash Balance 25,000           25,000           10,000           10,000           10,000           10,000           10,000           9,979              9,99

             

Net Cash Flows              8,618 3,453              10,157           10,068           10,022           9,811              7,751              7,641              7,53

             

Transaction Flows           ‐ 50,000                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  Disbursements (53,453)         (23,618)         (10,157)         (10,068)         (10,022)         (9,811)           (7,772)           (7,630)           (7,52

          

Ending Cash Balance 25,000           10,000           10,000           10,000           10,000           10,000           9,979              9,990              10,00

          

Note: Unused cash balance held at PET above a minimum amount to be negotiated under the RSA will be disbursed to the New Issuer 12 months post close – Not contemplated in

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanInflows Approach and Assumptions – Combined New Issuer and PETThe Plan assumes projected inflows from assets including (a) cash and cash equivalents, (b) loan portfolio asestate assets based on GDB’s unaudited balance sheet as of January 31, 2017

Item Assumption

Cash on Hand(1)

Assumes a combined minimum cash balance of ~$50mm earning interest at an annualizeMinimum cash balance of $25mm for each of the New Issuer and the PET Trust for 12 mreduced to $5mm and $10mm, respectively (subject to change based on negotiations wi

Loan Assets:

Appropriation Loans Government’s certified fiscal plan does not include appropriations after June 30, 2017 toMunicipality Loans

Assumes the municipalities will pay all of their loans as contracted. The Plan assumes tha

balances will be adjusted downward on the transaction closing date to account for muni

There have been instances when municipalities have made late payments on their revenloans, or may have other delinquent statutory debts with other Government entities, allprior to the disbursement of any excess CAE funds historically held by GDB and now bein

account at Banco Popular with GDB as TrusteeBased on the repayment structure, safeguards of municipal obligations, and historical pe

assumed any impairments on future cash flows

Public Sector Loans

Assumes debt service payments on four loans(3) will continue based on a review of histor

collateral.  For all other remaining loans, Plan assumes no debt service will be collected, the right to pursue collection efforts

Private Loans Assumes no debt service on private loans will be collected; however, GDB reserves the r

efforts

Other Assets:

Real Estate Owned (REO) Assets Assumes real estate assets are sold at fair market values within a two‐year time frame

(1) Cash on Hand is subject to revision       (2) GDB Actual interest rate earned on Cash on Hand       (3) Includes two loans with CRIM, one loan with BDE, and one loan with Servicios Medicos Universitarios

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanSummary of Inflows – 2018 – 2027 – Combined New Issuer and PETThe Plan projects $1.9bn of Total Cash Inflows to be collected during the projection period primarily comprised of loan portfolio collections• Appropriation Loans: Generate no cash flow pursuant to Government’s 

certified fiscal plan of March 13, 2017, as amended

• Municipal Loans: Generate $1.76bn of cash flow over the projection period. 

Cash flows are based on contracted interest and amortization schedules

• Public Sector Loans: Generate $129mm of cash flow over the projection 

period. Cash flows are based on four loans that are expected to perform based on contracted interest and amortization schedules

Source: Government Development Bank; unaudited financial data is subject to change

Composition of Inf

Loan

Amortization

55%

Other

3%

Government Development BankSummary of Cash Inflows($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

2018 2019 2020 2021 2022 2023 2024 2025 2026 

Inflows from Loan Portfolio

Total Appropriation Loans ‐              ‐              ‐              ‐              ‐              ‐              ‐              ‐              ‐              

Total Municipal Loans 197,614     174,291     168,273     168,725     172,790     175,066     178,642     176,416     175,54

    

Total Public Sector Loans 14,104       14,055       14,007       13,958       13,909       13,754       11,751       11,702       11,65

      

Total Loan Inflows 211,718     188,347     182,279     182,683     186,699     188,820     190,393     188,118     187,19

    

Other Inflows

PR HTA Bond Interest ‐              ‐              ‐              ‐              ‐              ‐              ‐              ‐              ‐              

Dividends and Interest ‐              ‐              ‐              ‐              ‐              ‐              ‐              ‐              ‐              

Interest on Cash 286             63               37               37               37               37               36               36               3

              

REO Asset Sales 31,525       22,016       ‐              ‐              ‐              ‐              ‐              ‐              ‐              

Total Cash Inflows 243,528     210,425     182,316     182,720     186,736     188,857     190,429     188,154     187,23

    

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Exhibit N to Declaration Page 20 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanDetail of Loan Portfolio Inflows – 2018 – 2027 – Combined New Issuer an

Source: Government Development Bank; unaudited financial data is subject to change

Municipal Portfolio by Cash Inflow

CAE

64%

IVU

24%

Operational

9%

Revenue

3%

Government Development BankFiscal Plan ‐ Cash Inflows from Loan Portfolio($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

2018 2019 2020 2021 2022 2023 2024 2025 2026 

Municipal Portfolio Cash Flows

CAE 129,633        113,285        108,491        108,560        110,745        111,543        113,461        113,620        113,950      

IVU 45,11          40,841 7          40,280          41,159          42,772          44,099          45,214          41,863          42,043        

Operational          15,195 17,835          14,488          13,936          14,346          14,441          14,86          15,200 7          14,400        

Revenue 5,028             4,970             5,013             5,070             4,928             4,984             5,100             5,733             5,148          

Municipal Portfolio 197,614         174,291         168,273         168,725         172,790         175,066         178,642         176,416         175,541      Appropriation ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐                  ‐               Public Sector Loans 14,104           14,055           14,007           13,958           13,909           13,754           11,751           11,702           11,653         Cash Flow From Loan Portfolio 211,718         188,347         182,279         182,683         186,699         188,820         190,393         188,118         187,194      

Total Loan Portfolio by Cash Inflow

Municipal

90%

Apropriation

3%

Public Sector

7%

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Exhibit N to Declaration Page 21 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanReal Estate Owned (REO) Assets• GDB owns a portfolio of real estate assets, the majority of which were transferred to the Bank in exchange

on December 30, 2008 used by the central government to cover a portion of the FY 2008‐2009 deficit. Threpayment for the $150mm loan was expected to come from the sale proceeds of the properties; howeveefforts have been uncoordinated and inconsistent with only a handful of properties sold between 2011 an

• GDB has created an REO Management and Disposition Working Group Committee with the objective of m

REO properties through an open, transparent, and orderly process within 24 months

