In May 2017, the Financial Oversight and Management Board for Puerto Rico (the

“Oversight Board”) filed petitions for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act (“PROMESA”) for both the Commonwealth of
Puerto Rico (the “Commonwealth”) and the Puerto Rico Sales Tax Financing Corporation
(“COFINA”).

In order to facilitate the consensual resolution of issues arising in the Title III cases, the
United States District Court for the District of Puerto Rico (the “Title III Court”),
overseeing the Title III cases, entered an order appointing a mediation team (the
“Mediation Team”). See In re The Financial Oversight and Management Board for Puerto
Rico, as representative of the Commonwealth of Puerto Rico, et al., Case No. 17-BK-3283
(LTS) (D.P.R. 2017) [ECF No. 430] (the “Mediation Order”). On August 10, 2017, the
Title III Court entered the Stipulation and Order Approving Procedure to Resolve
Commonwealth-COFINA Dispute [ECF No. 996] (the “Stipulation”). The Stipulation
provides a procedure for litigating and/or negotiating the “Commonwealth-COFINA
Dispute,” described as “whether, after considering all procedural and substantive defenses
and counterclaims, including constitutional issues, the sales and use taxes purportedly
pledged by COFINA to secure debt (the “Pledged Sales Taxes”) are property of the
Commonwealth or COFINA under applicable law.” Id.

Pursuant to the Mediation Order and the Stipulation, parties have engaged in mediation of
the Commonwealth-COFINA Dispute. Following an extensive arm’s length negotiation,
certain stakeholders including the following parties have reached a proposed settlement
outline (the “Joint Settlement Outline”) of the Commonwealth-COFINA Dispute: the Ad
Hoc Group of Puerto Rico General Obligation Bondholders, the COFINA Senior
Bondholders Coalition, Bonistas del Patio Inc., and certain monoline insurers (collectively,
the “Supporting Parties”).

The Supporting Parties represent stakeholders from a diverse group of institutions with
varying interests, including representatives of on-island bondholders and insurers of bonds
issued by the Commonwealth and its instrumentalities (including COFINA). In the
aggregate, the Supporting Parties hold or insure approximately $5.62 billion in principal
face amount of bonds issued or guaranteed by the Commonwealth, $4.26 billion in
principal face amount of senior bonds issued by COFINA, and $1.30 billion in principal
face amount of subordinate bonds issued by COFINA.

The Joint Settlement Outline is attached hereto as Exhibit A. The Supporting Parties
believe that this Joint Settlement Outline represents a major step towards a consensual
resolution of one of the most contentious disputes in the Title III cases. More specifically,
resolving the Commonwealth-COFINA Dispute at this stage paves the way for the
Commonwealth to exit years of disruptive defaults and costly litigation. Among other
things, if a settlement could be achieved consistent with the Joint Settlement Outline, it
would serve as a comprehensive solution for all COFINA bonds, reduce the
Commonwealth’s debt burden by approximately $10 billion, facilitate a more efficient plan
of adjustment confirmation process, and pave the way for capital market access.
Pursuant to the Stipulation, in order to settle the Commonwealth-COFINA Dispute, the
two agents appointed by the Oversight Board would need to support the Joint Settlement
Outline: (i) the official committee of unsecured creditors appointed in the
Commonwealth’s Title III case (the “Commonwealth Agent”) and (ii) Bettina Whyte (the
“COFINA Agent”). While the COFINA Agent supported the allocation of the Pledged
Sales Tax between the Commonwealth and COFINA, the Commonwealth Agent did not
support any portion of the Joint Settlement Outline.

The Joint Settlement Outline negotiations were preceded by negotiations involving

alternative structures to resolve the Commonwealth-COFINA Dispute. Once those
negotiations failed, certain parties began the negotiations which resulted in the Joint
Settlement Outline.

