Puerto Rico Emergency Power Initiative
Optimized 120-Day Institutional Capital Deployment Structure
A layered structured finance transaction combining mobilization bridge financing, equipment-backed lending, receivables monetization, financial guarantee bond enhancement, and institutional syndication — engineered for maximum capital efficiency across the initial deployment window.
Prepared by Arbitrage Business and Loan | Structured Finance Advisory & Capital Markets
Transaction Overview
Executive Summary
The Puerto Rico Emergency Power Initiative deploys a sophisticated, multi-tranche institutional capital structure designed to optimize efficiency during the critical first 120 days of emergency power deployment. Rather than relying on a single undifferentiated credit facility, the transaction layers multiple complementary financing instruments — each serving a discrete functional purpose within the capital stack — to minimize upfront cash deployment while maximizing scalable institutional leverage.
The structure combines six primary capital instruments:
Mobilization Bridge Financing
$200M short-duration facility covering logistics, FEMA onboarding, fuel procurement, and site activation.
Equipment Finance Facility
5% equity down payment per asset; 95% balance financed over 8-month amortization schedule.
Receivables Monetization
PREPA-generated invoices assigned into escrow to drive borrowing-base expansion and lender repayment.
Financial Guarantee Bond Enhancement
Institutional credit wrap reducing loss severity, improving advance rates, and supporting syndication scalability.
$506M ABL Liquidity Facility
Contingency institutional liquidity reserve bridging receivable timing gaps during ramp-up.
Institutional Syndication Layer
Commercial bank, insurance market, and private credit participation distributing exposure across the capital markets.
Projected PREPA Receivables
$129M
Per Month
Projected PREPA receivables once power generation operations are fully active and invoicing commences.
$506M
ABL Facility
Asset-based liquidity backstop supporting institutional repayment continuity.
120
Day Deployment
Structured deployment horizon from mobilization through institutional stabilization.
Capital Architecture
Institutional Capital Structure
The following layered capital stack illustrates the full institutional financing architecture underpinning the Puerto Rico Emergency Power Initiative. Each tranche is structured to serve a discrete function — from day-one mobilization liquidity through long-dated receivables monetization and syndication distribution — minimizing upfront cash requirements while maintaining institutional-grade credit discipline at every layer.
Total Estimated Project Cost
~$1.56B across mobilization, equipment acquisition, labor, O&M, insurance, and compliance
Equity Minimization
5% equipment down payment structure dramatically reduces upfront sponsor cash deployment
Receivables-Driven Repayment
$129M monthly PREPA receivables flow through escrow lockbox to service all senior facilities
Credit Enhancement Wrap
Financial Guarantee Bond wraps mobilization, equipment, and receivables layers for institutional underwriting
Tranche 1 — Bridge Financing
$200 Million Mobilization Bridge Facility
The Mobilization Bridge Facility constitutes the foundational liquidity instrument of the capital structure, designed to fund the entirety of first-phase deployment activities during the initial 120-day operational window. As a short-duration working capital infrastructure finance facility, it is specifically sized to cover the discrete categories of pre-revenue expenditure that precede PREPA invoice generation and receivables monetization.
The facility addresses the following deployment cost categories, consistent with the pre-approval framework:
Mobilization & Deployment
~$180M — Transportation logistics, engineering mobilization, site activation, and compliance onboarding
Fuel Procurement
Initial fuel inventory acquisition and supply-chain retainer agreements to ensure uninterrupted generation from Day 1
FEMA Onboarding
Federal program enrollment, compliance documentation, disaster-relief framework integration, and agency coordination
Subcontractor Retainers
Engineering, installation, and integration subcontractor engagement fees to secure Day 31–60 execution capacity
Facility Size
$200,000,000
Duration
120-Day Short-Duration Bridge
Primary Repayment
PREPA Receivables Escrow Waterfall
Credit Support
Financial Guarantee Bond + SBLC Enhancement

The Bridge Facility is structured as short-duration working capital infrastructure finance — not long-dated project debt — ensuring its repayment is entirely driven by receivables cash flows rather than sponsor liquidity.