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Exhibit N to Declaration Page 22 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanOutflows Approach and Assumptions – Combined New Issuer and PETThe Plan assumes projected outflows consisting of operational expenses deemed necessary to ensure an ordadjusted for inflation per the Government’s certified fiscal plan

Item Assumption

Payroll and Benefits Workforce restructuring started April 1, 2017 with targeted annual payroll of $1mm by FY20

consistent with the Governments certified fiscal plan)

Rent and Utilities 

Assumes rent and utilities will be paid throughout projection period reduced by 50%, pro rat

starting July 1, 2017 through the end of FY2018 and an additional reduction to 10% of pre‐w

FY2019

Other General Operating Expenses Assumes only critical and essential operating expenses; such expenses will be reduced throu

period with a target of $4mm for all operating expenses by 2020

Workforce Restructuring Assumes cost to implement a workforce restructuring through the Single Employer Act(1) and

plan

Professional and Legal Fees Assumes costs for legal and financial professionals deemed necessary during the wind down 

85%  by 2020 (may need to be revised – seek additional resources from AAFAF, as needed)

New Issuer Servicing Fee Portfolio servicing fee assumed to be 20bps of the New Issuer AUM paid semiannually from c

the New Issuer assets

(1) Act 8 of 2017: An Act for the Transformation and Administration of Human Resources of the Government of Puerto Rico

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Exhibit N to Declaration Page 23 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanSummary of Outflows – 2018 – 2027 – Combined New Issuer and PETThe Plan projects $2.0bn of Total Cash Outflows during the projection period • Operating Expenses: Projected to steadily decline throughout the 

projection period. Expenses are reduced to essential services required to 

wind down operations

• Distributions: Distributable cash flow is projected to be $1.9bn through the 

projection period and will be allocated among GDB’s creditors pursuant to the terms of the RSA

Note: FY 2017 Disbursements are estimates and subject to material change

Operating outflows are subject to further adjustments a

Composition of O

Distributions

94%

New Issuer 

Servicing Fee

3%

Government Development BankSummary of Cash Outflows($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fisca

2018 2019 2020 2021 2022 2023 2024 2025 2026 

Total Payroll Related 12,190       2,320           1,010          1,021          1,034          1,050          1,066          1,083          1,1

         

Rent/Utilities 643             89                 90               91               92               93               95               96               

            

Legal services 6,688          1,733           1,263          1,276          1,293          1,312          1,332          1,353          1,3

         

Professional services 4,865          1,567           1,010          1,021          1,034          1,050          1,066          1,083          1,1

         

Other Operating Outflows 4,503          1,009           502             505             458             462             466             470             4

            

Total Operating Outflows 28,888       6,718           3,874          3,914          3,912          3,968          4,024          4,085          4,1

         

New Issuer Servicing Fee ‐              3,237           6,291          6,111          5,926          5,736          5,538          5,340          5,1

         

Distributions 252,423     235,470      172,151     172,695     176,898     179,153     180,888     178,718     177,9

    

Total Outflows 281,311     245,425      182,316     182,720     186,736     188,857     190,450     188,143     187,2

    

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Exhibit N to Declaration Page 24 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanSummary of Payroll and Payroll Related Expenses – Combined New IssueThe Plan projects over 90% decline in aggregate payroll expenses to $1mm by FY2020 as operations wind dowassumes the workforce restructuring to be in accordance with the Single Employer Act(1) and incentivized sep

be implemented in three phases:

• Phase One (Initial 30% reduction in payroll):

− Restructuring costs are estimated to be $2.65mm and take place by June 30, 2017 (Achieved

• Phase Two (Additional 45% reduction in payroll):

− Restructuring costs are estimated to be $4.0mm and will take place evenly across FY2018

• Phase Three (Reduction to $1mm of annual payroll expense): 

− Expected to occur 12 months after transaction closing when GDB transfers performing asset

servicer

• Pro forma payroll expense at GDB is projected to be ~$1.0mm per year by FY2020 and beyond (current run‐r

(1) Act 8 of 2017 (Single Employer Act), establishes the Government of Puerto Rico as a single Employer and allows greater mobility of public sector employees between Governmen

Source: Government Development Bank; unaudited financial data is subject to change

Operating outflows are subject to further adjustments a

Government Development BankFiscal Plan ‐ Fund Flows ‐ Consolidated($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

7/31/17 8/31/17 9/30/17 10/31/17 11/30/17 12/31/17 1/31/18 2/28/18 3/31/18 4/30/18 5/31/18 6/30/18 

Projected OutflowsOperating Disbursements

Salaries & Wages 620               585           550           515            480            445            409             374            339            304            269            234            

Fringe Benefits 375               353           332           311            290            269            247             226            205            184            163            141            

Workforce Restructuring 662               662           662           662            662            662            ‐              ‐            ‐            ‐            ‐            ‐            

Total Payroll ‐ Subsidiary ‐                ‐           ‐           ‐             ‐             ‐             ‐              ‐            ‐            ‐            ‐            ‐            

Total Payroll Related 1,656            1,600       1,544       1,487         1,431         1,375         657             601            544            488            432            375            

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Exhibit N to Declaration Page 25 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanSummary of Non‐Payroll Operating ExpensesThe Plan projects a 84% reduction in non‐payroll operating expenses by FY2020 as operations wind down and further reductions occur throughout the projection period• Other Expenses: GDB will transfer the servicing of its performing 

loan portfolio to a third party and will transfer corporate functions to AAFAF, while retaining only essential operations to complete its wind down

Source: Government Development Bank; unaudited financial data is subject to change

Note: Operating outflows are subject to further adjustments arising from

Composition of Non‐Payroll O

Rent Expen

14%

Insura

26%

Software

13%

Audit

19%

Security

1%

Trustee 

Fees

2%

Contingency

20%

Government Development BankSummary of Non‐Payroll Expenses($000s) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fis

2018 2019 2020 2021 2022 2023 2024 2025 2026 20

Rent/Utilities Expense 643            89               90               91               92               93              95              96              98              

        

Legal Services 6,688         1,733         1,263         1,276         1,293         1,312        1,332        1,353        1,375        1

       

Professional Services 4,865         1,567         1,010         1,021         1,034         1,050        1,066        1,083        1,100        1

       

Other Expenses

Documents Storage 270        5             5             5             5             5            5            5            6            

Utilities‐ Telephone  30           20           10           10           10           10          11          11          11          

Insurance 2,287     500        ‐         ‐         ‐         ‐         ‐         ‐         ‐         

Software 621        78           79           80           81           82          84          85          86          

Audit 608        150        152        153        155        157        160        162        165        