After the Commonwealth Agent indicated that it would not proceed with the Joint
Settlement Outline, the Supporting Parties approached the Oversight Board and AAFAF.
Through the Mediation Team, the Supporting Parties shared the materials attached hereto
as Exhibit B with the Oversight Board and AAFAF. The Supporting Parties look forward
to actively engaging with the Oversight Board and AAFAF with the goal of implementing
a settlement consistent with the Joint Settlement Outline.
Exhibit A
Mediation Privilege – Non Binding Outline
Subject to FRE 408 and Local Law Equivalents

Commonwealth-COFINA Joint Settlement Outline

 The following outline (the “Joint Settlement Outline”) supported by certain holders
or insurers of GO Bonds1 and certain holders or insurers of COFINA Bonds2 (the
“Supporting Parties”) (listed on Exhibit 1 hereto) would settle the Commonwealth-
COFINA Dispute based on the creation of a trust into which all COFINA Bonds
would be contributed and which would make an exchange offer for all GO Bonds
and allowed general unsecured claims (“GUCs”).3 The trust shall be an
independent entity employing a lock box mechanism and, to the fullest extent
permitted under applicable law, structured as a bankruptcy remote entity, on terms
acceptable to the Supporting Parties.
 Pledged 5.5% sales and use tax (“SUT”) through the effective date of COFINA
plan of adjustment plus 40 years (or such later date as of which the new trust
certificates are paid in full) would be owned by the trust.
o For purposes of the settlement, the COFINA structure would be deemed
accelerated and the trust is stipulated to be the owner of the full 5.5% SUT.
o The COFINA structure and newly created trust would not be subject to
future challenge by any party.
o The 5.5% SUT and ownership thereof would be validated by federal court
order approving the COFINA plan of adjustment and would not be subject
to repeal, limit, restraint, or other interference unless otherwise mutually
agreed upon in accordance with the terms of the documentation pursuant to
which the settlement securities are issued. For the avoidance of doubt, the
validation provided for under this paragraph would provide that the 5.5%
SUT would not be “Available Resources” or otherwise be subject to
recharacterization or clawback of any kind.
o The 5.5% SUT would not be subject to priming or dilution by any other lien
or loan.
 Value to be distributed (“Distributable Value”) includes – newly issued trust
certificates, residual certificates, and all cash in The Bank of New York Mellon

1
“GO Bonds” (and holders or insurers thereof, the “GO Bondholders”) consist of debt set forth in the
Commonwealth Fiscal Plan, namely GO, PBA, GDB Guaranteed and PRIFA BANs Guaranteed, but will not
include QZAB (Zone Academy Series T) and QSCB (School Construction Series R). For the avoidance of
doubt, Commonwealth affiliates will not participate in the exchange offer.
2
“COFINA Bonds” (and holders or insurers thereof, the “COFINA Bondholders”) consist of senior and
subordinate bonds issued by the Puerto Rico Sales Tax Financing Corporation (“COFINA”). In addition,
notwithstanding anything to the contrary herein, the Bonistas del Patio, Inc. (the “Bonistas”) will be a
Supporting Party (despite the fact that as an organization it does not itself own any bonds), and in such
capacity the Bonistas would publicly support this transaction and encourage the support and votes for this
transaction from its constituents that are holders of GO Bonds and/or COFINA Bonds.
3
Does not include pension claims, bond claims, instrumentality claims or securities law claims.
 2