Tranche 2 — Equipment Finance
Optimized Equipment Finance Structure
Capital Efficiency Framework
5%
Equity Deployment
Down payment per equipment asset — dramatically reducing upfront capital consumption during deployment phase
95%
Debt-Financed
Remaining equipment value financed through institutional equipment finance facility
9 Mo
Amortization
Full equipment finance facility amortization supported by PREPA receivables waterfall
~$900M
Equipment Acquisition
Total estimated equipment procurement budget across all asset categories
Rather than deploying the full ~$900M equipment acquisition budget from balance sheet or bridge capital, the structure utilizes a highly optimized equipment finance facility that limits upfront equity deployment to 5% per asset — with the remaining 95% balance carried through an institutionally structured 9-month amortizing facility. This approach preserves working capital, maximizes leverage efficiency, and aligns equipment debt repayment directly with PREPA receivables generation.
Equipment categories financed under this structure include:
Generation Units
Mobile and fixed-base power generation equipment forming the primary production asset base
Transformers & Switchgear
High-voltage step-up/step-down transformers and distribution switchgear for grid integration
Fuel Systems
Bulk fuel storage, distribution pipework, and integrated fuel management infrastructure
Distribution Systems
Last-mile distribution infrastructure including mobile substations and cabling systems
Tranche 3 — Receivables Finance
PREPA Receivables Generation & Monetization
Once power generation operations commence — projected at approximately Day 31–45 — the structure transitions from deployment-mode financing to receivables-driven repayment. The Puerto Rico Electric Power Authority (PREPA) will generate monthly invoices upon metered power delivery, creating a predictable, government-backed receivables stream that anchors the entire repayment architecture.
Projected PREPA receivables: approximately $129,000,000 per month once operations reach stabilized generation capacity.
These receivables are immediately assigned into the escrow lockbox structure upon generation, where they are applied through the institutional waterfall to service all senior facility obligations — including mobilization bridge reduction, equipment finance amortization, and ABL interest — before any distributions are made to the sponsor.
Borrowing-Base Expansion
Eligible assigned receivables expand the ABL borrowing base, unlocking additional institutional liquidity as operations scale
Bridge Facility Repayment
First waterfall priority directs PREPA cash flows to accelerated mobilization bridge amortization
Equipment Amortization
Receivables support the structured 9-month equipment finance repayment schedule without sponsor cash injection
Syndication Scalability
Seasoned, predictable receivables improve lender advance rates and support additional syndication tranching
The receivables monetization flow ensures that the capital structure becomes self-funding within the first operational period, minimizing ongoing sponsor liquidity requirements and enabling institutional lender repayment on a fully collateralized, cash-flow-supported basis.
Credit Enhancement — Priority Layer
Financial Guarantee Bond Enhancement Layer

The Financial Guarantee Bond represents the most critical credit enhancement instrument within the transaction — functioning as the institutional wrapper that elevates the overall structure to investment-grade underwriting standards and enables broad syndication participation.
The Financial Guarantee Bond is structured to provide institutional credit enhancement across all primary financing tranches — reducing lender loss severity, supporting advance rate optimization, and enabling syndication scalability to a broader universe of institutional participants who require credit-enhanced paper. Its presence within the capital stack fundamentally transforms the risk profile of each underlying facility from a direct infrastructure credit exposure to a guaranteed, credit-wrapped institutional obligation.