Security 99           ‐         ‐         ‐         ‐         ‐         ‐         ‐         ‐         

Service and Trustee Fees 265        ‐         ‐         ‐         ‐         ‐         ‐         ‐         ‐         

Maintenance 51           ‐         ‐         ‐         ‐         ‐         ‐         ‐         ‐         

Office Supplies 22           6             6             6             6             6            6            6            7            

Contingency 250        250        250        250        200        200        200        200        200        

Total Other Outflows 4,503         1,009         502            505            458            462            466            470            474            

        

Total Non‐Payroll Outflows 16,698      4,398         2,864         2,893         2,877         2,918        2,958        3,003        3,047        3

       

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Exhibit N to Declaration Page 26 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal PlanDebt Sustainability AnalysisThe fiscal plan will restructure GDB as GDB will not be able to service its current obligations according to con

Source: Government Development Bank; unaudited financial data is subject to change

Government Development BankSenior Unsecured Note ‐ Summary of Pre‐Restructuring Obligations

($ millions) 2018 2019 2020 2021 2022 2023 2024 GDB Available Cash Flow 252                 235                 172                 173                 177                 179                 181                 

Contractual Debt Service

Principal                 848 277                 432                 434                 143                 47                   541                 

Interest                 123 140                 79                   55                   4                   43 6                   18                   

Total Contractual Debt Service 417                 971                 512                 488                 189                 91                    559                 

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Exhibit N to Declaration Page 27 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Fiscal Plan GDB SubsidiariesGDB is authorized under Article 2 of its enabling act, Act 17 of 1948, to create subsidiaries by resolution of thThe GDB Charter provides that GDB Subsidiaries shall constitute government instrumentalities, independent oGDB(1). GDB is currently working with external legal counsel to determine the best approach to legally and op

itself from its subsidiaries and affiliatesPuerto Rico Housing Finance Authority (HFA)

Subsidiary of GDB and a government instrumentality of the Government, created in 1977 for the purpoconstruction, reconstruction, improvement, alteration and repair of decent, safe and sanitary dwellings foincome under state and federally subsidized homeownership programs• HFA has approximately $400mm of tax‐exempt bonds outstanding that are limited obligations p

underlying mortgages and payments thereon or funds allocated to the Puerto Rico Public Housing Admin

• HFA owes approximately $85mm to GDB. For purposes of the Plan, it is assumed that GDB will not colle

although it reserves the right to pursue collection efforts

• HFA has $164mm in deposits at GDBGiven the current financial condition of HFA, GDB has not assumed any additional collections from HFAPuerto Rico Development Fund (PRDF)

Established in 1977 to provide an alternate source of financing to private enterprises, including to provide guin equity securities of such enterprisesThe Plan assumes no collections from PRDF are received by GDBSubsidiaries, Guarantees and Letters of Credit

(1) Section Fourth (J)(1) of the GDB Charter, 7 L.P.R.A § 552

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Exhibit N to Declaration Page 28 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Puerto Rico Tourism Development Fund (TDF)Created in 1993 to promote the hotel and tourism industry by making capital investments in, or by providing indirectly (through the use of letters of credits and guarantees) to, entities that can contribute to the developm• TDF has experienced significant losses and has an accumulated net deficits due to decreased economic 

and tourism industries in recent years

• Although TDF has covered its deficits through contributions from the Government, as permitted by l

financial support provided by GDB, no additional contributions or support are expected

– The Government’s certified fiscal plan does not assume any appropriations allocated to TDF

• No recourse to GDB: GDB has confirmed, through an analysis by outside legal counsel, that the resolut

“specifically provides that GDB shall not be liable for the payment of any of TDF’s debts “of any natuguaranteed by GDB”

• As of December 31, 2016, TDF had outstanding guarantees on financings for six projects totaling $247

three projects with combined outstanding balances of $31.8 mm. All outstanding guarantees are nonthe three outstanding loans is non‐current

• TDF reserves the right to pursue collection efforts on all of its private sector loansGiven the current financial condition of TDF, GDB has not assumed any additional collections from TDF

Fiscal Plan Subsidiaries, Guarantees and Letters of Credit

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Exhibit N to Declaration Page 29 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Other Guarantees and/or Letters of Credit

• GDB Direct‐Pay Letter of Credit (“Direct‐Pay LOC”) securing Puerto Rico Infrastructure Financing Auth

(Ports Authority Project), Series 2011 A and 2011 B with a current outstanding balance of $196mm. T

currently outstanding with an expiration date of December 15, 2026. GDB has included this guarantebalance sheet presented in this fiscal plan, pari passu with other senior unsecured creditors

• GDB Stand‐by Letter of Credit (“Stand‐by LOC”) for the benefit of Puerto Rico Public Finance Corporatio

B Bonds and 2012 Series A Bonds (the “Bonds”). The Stand‐by LOC does not impact GDB’s Fiscal Plan. T

draw from the Stand‐by LOC when a budget for a new fiscal year is not approved and adopted, a legislatthe current fiscal year exists and is lower than the debt service payment due on the Bonds for the next fnew budget is not adopted. In such an instance, the Stand‐by LOC may be drawn in the amount that the Bonds for the upcoming fiscal year is higher than the appropriated amount for debt service on the Bond

fiscal year, if any

– The Stand‐by LOC is not intended to and does not cover the risk that no appropriation is made b

Puerto Rico for any particular fiscal year, or that an appropriation is made in an amount lower debt service on the Bonds due with respect to any fiscal year. If the budget for any fiscal yeaappropriation for the payment of the Bonds is included in such budget, or an appropriation is lower than the amount of debt services on the Bonds, the Trustee may not make a drawing under 

Fiscal Plan Subsidiaries, Guarantees and Letters of Credit

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Exhibit N to Declaration Page 30 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Public Private Partnerships and Respective Payment GuaranteesPR‐22 and PR‐5 Toll Roads(1)• GDB payment guarantee in favor of Metropistas (toll road operator) for any “Termination Damages” due 

by the Puerto Rico Highways and Transportation (HTA in turn agreed to reimburse GDB)

Luis Muñoz Marín International Airport(2)• GDB payment guarantee in favor of Aerostar (airport operator) for any “Termination Damages” due and 

the Puerto Rico Ports Authority, which would be reimbursable to GDB by the Ports Authority

