P.R. Laws tit. 22, § 1083
Notwithstanding any provision of this chapter or any other law of the Commonwealth of Puerto Rico, prior to the date on which it has been one (1) year and one (1) day after the Corporation no longer has any restructuring bonds outstanding or any ancillary agreement with payment obligations that have or may become due thereunder, the Corporation shall have no authority to file a petition for relief as a debtor under any chapter of the federal bankruptcy code or any other bankruptcy, insolvency, debt composition, moratorium, receiver, or similar federal laws or any bankruptcy, moratorium, debt adjustment, composition or similar laws provide for the suspension or delay of payment or the discharge or reduction in amount owed on any restructuring bonds as may, from time to time, be in effect, and no public officer, organization, entity, or other person shall authorize the Corporation to be or become a debtor under chapter 9, or similar federal law, or under any such law of the Commonwealth of Puerto Rico, during such period. The Commonwealth of Puerto Rico hereby pledges to the owners of the restructuring bonds and the parties to any ancillary agreements that the Commonwealth of Puerto Rico shall not limit or alter the denial of authority under this section during the period referred to in the preceding sentence. The Corporation, as acting agent of the Commonwealth of Puerto Rico, shall include this pledge as an agreement of the Commonwealth in any contract entered into with the holders of restructuring bonds or parties to such ancillary agreement.
The Commonwealth of Puerto Rico further covenants, and pledges and agrees with the holders of any restructuring bonds and with those persons that enter into contracts with the Corporation, including parties to any ancillary agreement, pursuant to the provisions of this chapter, that after the issuance of restructuring bonds, the Commonwealth of Puerto Rico shall not authorize the issuance of debt by any public corporation and government instrumentality of the Commonwealth of Puerto Rico or any other person whose debt is secured by restructuring property or any other rights and interests in rates, charges, taxes, or assessments that are separate from rates and charges of the Authority and that are imposed on customers to recover the ongoing financing costs of such debt, if upon the issuance of such debt, the collateral for any restructuring bonds or such ancillary agreements shall be materially impaired. It shall be assumed that such collateral shall not be materially impaired if upon the issuance of such debt, the credit ratings for the then outstanding restructuring bonds (without regard to any third-party credit enhancement) shall not have been reduced or withdrawn. The Corporation is hereby authorized and directed as agent of the Commonwealth to include this obligation as an agreement of the Commonwealth of Puerto Rico in any contract entered into with the holders of restructuring bonds or such persons.
The Commonwealth of Puerto Rico further covenants, and pledges and agrees with the holders of any restructuring bonds issued under this chapter and with those persons that enter into other contracts with the Corporation, including parties to any ancillary agreement, pursuant to the provisions of this chapter, that it shall not limit, alter, impair, postpone, or terminate the rights conferred in this chapter, any restructuring resolution and related agreements, including the requirements in §§ 1066 and 1067 of this title, as well as in Chapter IV of this Act, until such restructuring bonds and the interest thereon are paid or legally defeased in accordance with their terms, and such other contracts are fully carried out by the Corporation. The Corporation, as agent of the Commonwealth of Puerto Rico, shall include this covenant as an agreement of the Commonwealth of Puerto Rico in any contract entered into with the holders of restructuring bonds.
The Commonwealth of Puerto Rico also covenants, and pledges and agrees with the holders of any restructuring bonds issued under this chapter and with those persons that enter into other contracts with the Corporation, pursuant to the provisions of this chapter, that after the issuance of restructuring bonds, neither the Commonwealth of Puerto Rico nor any agency, public corporation, municipality or other instrumentality thereof (including the Commission) shall take or allow any action to be taken to limit, alter, reduce, impair, postpone, or terminate the rights conferred in any restructuring resolution, including those related to transition charges and the related adjustment mechanism, as the same may be adjusted from time to time pursuant to the applicable restructuring resolution, in a manner that impairs the rights or remedies of the Corporation or the holders of the restructuring bonds, parties to any ancillary agreement or any financing entity or the collateral for the restructuring bonds or ancillary agreements, or that impairs the restructuring property or the billing or collection of transition charge revenues. Neither shall the amount of revenues earned from restructuring property be subject in any way to limitation, alteration, reduction, impairment, postponement, or termination by the Commonwealth of Puerto Rico or any agency, public corporation, municipality, or other instrumentality thereof, except as contemplated by the adjustment mechanism. The Corporation, as agent of the Commonwealth of Puerto Rico, shall include this covenant as an agreement of the Commonwealth in any contract entered into with the holders of restructuring bonds or parties to such ancillary agreement.
History —Feb. 16, 2016, No. 4, § 41.