MeetingwithPuertoRicoFiscalAgencyandFinancialAdvisoryAuthority

January18,2017AAFAF,SanJuan,PR

AstraightforwarddiscussiononallfinancialandlegalaspectsoftheGDB’sVoluntaryRestructuringAgreement(RSA)

RestructuringTransactionJune7,2017

LegalDisclaimer(1of2)

§Information presented in this document has been compiled from publicly availabledata that is believed to be factual and up to date, but we do not guarantee itsaccuracy and it should not be regarded as a complete analysis of the subjectsdiscussed. All expressions of opinion reflect the judgment of authors as of the datethereof and are subject to change. Any statements and assumptions contained in thisdocument, whether forward-looking or historical, are not guarantees of futureperformance and involve certain risks, uncertainties, estimates and other assumptionsmade in this document.

§Nothing in this document should be considered as an express or implied commitmentto do or take, or to refrain from taking, any action by Bonistas del Patio, itsrepresentatives or advisors, or an admission of any fact or future event. Nothing in thisdocument shall be considered a solicitation, recommendation or advice to any personto participate, pursue or support a particular course of action or transaction, topurchase or sell any security, or to make any investment decision.

§By accepting this document, the recipient shall be deemed to have acknowledgedand agreed to the terms of these limitations.

§This document may contain capitalized terms that are not defined herein, or maycontain terms that are discussed in other documents. You should make no assumptionsabout the meaning of capitalized terms that are not defined, and you should consultwith advisors on the meanings of the terms should clarification be required.

LegalDisclaimer(2of2)

Today’s session is intended to inform you about the Restructuring Support Agreemententered into by the GDB, AAFAF and a number of GDB’s creditors. We have invitedrepresentatives of the GDB and the creditors that signed the Restructuring SupportAgreement here to explain the agreement’s terms. This session is intended to be forinformational purposes only. Any offer to participate in any eventual restructuring willbe made only by the GDB in a solicitation statement or other communication madeby them in the future. Today’s presentations are not intended to be and do notconstitute an offer of any securities. Any offer of securities will be made only by theGDB, independently of today’s session.

La reunión de hoy es para informarles sobre el Restructuirng Support Agreementotorgado entre el BGF, AAFAF y un grupo de acreedores del BGF. Hemos invitadorepresentantes del BGF y los acreedores que firmaron el Restructuring SupportAgreement para explicar los términos del acuerdo. Esta reunion es de naturalezainformativa solamente. Cualquier oferta para participar en una eventualreestructuración se hará a través del BGF en un documento de solicitación u otracomunicación. Las presentaciones de hoy no son ni deben entenderse que son unaoferta para comprar o vender ningún valor. Cualquier oferta de valores la hará elBGF, independientemente de esta reunión.

AstraightforwarddiscussiononallfinancialandlegalaspectsoftheGDB’sVoluntaryRestructuringAgreement(RSA)

RestructuringTransactionJune7,2017

BondExchangeTermsJorgeIrizarry

ExecutiveDirector

Background

• On-island and off-island creditors have worked together to develop a transaction framework (“GDB Restructuring Transaction”) through a Qualifying Modification under Title VI of PROMESA

• The transaction also addresses government depositors, some of which are included in the first lien structure and others, the “Designated Depositors”, are covered with separate collateral

• The GDB Restructuring Transaction is consistent with the GDB Fiscal Plan, which was approved by the Governor and certified by the Oversight Board on April 28, 2017

• Close to a majority of GDB bondholders have expressed support for the GDB Restructuring Transaction

ProposedBondExchange

Holders of Participating Bond Claims may elect one of three tranches of New Bonds:Tranche A• Exchange Rate: 55% of Par + Accrued Interest• Collateral: First lien on New Bond Collateral• Coupon Rate: 7.5% annually (cash pay with PIK election if cash

flows are insufficient) • Amortization: AnyAvailableCashshallreduce,onaproratabasis

theprincipalbalanceoftheTrancheABondsandtheTrancheBBonds.Anyexcess cashflowaftercouponpaymentstoalltranchestobeusedforamortizationpro-ratawithTrancheB

• MaturityDate:July1,2040.

ProposedBondExchange

Tranche B• Exchange Rate: 60% of Par + Accrued Interest• Collateral: First lien on New Bond Collateral• Coupon Rate: 5.5% annually (cash pay with PIK election if cash

flows are insufficient) • Amortization: AnyAvailableCashshallreduce,onaproratabasis

theprincipalbalanceoftheTrancheABondsandtheTrancheBBonds.Anyexcess cashflowaftercouponpaymentstoalltranchestobeusedforamortizationpro-ratawithTrancheB

• MaturityDate:July1,2040.

ProposedBondExchange

Tranche C• Exchange Rate: 75% of Par + Accrued Interest • Collateral: Second lien on New Bond Collateral• Coupon Rate: 3.5% annually (cash pay with PIK election if

cash flows are insufficient)• Amortization: ExcessAvailableCashshallbeusedtoamortizetheunpaidprincipaloftheTrancheCBonds,providedthatsuchprincipalamortizationshalloccuronoraftertheinterestpaymentdateuponwhichprincipaloftheTrancheABondsandTrancheBBondshasbeenpaidinfull.

• MaturityDate:July1,2040.