On February 23, 2017, GDB and AAFAF received a letter from the Puerto Rico Public Private Partnership Associndicated that a “restructuring (rather than a liquidation) of the GDB is clearly the preferred and most beneficiThe Plan assumes the payment guarantees remain outstanding during the wind down periodSource:(1) Concession Agreement between Metropisas and HTA and Reimbursement Agreement between HTA and GDB(2) Lease Agreement between Aerostar and Ports Authority and Reimbursement Agreement between Ports Authority and GDBFiscal Plan Subsidiaries, Guarantees and Letters of Credit

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Exhibit N to Declaration Page 31 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

IV. Fiscal Plan Implementation

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Exhibit N to Declaration Page 32 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Board of Directors

Office of the 

President 

General Counsel Chief Financing  Officer

PMO

Chief Operating 

Officer

Public Corporation 

Loans 

Management 

Working Group

Liquidity Management 

Working Group

Public Agency 

Loans 

Management 

Working Group

Municipal Loans 

Management 

Working Group

Liquidity Management Asset Management

PMO StructureFiscal Plan Implementation

Loan Asset Management

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Exhibit N to Declaration Page 33 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• GDB has established a project management office (“PMO”) to drive the implementation o• PMO leadership, comprised of senior GDB personnel, has created PMO working groups, to

required work to advance assigned Plan initiatives.  The daily activities of these working gmanaged and undertaken by internal GBD staff knowledgeable in the relevant subject maassigned members meet regularly with PMO leadership to report on progress and facilitatdecision‐making 

• PMO leadership will ensure that implementation of initiatives are in compliance with the 

legal and regulatory evaluations are undertaken, and best practices are incorporated whePMO leadership is also responsible for escalating any decisions requiring approval by the and/or its Board of Directors

• Detailed implementation plans were submitted to the Oversight Board on May 28, 2017

GDB Project Management OfficeDriving Fiscal Plan Implementation

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Exhibit N to Declaration Page 34 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

V. Appendices

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Exhibit N to Declaration Page 35 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

V.i. Current Balance Sheet 

Information

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Exhibit N to Declaration Page 36 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• GDB’s balance sheet includes a significant number of “non‐

performing” assets

• Historically, GDB accounted for its inherent losses in its public

sector loan portfolio following applicable financial reporting andaccounting pronouncements and experiences on recoveries onits loan portfolio over several decades

• Events between 2013 and 2016 resulted in loss of investment

grade rating and market access that caused:

– Total allowance for loan losses amounted to

approximately $2.5bn, in audited FY2014 FinancialStatements

• “Clawback” of revenues by the Government in its certified fiscal

plan permanently impaired a large portion of GDB publiccorporation loans

Current Balance Sheet

Source:  GDB Accounting Department Draft Financial Statements

($ in millions) 

Assets:

Cash & Cash Equivalents Loans:

Public Entity Loans Municipal Loans Private Sector Loans Allowance for Loan Losses 

Total Loans, net Accrued Interest Recievable:

Investments Public Entity Loans Municipal Loans Private Sector Loans 

Total Accrued Interest Receivable Real Estate Owned Other Assets 

Total Assets Liabilities:

Total Deposits Allowance For Losses on Guarantees and Accrued Interest Payable Accounts Payable Notes Payable Total Liabilities Net Position 

Total Liabilities and Net Position 

Note: 1) From unaudited Balance Sheet2) Accounts Payable includes $360mm of G3) Allowance for Loan Losses from GDB FY

Statements

4) COFIM and FAM advances totaling $326

respectively, are being reconciled againsmunicipal IVU from each entity. FAM advcompletely where COFIM would still owe

Current Balance Sheet Information

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GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• All loans to municipalities are currently performing while substantially all other public sector loans are noLoans

Note: Differs from Assets on unaudited balance sheet:1) As of 1/31/17, Unaudited2) Public Loans: Excludes Investment assets3) COFIM and FAM advances totaling $326.2mm and $1

being reconciled against deposits received from munentity. FAM advances will be netted out completely wowe $57.2mm to GDB.

GDB Loan Portfolio

($ in millions)

Public Corporation:

Highways & Transportation Authority (HTA) $1,733.7Special Communities Trust 345.8Ports Authority 286.5CRIM ‐ Ponce 107.4PR Industrial Development Company (PRIDCO) 77.8Other Public Corporation Loans 419.9

Total Public Corporation Portfolio $2,971.2

Public Agency:

Hacienda $884.6Medical Services Administration (ASEM) 282.4Office of Management and Budget (OMB) 265.5Health Insurance Administration (ASES) 183.3Public Buildings Authority 182.2Other Public Agency Loans 1,034.7

Total Public Agency Portfolio $2,832.6

Municipal:

San Juan $414.6Guaynabo 143.1Ponce 98.2Toa Baja 75.9Aguadilla 71.9Other Municipal Loans 1,232.7

Total Municipal Portfolio $2,036.4

Private:

Total Private Portfolio $1.0

Total Portfolio $7,841.1

GDB Total Loan Portfolio

($ in millions)

Public Loans Municipal Loans Municipal FAM Advances Municipal COFIM Advances Private Sector Loans / Other AFV Reverse Repo 

Gross Loans 

Adjustments 

Net Loans 

Current Balance Sheet Information

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Exhibit N to Declaration Page 38 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO 

Deposits• As of February 28, 2017, GDB held approximately $3.03bn(1), net of COFIM and FAM, in deposits for vario

agencies, corporations, municipalities and other entities.  Access to these deposits is restricted

• Most depositors have transitioned their operating accounts away from GDB and have been transacting via

since April 2016

Source: GDB(1) Balance of deposits excludes $268mm and $196mm of COFIM and FAM deposits, respectively, that are the repayment of advances made by GDB to municipalities before July 1st, 

GDB is currently reconciling its books to reflect this. Net effect will be an advance payable from COFIM to GDB of $57.2mm. All amounts unaudited

(2) Includes $188mm representing repayments by PRASA to the State Revolving Fund Loans(3) Indicates funds deposited by Science and Technology Trust are from a private non‐profit entity(4) Excluded from the presentation of Top 20 Depositors are affiliated entities of GDB. Tourism Development Fund (TDF) and Housing Finance Authority (HFA) maintain deposit balan

respectively

Current Balance Sheet Information

Top 20 GDB Depositors (2/28/17)1

($ in millions)

Depositor Balance Depositor PR Treasury Department 504        PR Highways and Transportation Authority PR Infrastructure Financing Authority2        Puerto Rico State Insurance Fund 

230

PR Electric Power Authority 150        PR Public Buildings Authority 

Municipality of San Juan 145        Land Administration Special Communities Perpetual Trust 102        Municipality of Mayaguez PR Science & Technolgy Trust3          PR Tourism Company 