The Financial Guarantee Bond wraps the following transaction components:
Mobilization Bridge Facility
Guarantee supports outstanding principal and interest obligations during the pre-receivables deployment window — the highest-risk phase of the transaction lifecycle
Equipment Finance Layer
Guarantee reduces equipment finance advance risk, improving lender loss-given-default and enabling higher LTV underwriting on mobile infrastructure assets
Receivables Structure
Guarantee supports receivables assignment integrity and provides credit continuity during PREPA invoice generation ramp-up and collection lag periods
Institutional Syndication Participants
Guarantee provides credit wrap for secondary market participants, enabling broader distribution to insurance companies, pension-regulated credit funds, and investment-grade syndication desks
Primary institutional benefits of the Financial Guarantee Bond:
Loss Severity Reduction
Limits lender exposure in stress scenarios by guaranteeing outstanding principal recovery
Advance Rate Improvement
Enables higher advance rates on equipment and receivables collateral, maximizing available liquidity
Underwriting Eligibility
Upgrades institutional underwriting eligibility for insurance-regulated and pension-governed lenders
Syndication Scalability
Broadens syndication distribution to credit-enhanced paper buyers beyond direct infrastructure lenders

Liquidity continuity is maintained throughout deployment and receivables ramp-up periods, ensuring no gap between mobilization expenditure and institutional facility drawdown availability.
Tranche 4 — ABL Liquidity Reserve
$506 Million Asset-Based Liquidity Facility
The $506 Million Asset-Based Liquidity Facility functions as the institutional contingency liquidity reserve underpinning the entire capital structure. It is specifically engineered to address the inherent timing gap between deployment expenditure and receivables generation — ensuring uninterrupted operational liquidity during the period between equipment commissioning and PREPA invoice collection stabilization.
Unlike the mobilization bridge — which is a discrete, purpose-specific facility — the ABL facility is a revolving structure whose availability scales dynamically with the borrowing base. As PREPA receivables are assigned and seasoned, the eligible borrowing base expands, providing progressively greater institutional liquidity headroom in direct proportion to operational growth.
Receivable Timing Gap Coverage
Covers temporary shortfalls between invoice generation dates and actual PREPA collection receipt — typically a 30–45 day collection lag
Pre-Seasoning Liquidity Bridge
Supports institutional liquidity before the PREPA receivables portfolio reaches sufficient seasoning to support full borrowing-base availability
Operational Stabilization Reserve
Provides contingency liquidity for O&M expenditure (~$9M monthly) and insurance requirements (~$15M) without disrupting senior facility mechanics
Repayment Continuity Support
Ensures no interruption to scheduled lender repayment obligations irrespective of PREPA invoice timing or collection variance
Facility Size
$506,000,000
Structure
Revolving Asset-Based Line of Credit
Borrowing Base
Eligible PREPA Receivables + Equipment Collateral
Primary Function
Contingency Institutional Liquidity Reserve
Credit Support
Financial Guarantee Bond + SBLC Enhancement

The ABL facility acts as a liquidity backstop while PREPA receivables scale — functioning as a contingency institutional liquidity reserve rather than a primary deployment facility. Its availability is not drawn unless receivables timing gaps materialize, preserving the facility for genuine contingency use.
Ongoing O&M costs of approximately $9M per month and insurance requirements of approximately $15M are accommodated within the ABL borrowing base, ensuring these recurring obligations do not compress senior facility headroom.
Repayment Mechanics
Escrow & Lockbox Waterfall Architecture
All PREPA receivables are directed upon collection into a segregated, bank-controlled escrow lockbox account managed by an independent institutional trustee. The lockbox operates on a strict priority-of-payments waterfall ensuring controlled, sequential institutional repayment — with no sponsor distributions permitted until all senior and subordinated facility obligations are satisfied in full for each payment period.

Institutional Control Mechanics: The escrow lockbox is maintained under an intercreditor agreement executed by all senior facility participants. No single lender or the sponsor may direct receivables outside the established waterfall priority without unanimous lender consent — ensuring institutional-grade payment discipline at all times.

Reserve Allocations: Mandatory reserve contributions include a 3-month debt service reserve, a 30-day operating expense liquidity reserve, and a maintenance capital reserve — all funded from the receivables waterfall ahead of sponsor distributions.