account as of the effective date of the COFINA plan of adjustment (after payment
of professional fees as provided herein). See Exhibit 2 for model output and
additional terms. The percentages of the cash flows listed under the column
heading “% of the 5.5% SUT” and “% of BNYM Cash” allocable to each class
would be as set forth in Exhibit 2.4
 Implementation of the settlement would be that (i) COFINA Bondholders receive
52.5000% of Distributable Value, and (ii) the participating GO Bondholders
receive 46.2330%, and GUCs receive 1.2670%5, for an aggregate Commonwealth-
side share of 47.5000% (the “Allocation Percentages”).
 Remainder Claim: the trust would distribute one series of remainder claim
certificates (which for the avoidance of doubt are different from the residual
interests in the trust referenced to below) to participating GO Bondholders in an
amount equivalent to the matching remainder amount of the GO Bond claims in the
Commonwealth Title III (as calculated by taking the par + accrued prepetition and
postpetition interest claim amount of participating GO Bonds less the
corresponding amount of Distributable Value distributed to those claimants) to be
held by the trust. The remainder claim certificates would be proportionately
allocated to those participating GO Bondholders.
o Remainder claim certificates would receive any recoveries received
on account of the remainder amount of the GO Bonds tendered into
the trust, including any recoveries from the Commonwealth and
relevant instrumentalities (as applicable) on account of the
remainder amount of such bonds. Recoveries from either the
Commonwealth or relevant instrumentalities would be pooled and
support all remainder claim certificates.
 The trust would issue certificates in the form of cash pay debt with a 6% tax-exempt
coupon, capital appreciation bonds accreting at a 6.5% tax-exempt interest rate, and
the residual tranche would be valued at a 15% discount rate. Unless otherwise
agreed by a holder, the cash pay bonds, capital appreciation bonds, residual tranche,
and cash at The Bank of New York Mellon attributable and allocable to such class
as set forth on Exhibit 2 would be issued within each creditor class in pro-rata strips
to holders of the new settlement securities.
 The definitive documentation (including, without limitation, a Restructuring
Support Agreement (“RSA”) with lock-up provisions) must be mutually agreed
upon, and this Joint Settlement Outline does not impose any obligations on any
party to take or refrain from taking any action.
 Any incremental Distributable Value due to the tender participation percentage of
GO Bonds being below 100% accruing to the sole benefit of the participating GO
Bondholders, provided that non-tendered bonds would not have any recourse
against COFINA or the trust.
4
For the avoidance of doubt, nothing herein contemplates releasing any claims that have been or may be
asserted against The Bank of New York Mellon, as Trustee for the COFINA Bonds; provided, however, that
no action against The Bank of New York Mellon shall affect or otherwise modify the Distributable Value
(including the cash portion thereof) allocated to the Supporting Parties under this settlement.
5
Subject to a cap of $500mm of allowed GUC claims being tendered.
 3

 Respective claims pools to be calculated as par + pre-petition and post-petition

accrued interest with no discount for OID for cash pay bonds and the accreted value
of capital appreciation bonds, as of the effective date of the COFINA plan of
adjustment (assumed July 1, 2018).
 It will be a condition to any settlement based on this Joint Settlement Outline that
the settlement securities must be issued, and all other terms of any such settlement
must be satisfied, by an outside date of December 1, 2018 (the “Outside Date”)
unless the Supporting Parties agree to waive this condition.
 Professional fees, including reasonable expenses, incurred by each of the
Supporting Parties currently listed on Exhibit 1 or those parties that become
Supporting Parties by no later than May 13, 2018 pursuant to existing engagements
in respect of issues relating to Commonwealth and COFINA bonds would be paid
(subject to an agreed upon schedule) by the trust in cash from the cash in The Bank
of New York Mellon account, upon the effective date of the COFINA plan of
adjustment.
 Minimum tender participation by GO Bondholders would be [75-90]%;6provided
however, this condition may be waived by the Supporting Parties.
 The settlement would be implemented through a plan of adjustment for COFINA
and a 9019 motion in the Commonwealth Title III proceeding and would not be
conditioned or tied to the confirmation or effectiveness of a plan of adjustment for
the Commonwealth.
 Commutation options, if any, would be addressed in the COFINA plan of
adjustment in a manner satisfactory to the Supporting Parties that are monoline
insurers, each with respect solely to its insured bonds. To the extent the COFINA
plan of adjustment includes a payment commutation option, each insured holder
may elect to accept or decline such commutation option.
 Title III court would retain jurisdiction over implementation of settlement and
related issues.7
 Nothing contained in this Joint Settlement Outline addresses the Commonwealth
Title III proceedings, and the rights, remedies and objections of all parties hereto in
respect of claims asserted against the Commonwealth, whether in connection with
such Title III proceedings, any settlement or otherwise are expressly preserved;
provided, however, that, except as otherwise set forth herein, and subject to the
effectiveness of a mutually agreed upon RSA, no Supporting Party may, in any