92

University of Puerto Rico 92          Government Employees Retirement System 

Department of Labor and Human Resources 82          Agricultural Enterprises Development Administration (AD

Municipality of Carolina 73          Municipality of Guaynabo 

Special Fund Health and Operational Safety 49          Other 

Total Deposits 

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Exhibit N to Declaration Page 39 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO 

Senior Unsecured Medium Term NotesDescription of GDB’s Medium Term Notes (MTN) Program• MTNs are highly customizable debt securities that serve the needs of both issuers and investors and are 

funding for government agencies and corporations

• MTNs are an effective tool of asset‐liability management for issuers and buyers as they can match terms• Following the 2008 global financial crisis, GDB shifted its reliance from commercial paper to a Medium Te

Unsecured Notes program (MTNs) for funding purposes, which provided a more stable source of fundingpredictable rates

• From 2006 to 2010, GDB MTNs were issued exclusively to Puerto Rico retail and institutional investors• Between 2011 and 2012, GDB was able to restructure the maturity profile of its MTNs to allow for a long

maturity schedule

• Concurrently, GDB was able to diversify the composition of its investor base by issuing notes outside Pue• Proceeds from MTNs were used to fund GDB’s lending activities with, the Government, certain instrumen

municipalities

• After losing its investment grade rating and market access in 2014, GDB has been unable to refinance it

facing a severe liquidity crisis

Source of Repayment• GDB MTNs are general, unsecured obligations, except for the Series 2013 B‐1 Notes that were guarantee

Government and purchased and held by the State Insurance Fund

• GDB generates revenues to repay its obligations primarily from interest and principal payments from its l

• Loss of appropriations from the Government and “claw back” of other revenues previously used to fund 

certain public corporations debt severely impeded GDB’s ability to meet obligations

Current Balance Sheet Information

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Exhibit N to Declaration Page 40 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

V.ii. Financial Model

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 41 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Financial ModelPre‐transaction Monthly Projections

Operating outflows are subject to further adjustments a

Source: GDB. Financial projections are based on unaudited financial data provided by GDB

Government Development BankFiscal Plan ‐ Fund Flows ‐ Consolidated($000s)

7/31/17 8/31/17 9/30/17

Projected InflowsLoan Asset Portfolio Interest Income:

Appropriation Loans ‐            ‐            ‐Municipal Loans 159,186   ‐            ‐Public Sector Loans 4,318       172           538

Total Loan Asset Portfolio Inflows 163,505   172           538

Other Cash Receipts:

PR HTA Revenue Bond Interest ‐            ‐            ‐Interest and Dividend Income ‐            ‐            ‐Interest Income on Cash Deposits 50             66             58

Total Other Inflows 50             66             58

REO Asset Sales ‐            ‐            ‐

Total Cash Inflows 163,555   238           597Projected Outflows

Operating Disbursements

Salaries & Wages 620           585           550Fringe Benefits 375           353           332Workforce Restructuring 662           662           662Total Payroll ‐ Subsidiary ‐            ‐            ‐

Total Payroll Related 1,656       1,600       1,544

Rent/Utilities 70             67             64Legal Services 716           716           716Professional Services 422           422           422Other Operating Outflows 473           473           473

Total Operating Outflows 3,337       3,278       3,219Creditor Trust Servicing Fee ‐            ‐            ‐

Net Cash Flows 160,217   (3,040)      (2,622)Beginning Cash Balance 158,763   318,980   315,940

Net Cash Flows 160,217   (3,040)      (2,622)Transaction Costs ‐            ‐            (70,980)Disbursements ‐            ‐            ‐

Ending Cash Balance 318,980   315,940   242,338

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 42 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Financial ModelNew Issuer Monthly Projections

Source: GDB. Financial projections are based on unaudited financial data provided by GDB

Operating outflows are subject to further adjustments arising 

Note: New Issuer is set up at transaction closing (assumed 9/30/17); all prio1) 9 months

Government Development BankFiscal Plan ‐ Fund Flows ‐ New Issuer($000s) 

10/31/17 11/30/17 12/31/17 1/31/18 2/28/18 3/31/18 4/30/18 5/31/18 6/30/

Projected Inflows

Loan Asset Portfolio Interest Income:

Appropriation Loans ‐             ‐             ‐             ‐              ‐             ‐             ‐             ‐             ‐             

Municipal Loans ‐             ‐             ‐             38,427       ‐             ‐             ‐             ‐             ‐             

Public Sector Loans ‐             ‐             ‐             ‐              ‐             ‐             ‐             ‐             ‐             

Total Loan Asset Portfolio Inflows ‐             ‐             ‐             38,427       ‐             ‐             ‐             ‐             ‐             

Other Cash Receipts:

Interest Income on Cash Deposits 20               5                 5                 5                 5                5                5                5                

           

REO Asset Sales ‐             ‐             3,905         ‐              ‐             8,779        ‐             ‐             18,8

     

Total Other Inflows 20               5                 3,910         5                 5                8,784        5                5                18,8

     

Total Cash Inflows 20              5                 3,910         38,432       5                8,784        5                5                18,8

     

Projected Outflows

New Issuer Servicing Fee             ‐ ‐             ‐             ‐              ‐             ‐             ‐             ‐             ‐             

GDB Funding 2,982         2,923         2,647         ‐              1,507        ‐             1,388        1,522        4

           

Net Cash Flows        (2,918) (2,962)        1,264         38,432       (1,502)       8,784        (1,383)       (1,517)       18,4

     

Beginning Cash Balance 167,338    25,000       22,082       23,345       25,000      23,498      25,000      23,617      22,1

     

Net Cash Flows (2,962)        (2,918)        1,264         38,432       (1,502)       8,784        (1,383)       (1,517)       18,4

     

Disbursements (139,376)   ‐             ‐             (36,778)      ‐             (7,282)       ‐             ‐             (15,5

    

Ending Cash Balance 25,000      22,082      23,345      25,000       23,498      25,000      23,617      22,100      25,0

     

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 43 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Financial ModelNew Issuer Annual Projections

Operating outflows are subject to further adjus

Source: GDB. Financial projections are based on unaudited financial data provided by GDB

Note: New Issuer is set up at transaction closing (assumed 9/30/17); all prio1) 9 months

Government Development BankFiscal Plan ‐ Fund Flows ‐ New Issuer($000s) Fiscal1 Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