ProposedBondExchangeSummary

TrancheA TrancheB TrancheC

LienPriority 1stLien 1stLien 2ndLien

AmortPriority FirstOut FirstOut LastOut

IllustrativeClaimsExchanged $2,119 $2,119 $500

Exchange%onPar+Accrued 55.00% 60.00% 75.00%

FaceAmtIssued($mm) $1,165 $1,271 $375

CouponRate(%) 7.50% 5.50% 3.50%

IllustrativeFullAmortYear 2034 2034 2041

WeightedAvg.Life(yrs) 8.3 8.3 18.4

ProposedBondExchangeSummary

TrancheA TrancheB TrancheC

LienPriority 1stLien 1stLien 2ndLien

AmortPriority FirstOut FirstOut LastOut

IllustrativeClaimsExchanged $2,119 $2,119 $500

Exchange%onPar+Accrued 55.00% 60.00% 75.00%

FaceAmtIssued($mm) $1,165 $1,271 $375

CouponRate(%) 7.50% 5.50% 3.50%

IllustrativeFullAmortYear 2034 2034 2041

WeightedAvg.Life(yrs) 8.3 8.3 18.4

NewBondsandCollateral

CarlosRodriguezRioja

NewBondsandCollateral- UsefulTerms

OriginalClaims

$4,780million

AmounttheGDBowedtocertaincreditorbeforerestructuring

NewBonds

~$2,600-$3,100

Amountthesettlementtrustwillowecreditorsaftertherestructuring

NewBondCollateral

$5,332million

Facevalueofassetsthatwillbe

segregatedintrusttopayofftheNew

Bonds

OriginalBondClaims• Holders of $4.78 billion of claims are eligible to participate in the Title VI

restructuring

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

OriginalClaims

$3,971MillionGDBNotes+Accruedand

interest

$465millionMunicipalDeposits&Nongovernmentalagencies

$344millionContingentClaims(letters

ofcredit)

$885millionNOTPARTOFTHEORIGINALBONDCLAIMS

PublicEntityDeposits&FederalFundDeposits$4,780

NewBonds• Original Claims will be exchanged into New Bonds. Depending on the

proportion of Trance A, B, or C the effective par will be between ~55-75% of original claim*

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

OriginalClaims NewBonds*

TrancheA&BBondsareSeniorandhavefaceamount

of55%-60%

TrancheCBondsareSubordinatedandhaveaface

amountof75%

*Assumes that 1/3 of holders chose each class. Actual selection may be materially different

Facevaluereductionof25%-45%$4,780

~$2,600-$3,100

NewBondCollateral• New Bonds will be secured by a segregated pool of assets• Appropriation-backed loans without security will be excluded from collateral

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

OriginalClaims NewBonds* NewBondCollateral

*Assumes that 1/3 of holders chose each class. Actual selection may be materially different

GDBProperties$85million

Cash(TDB)

MunicipalLoansandCOFIMadvances~$1,800

million

CertainPublicEntityObligations$3,446

million

~$5,300

$4,780

~$2,600-$3,100

Over70%faceovercollateralizationonA,B&CBondsbutmaterialuncertaintyinnewbond

collateral

SeriesA&BhavelessexposuretoPublicEntity

Obligations

ProcessTimeline&HurdlesRafaelRojoChairman

TitleIVVs.

TitleIIIAnadelToro,Esq.Pico&Blanco

TitleIIIvs.TitleVIProcessunderPROMESA

Title III

• Court restructuring process that is similar to Chapter 9 of the Bankruptcy Code

• Automatic stay

• Financial and nonfinancial obligations

• All legal issues are resolved in one legal proceeding

• Cram-down

TitleIIIvs.TitleVIProcessunderPROMESA

Title VI

• Voluntary negotiations, a pre-requisite for Title III eligibility

• Only financial obligations

• Good faith agreements among the Government and creditors

• Voting requirements ensure that all bondholders will receive the information to make a consensual decision

• Diversity of transaction proposals

• May obtain more value

AmortizationofNewBondCollateralPaulHopgoodAtlasFinancial

BondAmortization

• Any excess cash flow after coupon payments to all tranches to be used for pro-rata amortization between Tranche A and B

• Semi-annual pass through cash flow mechanism

• Tranche C receives principal payments only when Tranche A and B are paid in full

• Majority of principal and interest payments derived from municipal loans with average life of approximately 9 years and stated final in 2040

BondAmortization

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,0007/1/20

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ModelingandValuationBradMeyer

Ducera Partners

LegalDisclaimer

The leadership of the Bonistas del Patio invited me here today to explain the financialterms of the Restructuring Support Agreement, which I will endeavor to do. I am thefinancial advisor to the Ad Hoc Group of GDB Bondholders, which is comprised ofcertain institutional GDB bondholders that entered into the Restructuring SupportAgreement. My presentation will describe certain of the financial terms of thatagreement but I will not offer any view as to whether the agreement is a good onefor any investor. Should the GDB seek your support for this restructuring, you will needto consult your own financial advisers at that time to determine whether or not itwould be in your interest to support the restructuring. I am here only to describe theRestructuring Support Agreement, not evaluate its merits or provide any insight intothe pros and cons of the agreement for those of you here today.

Los directores y oficiales de Bonistas del Patio me han invitado hoy a esta reuniónpara explicar los términos financieros del Restructuring Support Agreement; y asi loharé. Soy el asesor financiero de un grupo “ad hoc” de bonistas del BGF, compuestopor varios bonistas institucionales que firmaron el Restructuring Suport Agreement. Mipresentación describirá algunos delos términos financieros de dicho acuerdo perono ofreceré mi opinión sobre si el acuerdo es beneficioso para un inversionista. Si elBGF busca su apoyo para esta reestructuración, usted va a tener que consultar supropio asesor financiero en ese momento para determinar si está o no en su mejorinterés apoyar la reestructuración. Estoy aquí solo para describir el RestructuringSupport Agreement y no para evaluar sus meritos o proveer una perspectiva sobrelos aspectos positivos o negativos del acuerdo para ustedes.

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