6
Subject to receipt of feedback from the mediation team and agreement of the Supporting Parties.
7
Contingent upon a final non-appealable order approving the settlement, those claims or portions of claims
pending in the action entitled Lex Claims, LLC v. Commonwealth of Puerto Rico, No. 16-cv-02374 FAB
(D.P.R.) that the Supporting Parties mutually agree are premised on challenges to COFINA’s
constitutionality or COFINA’s entitlement to proceeds of the SUT will be dismissed with prejudice. In
addition, certain Supporting Parties have stated that dismissal of the Appointments Clause litigation should
be included as a term of this Joint Settlement Outline. The Ad Hoc Group of Puerto Rico General Obligation
Bondholders, however, does not support dismissal of the Appointments Clause litigation in connection with
this Joint Settlement Outline.
 4

capacity, object to any settlement of the Commonwealth-COFINA Dispute based

upon this Joint Settlement Outline, including any of the terms expressed herein.
For the avoidance of doubt, this Joint Settlement Outline does not create a binding
or enforceable obligation on any Supporting Party and no Supporting Party shall be
liable to any other party for damages or specific performance with respect to failure
to implement a settlement on the terms described herein or the failure to execute an
RSA or any other definitive documentation. All other rights of any Supporting
Party in the Commonwealth Title III proceedings or any other Title III proceedings
are otherwise preserved, including with respect to any matter not subject to this
Joint Settlement Outline.
 Exhibit 1
Supporting Parties8

Supporting GO Parties

 Aurelius Capital Management, LP, on behalf of its managed funds and entities
 Autonomy Capital (Jersey) LP, on behalf of its managed funds and entities
 FCO Advisors LP, on behalf of its managed funds and entities
 Monarch Alternative Capital LP, on behalf of its managed funds and entities
 Assured Guaranty Corp.,
 Assured Guaranty Municipal Corp.
 National Public Finance Guarantee Corp., as an insurer and/or holder of GO
Bonds
 Ambac Assurance Corporation, as an insurer and/or holder of GO Bonds
 Syncora Guarantee Inc.
 Candlewood Investment Group, LP
 Fir Tree Partners
 Inglesea Capital LLC

Supporting COFINA Parties

 Bonistas del Patio, Inc.

 Aristeia Capital, L.L.C., on behalf of its participating clients
 Canyon Capital Advisors LLC, on behalf of its participating clients9
 GoldenTree Asset Management LP, on behalf of its participating clients10
 Old Bellows Partners LP, on behalf of its participating clients
 Scoggin Capital LLC, on behalf of its participating clients
 Tilden Park Capital Management LP, on behalf of its participating clients
 Whitebox Advisors LLC, on behalf of its participating clients
8
Certain Supporting Parties do not currently support the last sentence of footnote 1 of this Joint Settlement
Outline relating to the participation of Commonwealth affiliates in the exchange offer.

9
Canyon Capital Advisors LLC (on behalf of its participating clients) (“Canyon”) is a Supporting Party of
the settlement of the Commonwealth-COFINA Dispute on the terms and conditions described herein solely
in its capacity as a beneficial holder of COFINA Bonds. Canyon does not waive any of its rights, claims,
and defenses in its capacity as a beneficial holder of QZAB and QSCB, all of which rights, claims, and
defenses, including with respect to the treatment of the QZAB and QSCB proposed herein, are expressly
preserved.
10
GoldenTree Asset Management LP (on behalf of its participating clients) is a Supporting Party of the Joint
Settlement Outline except with respect to the allocation of the Distributable Value between and among
COFINA Bondholders set forth on Exhibit 2, and does not waive any of its rights, claims and defenses with
respect to such allocation of Distributable Value. Other Supporting Parties are supportive of the Joint
Settlement Outline based on the allocation of Distributable Value between and among senior and subordinate
COFINA Bondholders set forth on Exhibit 2, and do not waive any of their respective rights, claims and
defenses with respect to such allocation of Distributable Value to the extent altered, or challenged or objected
to by any other party in connection with any proceeding.
 6