2018 2019 2020 2021 2022 2023 2024 2025 

Projected Inflows

Loan Asset Portfolio Interest Income:

Appropriation Loans ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Municipal Loans 38,427             174,291           168,273           168,725           172,790           175,066           178,642           176,416           

Public Sector Loans ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Total Loan Asset Portfolio Inflows 38,427             174,291           168,273           168,725           172,790           175,066           178,642           176,416           

Other Cash Receipts:

Interest Income on Cash Deposits 60                     27                     13                     13                     13                     13                     13                     13                     

REO Asset Sales 31,525             22,016             ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Total Other Inflows 31,584             22,043             13                     13                     13                     13                     13                     13                     

Total Cash Inflows 70,011             196,334          168,285          168,738          172,802          175,078          178,654          176,428          

Projected Outflows

New Issuer Servicing Fee                   3,237 ‐               6,291               6,111               5,926               5,736               5,538               5,340               

GDB Funding 13,385             1,245               ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Net Cash Flows             191,852 56,627           161,994           162,627           166,877           169,342           173,116           171,088           

Beginning Cash Balance 167,338           25,000             5,000               5,000               5,000               5,000               5,000               5,000               

Net Cash Flows 56,627             191,852           161,994           162,627           166,877           169,342           173,116           171,088           

Disbursements (198,965)         (211,852)         (161,994)         (162,627)         (166,877)         (169,342)         (173,116)         (171,088

        

Ending Cash Balance 25,000             5,000               5,000               5,000               5,000               5,000               5,000               5,000               

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 44 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Financial ModelPET Monthly Projections

Operating outflows are subject to further adjustments arising from a restructuring

Note: Trust is set up at transaction closing (assumed 9/30/17) all prior cash flo1) 9 months

Source: GDB. Financial projections are based on unaudited financial data provided by GDB

Government Development BankFiscal Plan ‐ Fund Flows ‐ PET($000s) Fiscal1

10/31/17 11/30/17 12/31/17 1/31/18 2/28/18 3/31/18 4/30/18 5/31/18 6/30/18 2018

Projected Inflows

Appropriation Loans ‐             ‐             ‐             ‐              ‐             ‐             ‐             ‐             ‐             ‐

Public Sector Loans 172            172            389            4,318          172            2,492        172            172            1,019        9,076

Total Loan Asset Portfolio Inflows 172            172            389            4,318          172            2,492        172            172            1,019        9,076

Other Cash Receipts:

Interest Income on Cash Deposits 5                 5                 5                 5                 5                5                5                5                5                47

Total Other Inflows 5                 5                 5                 5                 5                5                5                5                5                47

Total Cash Inflows 177            177            394            4,324         177            2,497        177            177            1,024        9,123

Projected Outflows

Operating Disbursements

Salaries & Wages 515            480            445            409             374            339            304            269            234            3,369

Fringe Benefits 311            290            269            247             226            205            184            163            141            2,036

Workforce Restructuring 662            662            662            ‐              ‐             ‐             ‐             ‐             ‐             1,985

Total Payroll ‐ Subsidiary ‐             ‐             ‐             ‐              ‐             ‐             ‐             ‐             ‐             ‐

Total Payroll Related 1,487         1,431         1,375         657             601            544            488            432            375            7,390

Rent/Utilities 61               58               55               52               49              46              43              40              37              441

Legal Services 716            716            716            399             399            399            399            399            399            4,541

Professional Services 422            422            422            388             388            388            388            388            388            3,597

Other Operating Outflows 473            473            473            247             247            247            247            440            240            3,085

Total Operating Outflows 3,159         3,100         3,041         1,743         1,684        1,624        1,565        1,699        1,440        19,054

Net Cash Flows before Transfer        (2,923) (2,982)        (2,647)        2,581          (1,507)       873            (1,388)       (1,522)       (416)          (9,932)Transfer from Creditor Trust         2,923 2,982         2,647         ‐              1,507        ‐             1,388        1,522        416            13,385Net Cash Flows             ‐ ‐             ‐             2,581          ‐             873            ‐             ‐             ‐             3,453Beginning Cash Balance 25,000       25,000       25,000       25,000       25,000      25,000      25,000      25,000      25,000      25,000

Net Cash Flows ‐             ‐             ‐             2,581          ‐             873            ‐             ‐             ‐             3,453Transaction Flows 50,000       ‐             ‐             ‐              ‐             ‐             ‐             ‐             ‐             50,000Disbursements (50,000)     ‐             ‐             (2,581)        ‐             (873)          ‐             ‐             ‐             (53,453)

Ending Cash Balance 25,000      25,000      25,000      25,000       25,000      25,000      25,000      25,000      25,000      25,000

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 45 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

Financial ModelPET Annual Projections

Note: New Issuer is set up at transaction closing (assumed 9/30/17); all prio1) 9 months

Operating outflows are subject to further adjustments arising from a restructuring

Source: GDB. Financial projections are based on unaudited financial data provided by GDB

Government Development BankFiscal Plan ‐ Fund Flows ‐ PET($000s) Fiscal1 Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 

2018 2019 2020 2021 2022 2023 2024 2025 2026 

Projected Inflows

Appropriation Loans ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Public Sector Loans 9,076               14,055             14,007             13,958             13,909             13,754             11,751             11,702             11,653             

Total Loan Asset Portfolio Inflows 9,076               14,055             14,007             13,958             13,909             13,754             11,751             11,702             11,653             

Other Cash Receipts:

Interest Income on Cash Deposits 47                     36                     25                     25                     25                     25                     24                     24                     24                     

Total Other Inflows 47                     36                     25                     25                     25                     25                     24                     24                     24                     

Total Cash Inflows 9,123               14,091             14,031             13,982             13,933             13,779             11,775             11,726             11,677             

Projected Outflows

Operating Disbursements

Salaries & Wages 3,369               1,484               707                  715                  724                  735                  746                  758                  770                  

Fringe Benefits 2,036               835                  303                  306                  310                  315                  320                  325                  330                  

Workforce Restructuring 1,985               ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Total Payroll ‐ Subsidiary ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Total Payroll Related 7,390               2,320               1,010               1,021               1,034               1,050               1,066               1,083               1,100               

Rent/Utilities 441                  89                     90                     91                     92                     93                     95                     96                     98                     

Legal Services 4,541               1,733               1,263               1,276               1,293               1,312               1,332               1,353               1,375               

Professional Services 3,597               1,567               1,010               1,021               1,034               1,050               1,066               1,083               1,100               

Other Operating Outflows 3,085               1,009               502                  505                  458                  462                  466                  470                  474                  

Total Operating Outflows 19,054             6,718               3,874               3,914               3,912               3,968               4,024               4,085               4,147               

Net Cash Flows before Transfer              7,373 (9,932)               10,157             10,068             10,022             9,811               7,751               7,641               7,530               

Transfer from Creditor Trust             1,245 13,385               ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Net Cash Flows               8,618 3,453               10,157             10,068             10,022             9,811               7,751               7,641               7,530               

Beginning Cash Balance 25,000             25,000             10,000             10,000             10,000             10,000             10,000             9,979               9,990               

Net Cash Flows 3,453               8,618               10,157             10,068             10,022             9,811               7,751               7,641               7,530               

Transaction Flows 50,000             ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   ‐                   

Disbursements (53,453)           (23,618)           (10,157)           (10,068)           (10,022)           (9,811)              (7,772)              (7,630)              (7,520)              

Ending Cash Balance 25,000             10,000             10,000             10,000             10,000             10,000             9,979               9,990               10,000             

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 46 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

V.iii. GDB Overview, History and 

Root Causes of its Crisis

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 47 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

GDB Overview, History and Root Causes of its Crisi• Originally created pursuant to Act 252 of 1942 for the purpose of attaining "the complete development o

economic resources of Puerto Rico”

– Act 272 of 1945 authorized it to act as fiscal agent and financial advisor of the central governme– Act 17 of 1948 created GDB’s Charter and established its duties and powers

• GDB’s Mission: “To safeguard the fiscal stability of Puerto Rico and promote its competitiveness in orde

economy into one of the most developed economies in the world, hence, fostering the social and econoour people. We serve as a bank, fiscal agent and financial advisor for the Government of Puerto Rico, andinstrumentalities”

• During its prime, GDB was considered one of the island’s most important and prestigious institutions wit

$14bn, net assets of almost $2bn and over 280 employees as of June 30, 2010(1)

• Despite operating soundly for much of its history, supporting economic development as well as troubled

failed political policies starting in the early 2000s and recurrent chronic public deficits had an adverse im

financial position

• As the Government, its instrumentalities, and public corporations required increased liquidity and financ

GDB, their financial health became interrelated

Overview

(1) Basic Financial Statements and Required Supplementary Information for FY2010

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Exhibit N to Declaration Page 48 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• In working to achieve its goals, GDB historically facilitated capital markets access to the Government, its 

municipalities and public corporations until 2014

• During the summer of 2014, Puerto Rico’s public sector lost access to the capital markets mainly due to:

– A confrontational governmental attitude towards the investment community– Lack of transparency interpreted by the investment community as lack of good faith

– Lack of a coherent plan to facilitate economic development, reign in public spending, and safeguar

credit ratings and capital market access

Overview (continued)

Loss of access to readily available, cost‐effective short and long‐term credit triggered the collapse of the Islan

system and is the primary cause for widespread defaults across Puerto Rico’s debt profile and the current liq

crisis affecting the GDB

GDB Overview, History and Root Causes of its Crisi

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Exhibit N to Declaration Page 49 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• Available data shows that fiscal irresponsibility and ineffective leadership (public and private) was the roo

Rico’s economic and debt crisis

• The fiscal crisis began in earnest as a result of excessive spending, starkly evident, for example, with unch

government payroll between fiscal years 2001 and 2009 and persistent central government deficits

Historical Context

Growth of Government Payroll Costs (1)

($ in billions) 

(1)  Source: Government Financial Information and Operating Data Reports (various years) and Government Comprehensive Annual Financial Reports

$3.38 

$3.75  $3.86 

$4.25 

$4.39 

$5.10 

$5.26  $5.19  $5.32 

$5.50 

$4.61 

$3.63  $3.67  $3.63  $3.

 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201

GDB Overview, History and Root Causes of its Crisi

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Exhibit N to Declaration Page 50 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

• Historical facts point to fiscal mismanagement and irresponsible behavior since 2001, except between 20

credit ratings stabilized and improved

Historical Context (continued)

(1)  Source: Standard & Poor’s

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 2

BBB‐

Stable

A

A‐

Stable

BBB

Negative

Outlook

BBB

Credit

Watch

BBB

Negative

Outlook BBB‐

Positive

Outlook

BBB

Stable

A‐

Negative

Outlook

A

Negative

Outlook

A‐

Negative

Outlook

BBB‐

Stable

BBB‐

Stable

BBB‐

Negative

Outlook BB+

Negative

Outlook BB

Negative

Outlook 

N

O

Puerto Rico’s Credit Rating – 2000 to 2016

S&P Rating on General Obligation Bonds (1)

GDB Overview, History and Root Causes of its Crisi

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Exhibit N to Declaration Page 51 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

(1) Source: GDB Basic Financial Statements and Required Supplementary Information on Fiscal Years 2001 – 2014

$1,310  $1,375  $1,464 

$1,601 

$1,219  $1,301  $1,381  $1,457 

$1,639  $1,704  $1,795 

$2,070 

$2,174 

$(759)

 $(800) $(300)

 $200 $700

 $1,200 $1,700 $2,200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Government Development Bank for Puerto Rico ‐ Net Assets (1)

($ in millions)

Out of control public spending including fiscally unsound legislation in FY 2005 that forced GDB special dividend and a $500mm appropriation loan to fund the Special Communities Perpetua24% reduction in GDB’s net assets

Historical Context – Timeline of Relevant Events

24% Reduction in 

Net Assets

Assault 

on GDB’s 

Capital

GDB Overview, History and Root Causes of its Crisi

2004:

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Exhibit N to Declaration Page 52 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

 $7,500 $7,750 $8,000 $8,250 $8,500 $8,750 $9,000 $9,250 $9,500 $9,750

 $10,000

2005 2006 2007 2008 2009 2010 2011 201

GF Revenue Projection GF

(1) Base case projection for each fiscal year as projected prior to or at the beginning of each fiscal year by the Puerto Rico Planning Board(2) Source: Estimated General Fund Net Revenues for Fiscal Years 2001 to 2016 as presented by the Secretary of the Treasury during each fiscal year's budget approval pro

The public sector ignored the weakening economy, population loss, and ensuing declining goverevenue base and instead increased public spending that resulted in a recurrent practice of defifinancings and a crowding out effect of the private sector starting in FY2001

2006: Weakening economic prospects resulting from a lack of coherent economic initiatives, governm

inefficiencies and a crowding out effect on private sector investment due to unchecked public striggered an accelerated population decline that fueled economic contractionA Government shutdown, overestimation of economic growth prospects and government revenjustified aggressive government spending, resulted in massive deficits that were covered with oand GDB loans