 Ambac Assurance Corporation, as an insurer and/or holder of COFINA Bonds

 Assured Guaranty Municipal Corp.
 National Public Finance Guarantee Corp., as an insurer and/or holder of COFINA
Bonds
 Exhibit 2

 The quantum of newly issued trust certificates is set on a 1.2x minimum debt
service coverage ratio, and a debt service cap of $1.85 Bn per year (excluding the
residual)

 The 5.5% SUT supports $18.0 Bn of 6.0% cash pay certificates

 The trust supports $2.2 Bn of initial value CABs (accreting at 6.5%)

 Assumes a fully amortizing structure over 40 years

 The below tables set forth the Distributable Value, recoveries and the Capital
Structure allocations11 121314

11
Recoveries subject to confirmation of amount of GO Bonds and COFINA Bonds held by Commonwealth
affiliates.
12
Assumed effective date of July 1, 2018. If the COFINA plan of adjustment effective date is later than July
1, 2018, the COFINA cash balance will be higher in an amount equal to the SUT tranferred to COFINA under
the COFINA enabling act and the COFINA bond resolution. Amounts not adjusted for professional fees and
expenses TBD.
13
Based on claims including post-petition interest as of 7/1/2018.
14
Represents illustrative average recovery value, as of the effective date of COFINA plan of adjustment, in
terms of the instruments in the Distributable Value table. Recovery ranges for COFINA Senior Bonds and
COFINA Subordinate Bonds are estimated depending on final securities design. Within each COFINA class,
each creditor that is a monoline will be given an option to elect different securities in terms of rate and face
amount depending on investment objectives; provided, however, that such options will not in any way affect
or otherwise modify the timing, priority or amount of any payment of Distributable Value to the GO
Bondholders, other COFINA Bondholders and GUCs.
Exhibit B
Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege
Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege

Executive Summary

April 2018 Oversight Board Fiscal Plan, “Restoring Growth and Prosperity” (p.5)

Puerto Rico is committed to repaying an affordable and sustainable amount of its outstanding debt and to treating its
creditors equitably; however, it needs a comprehensive restructuring of its debt – in addition to the adoption of pro-growth
structural reforms – to have renewed access to the capital markets and to create the basis for a growing, sustainable economy.
The best time to implement these reforms and to restructure the debt is while Puerto Rico has the temporary benefits of
Federal disaster relief funding and a stay on debt service. Therefore, time is of the essence. The New Fiscal Plan calls for
ambitious and immediate action to return opportunity and prosperity to Puerto Rico as soon as possible

 These cases need to be resolved for Puerto Rico to move forward

 Title III restructuring limits private capital formation, foreign investment and bank lending
 The Commonwealth-COFINA Joint Proposed Settlement (“Proposed Settlement”) could pave the way for Puerto Rico to exit
years of disruptive default and costly litigation
 Creditors agree that “time is of the essence,” and many have united in an attempt to substantially resolve these cases
now
 The Proposed Settlement would:
 Resolve substantial risks to the Commonwealth by creating a non-recourse currency
 Provide approximately $10 Bn of debt relief
 Avoid potentially extreme and absolute litigation outcomes
 Speed up progress of the Title III case and reduce expenses
 This presentation is not intended to be:
 A legal document – it does not set forth legal arguments pertaining to the Commonwealth-COFINA dispute or the
related stipulation, and the settlement proposal is non-binding and subject to final agreement and definitive
documentation
 An acceptance or critique of Fiscal Plans

Note: Supporting Parties include Monolines, Asset Managers and Bonistas del Patio
Page 2
Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege

Proposed Settlement Framework

A proposed settlement of the Commonwealth-COFINA dispute based on the retention of 5.5% Sales and Use Tax (“SUT”)
by a newly-formed PR Securitization Trust (the “Trust”)
 The Trust would take ownership of the 5.5% SUT through the effective date of COFINA plan of adjustment plus 40 years (or
such later date as of which the new trust certificates are paid in full)
 COFINA bondholders would receive Trust certificates entitling them to:
 52.5% of future 5.5% SUT cash flows and 52.5% of Bank of New York Mellon cash