Historical Context – Timeline of Relevant Events

(4.0%)(3.0%)(2.0%)(1.0%)

0.0%1.0%2.0%3.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Real GNP Projection Real GNP Actual

Economic Projections vs Actual Since 2001 – 2016 (1)

(% Change)

Revenue Projections vs Actual Sin

($ in millions)

Government 

Shutdown & 

Economic 

Recession

GDB Overview, History and Root Causes of its Crisi

Adequate revenu

forecasting period

Looking the 

Other Way

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Exhibit N to Declaration Page 53 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

2007/2008:

Credit deterioration due to persistent structural imbalances and an accelerated economadditional pressure on the public sector, increasing reliance on GDB’s balance sheet for to continue funding public improvements and operational expenses

The global financial crisis and the temporary collapse of asset‐backed commercial paper

(CPP) forced GDB to seek alternative sources of funding

2008/2009:

GDB found a funding alternative in its Medium Term Senior Unsecured Notes program (

a fixed and cost‐effective source of funding based on readily available market access

Historical Context – Timeline of Relevant Events

Credit 

Deterioration

Global Financial 

Crisis

Medium Term 

Notes Program

GDB Overview, History and Root Causes of its Crisi

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Exhibit N to Declaration Page 54 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

2011/2012: Given strong credit ratings and a proven track record in the capital markets, GDB was ab

maturity profile of its MTN program to allow for a longer maturity schedule

Concurrently, GDB diversified the composition of its investor base while reducing the ex

local retail and institutional investors to Puerto Rico credits:

2012: “The Government of Puerto Rico’s general obligation bonds reflects the significant prog

outgoing administration in implementing widespread reforms despite economic underp

Maintenance of the rating will require policy decisions that continue this progress and a

balance and a slowing in the growth of long‐term liabilities...” (1)

2013:

Former Governor García Padilla’s administration adopted a hostile stance toward the inv

community by publicly disregarding the input and recommendations of rating agencies, 

confrontational relationship with the local and national investment community

2014:

The García Padilla administration enacted a local bankruptcy regime (later invalidated bydamaging Puerto Rico’s historic credit reputation and track record

Historical Context – Timeline of Relevant Events

FY 2010(2) FY 2012(2)

Noteholders Noteholders

100% Local 69% Local; 31% States

Investor Base 

Diversification

Fitch Ratings 

Disclosure

Governor’s 

Defiance

Credit 

Reputation 

Damaged

(1) Source: Fitch Ratings Disclosure – December 18, 2012(2) GDB audited basic financial statements

GDB Overview, History and Root Causes of its Crisi

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Exhibit N to Declaration Page 55 of 58
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

2015:

As the investment community lost confidence and trust in the Garcia Padilla administratshifted Puerto Rico’s longstanding “willingness to pay” stance to an “unwillingness to paImmediately following the Governor’s public statements, a significant portion of GDB’

portfolio defaulted creating a domino effect within GDB’s asset and liability structure,

consider restrictive disbursement measures on approved loans and deposits, eventuaown debt obligations (MTNs), and threatening the provision of essential services by se

2016: 

Loss of cash flow from a significant portion of its public sector loan portfolio resulting fr

government’s “unwillingness” to honor its moral obligations and other loans whose souwas “clawed back” rendered the GDB practically inoperative with a rapidly decreasing liq

inability to refinance maturing MTN obligations

Historical Context – Timeline of Relevant Events

Unwillingness 

to 

Pay

GDB Default

GDB Overview, History and Root Causes of its Crisi

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 D

Exhibit N to Declaration Page 56 of 58
FINANCIAL OVERSIGHT AND MANAGEMENT BOARD

FOR PUERTO RICO

UNANIMOUS WRITTEN CONSENT APPROVING

CERTIFIED FISCAL PLAN, AS REVISED

WHEREAS, on June 30, 2016, the federal Puerto Rico Oversight, Management, and

Economic Stability Act (“PROMESA”) was enacted; and

WHEREAS section 101 of PROMESA created the Financial Oversight and Management

Board for Puerto Rico (the “Board”); and

WHEREAS section 201 of PROMESA establishes a multi-step procedure for the

development, review, and approval of fiscal plans for covered territorial instrumentalities,

requiring that (i) the proposed fiscal plan be submitted to the Board; (ii) the Board review the

proposed fiscal plan and determine either that it satisfies PROMESA’s requirements or that it

does not, in which case the Board must issue a notice of violation and recommended revisions,

giving an opportunity to correct the violations; (iii) a revised proposed plan be then submitted to

the Board; and (iv) if there is failure to submit timely a proposed fiscal plan that the Board

determines in its sole discretion satisfies PROMESA’s requirements, the Board shall develop and

submit to the Governor and the Legislature its own compliant fiscal plan; and

WHEREAS, on March 13, 2017, the Board announced that it had received a proposed

fiscal plan for the Government Development Bank for Puerto Rico (“GDB”); and

WHEREAS, after substantial deliberations, and after having received public comment on

the proposed fiscal plan, the Board certified the proposed fiscal plan at the Board’s April 28,

2017 meeting (the “Fiscal Plan”); and

WHEREAS, following certification of the Fiscal Plan, AAFAF, GDB and certain

supporting creditors negotiated the terms of a Restructuring Support Agreement, dated May 15,

2017 (the “RSA”) in respect of GDB’s obligations towards its financial creditors; and

WHEREAS the Board is in receipt of a letter from the Puerto Rico Fiscal Agency and

Financial Advisory Authority (“AAFAF”) dated June 30, 2017, a copy of which is attached

hereto as Exhibit A (the “Letter”); and

WHEREAS, AAFAF, as the Governor’s representative, and GDB believe that, although

the RSA does not change the underlying strategy of the Fiscal Plan resulting in an orderly wind

down of GDB’s operations, it is necessary and appropriate that the Fiscal Plan be amended to

reflect the structure agreed in the RSA; and

WHEREAS, AAFAF, as the Governor’s representative, and GDB have proposed certain

revisions to the certified Fiscal Plan, which revisions are set forth in Exhibit C to the Letter

attached hereto; and

Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 Desc:

Exhibit N to Declaration Page 57 of 58
Case:17-03283-LTS Doc#:3961-15 Filed:09/21/18 Entered:09/21/18 21:28:34 Desc:

Exhibit N to Declaration Page 58 of 58