– To be structured with 1.2x debt service coverage into Current Interest Bonds (“CIBs”) with a 6.0%
interest rate and Capital Appreciation Bonds (“CABs”) with a 6.5% interest rate along with a pro rata
interest in the residual cash flows of the 5.5% SUT that remain after payment of interest and principal on
the CIBs and CABs (the “Residual,” which has been valued using a 15% discount rate)
 Participating GO bondholders would tender1 their bonds into the Trust and receive:
 46.2% of future 5.5% SUT cash flows and 46.2% of Bank of New York Mellon cash

– To be structured with 1.2x debt service coverage into CIBs with a 6.0% interest rate and CABs with a
6.5% interest rate along with the Residual
 Commonwealth/GO remainder claim certificates would be supported by the remainder of GO claims, as of the
effective date (assumed to be 7/1/18), in the Commonwealth Title III (as calculated by taking par plus accrued
claim amount less the distributable value received by GO bondholders)
 Participating Commonwealth General Unsecured Claims (“CW GUCs”) up to an allowed claim amount of $500 MM
would have the right to tender their claims to the Trust and receive:
 1.3% of future 5.5% SUT cash flows and 1.3% of Bank of New York Mellon cash

– To be structured with 1.2x debt service coverage into CIBs with a 6.0% interest rate and CABs with a
6.5% interest rate along with the Residual

1. GO tender does not include QZAB and QSCB bonds, which receive Federal subsidies that cover approximately 80% of current interest expense
Page 3
Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege

Proposed Settlement Framework (cont’d)

 Respective claims pools would be calculated as full par, plus pre-petition and post-petition accrued interest and capital
appreciation as of the effective date (assumed to be July 1, 2018), with no discount for OID
 The Proposed Settlement would be premised on establishing a mechanism that would prohibit the Commonwealth from being
able to alter or discontinue the full flow of 5.5% SUT to the Trust until its maturity
 Property rights in 5.5% SUT continue, backed by a Federal court order
 All take-back CIBs and CABs would be tax-exempt
 Commutation options, if any, would be addressed in the COFINA plan of adjustment in a manner satisfactory to the
Supporting Parties that are monoline insurers, each with respect solely to its insured bonds. To the extent the COFINA plan
of adjustment includes a payment commutation option, each insured holder may elect to accept or decline such commutation
option
 Title III Court would retain jurisdiction over implementation of Proposed Settlement, including amount of 5.5% SUT transferred
to COFINA and allocation of 5.5% SUT to creditors of Trust
 All professional fees of restructuring Supporting Parties would be reimbursed out of the Trust

Page 4
 Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege

Non-Recourse Structure
 The Proposed Settlement is premised on a non-recourse structure that would limit the resources pledged to
creditors and is a bet on the future of Puerto Rico’s economy
 The Proposed Settlement would limit both GO and COFINA bondholders’ claims1 to the 5.5% SUT, and would free all
other stakeholders from significant claims on all “available resources”
 The Trust certificates would effectively be growth bonds that rise and fall with the economy with no recourse in the
event of underperformance
 The Proposed Settlement would leave 90%+ of budgeted revenues completely unencumbered going forward
 The non-recourse nature of the Proposed Settlement structure would advantage all other stakeholders

1: Other than the GO remainder claims Page 5

 Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege

The Proposed Settlement Makes Sense for All Stakeholders

 The Proposed Settlement would result in significant debt relief for Puerto Rico
 As part of the deal, COFINA creditors would receive 64.5% recovery (allocated between senior and subordinated COFINA
bondholders as set forth below) and GO bondholders receive 58.6% recovery
 The split of value (52.5% to COFINA and 47.5% to the Commonwealth) would protect the Commonwealth against a
potentially extreme and absolute result in the legal process
 The Proposed Settlement reduces claims by $10 Bn
$ in MMs
Distributable Value
Blended PV of Fixed Debt Service from 5.5% SUT 20,241
PV of Residual 5.5% SUT 1,672
Expected Cash in COFINA as of Effective Date 1,195
Total Distributable Value 23,108
Claim (7/1/18) % of BNYM Cash % of 5.5% SUT Recovery (7/1/18) 2
GO Debt Recovery (from Distributable Value) 18,244 46.2% 46.2% 58.6% 10,684
GUC Tendered Claim 500 1.3% 1.3% 58.6% 293
COFINA Recovery 18,806 52.5% 52.5% 64.5% 12,132
COFINA Sr. Recovery 1 8,255 52.5% 32.2% 93.0% - 95.0%
COFINA Sub Recovery 1 10,551 – 20.3% 42.2% - 43.2%
Total 37,550 23,108

Capital Structure
GO Debt GUC COFINA Sr. COFINA Sub Total
Cash 553 15 627 - 1,195
Cash Pay Bonds 8,329 228 5,797 3,660 18,014
Residual 773 21 538 340 1,672
CABs 1,029 28 717 452 2,227
Total 10,684 293 7,680 4,452 23,108
Distribution (%) 46.2% 1.3% 33.2% 19.3% 100.0%

Total GO, GUC and COFINA Claims 37,550

New Debt in Securitization (20,241)
Debt Relief before Remaining GO Claim 17,309
Remaining GO Claim at CW (7,561)
Debt Relief after Remaining GO Claim 9,748

Note: 5.5% SUT assumed to grow at the overall GNP growth rates from the April 2018 Commonwealth Fiscal Plan
1. Represents illustrative average recovery value, as of the effective date of COFINA plan of adjustment, in terms of the instruments in the Distributable Value table. Recovery ranges for COFINA
Senior Bonds and COFINA Subordinate Bonds are estimated depending on final securities design. Within each COFINA class, each creditor that is a monoline will be given an option to elect
different securities in terms of rate and face amount depending on investment objectives; provided, however, that such options will not in any way affect or otherwise modify the timing, priority or
amount of any payment of Distributable Value to the GO Bondholders, other COFINA Bondholders and GUCs Page 6
 Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege

Illustrative Cash Flows

$3,000 $25

$2,500
$20

$2,000

Debt Balance in Bns

$15
$ in MMs

$1,500

$10

$1,000

$5
$500

$0 -
2019 2022 2025 2028 2031 2034 2037 2040 2043 2046 2049 2052 2055 2058

Debt Service Residual 5.5% SUT Debt Balance

$ in MMs (Apr (FOMB) FP Projection)

2019 2023 2030 2035 2040 2045 2050
Debt Balance 20,386 20,640 20,578 19,969 18,577 15,832 11,264
Debt/GNP 30.4% 27.1% 23.3% 20.7% 17.1% 12.8% 8.0%
Debt/Total Local Revenues 1.42x 1.38x 1.40x 1.36x 1.22x 0.99x 0.67x

Note: 5.5% SUT assumed to grow at the overall GNP growth rates from the April 2018 Commonwealth Fiscal Plan Page 7
Subject to FRE 408 and all Local Law Equivalents Settlement and Mediation Privilege

Conclusion
 The Proposed Settlement reflects a constructive evolution in the Commonwealth-COFINA dispute
 This represents the first consensual, comprehensive settlement proposal arrived at through mediation

 The Proposed Settlement was developed after substantial collaborative engagement between principals with divergent
interests and the mediation team

 The Proposed Settlement has broad support from a diverse group of parties
 Monolines, Asset Managers and Bonistas del Patio all support the Proposed Settlement

 Many of these institutions have significant and varied investments in Puerto Rican issuers away from COFINA and GO Bonds

 By significantly reducing the magnitude of GO bondholder debt against the Commonwealth, the Proposed Settlement would
pave the way for a more efficient plan and confirmation process in the Commonwealth Title III
 This could improve the position of all other creditors of the Commonwealth, including pensioners, as there would be a
materially reduced GO claim class impacting the Commonwealth Title III plan and confirmation process
 It could also pave the way for a mediation of the Commonwealth plan

Page 8