Deployment Schedule
120-Day Institutional Deployment Timeline
The transaction deployment unfolds across four discrete 30-day phases, each with defined capital deployment activities, operational milestones, and financing transitions. The timeline is structured to ensure that institutional facilities are drawn in sequence with deployment progress — minimizing unnecessary capital commitment while maintaining operational momentum at every stage.
1
Days 0–30: Mobilization
Bridge Deployment: $200M mobilization bridge drawn. Logistics staging, equipment ordering (~$900M procurement process initiated). Site preparation across designated Puerto Rico generation locations. Fuel supply-chain contracts executed. FEMA onboarding and compliance documentation. Subcontractor retainer agreements executed. Insurance program (~$15M) placed. Permitting and compliance filings initiated (~$75M total program).
2
Days 31–60: Integration
Equipment Finance Draws: Equipment deliveries commence; 5% down payments deployed per asset; equipment finance facility draws initiated at 95% LTV. Infrastructure integration — transformers, switchgear, and distribution systems installed. Labor & installation crews mobilized (~$380M program). Initial generation units commissioned. First power delivery milestones achieved. ABL facility established and on standby.
3
Days 61–90: Receivables Ramp
Receivables Monetization Begins: Power production ramp-up to stabilized generation capacity. PREPA invoice generation commences. First receivables assigned into escrow lockbox. Borrowing-base calculation initiated against eligible assigned receivables. ABL facility begins receiving receivables-backed borrowing base. Initial waterfall payments to senior lenders. Syndication marketing commenced with receivables track record established.
4
Days 91–120: Stabilization
Institutional Stabilization: Receivables at ~$129M monthly run-rate. Equipment amortization acceleration. Mobilization bridge principal reduction from receivables waterfall. ABL borrowing base at full operational capacity. Syndication expansion to secondary participants. Liquidity optimization — reserve accounts fully funded. O&M steady-state operations (~$9M monthly). Full institutional reporting and covenant compliance package delivered to all facility participants.
Risk Architecture
Institutional Risk Mitigation Stack
The transaction employs a comprehensive, multi-layered institutional risk mitigation framework — ensuring that no single risk vector is left unaddressed and that the aggregate risk profile is consistent with investment-grade infrastructure credit underwriting standards. Each layer of risk mitigation serves a distinct protective function and is designed to interact with complementary layers to provide overlapping coverage in stress scenarios.
Financial Guarantee Bond
Senior institutional credit wrap covering outstanding principal and interest obligations across all primary facility tranches. Reduces lender loss-given-default and supports investment-grade underwriting eligibility for insurance-regulated and pension-governed institutional participants.
Trade Credit Insurance
Covers PREPA receivables concentration risk — ensuring that delayed or disputed PREPA invoice payments do not impair the receivables borrowing base or interrupt scheduled waterfall distributions to facility lenders.
Political Risk Insurance
Provides institutional coverage against sovereign or regulatory intervention, expropriation risk, currency inconvertibility, and governmental action that could impair PREPA contract performance or receivables collection.
SBLC Liquidity Enhancement
Standby Letter of Credit support from a rated banking counterparty providing a direct, unconditional payment undertaking as a liquidity backstop for the ABL and bridge facilities in the event of receivables disruption.
Equipment Collateral
First-priority perfected security interest in all generation equipment, transformers, switchgear, distribution systems, and fuel infrastructure — providing tangible asset recovery value in enforcement scenarios.
Receivables Assignment
Absolute legal assignment of PREPA receivables to the SPV and escrow structure — removing receivables from the sponsor's bankruptcy estate and providing lenders with direct, insolvency-remote claim on collections.
Escrow Control
All collections flow directly to the bank-controlled escrow lockbox — preventing sponsor discretion over receivables and ensuring strict waterfall priority compliance independent of sponsor financial condition.
SPV Isolation & Institutional Syndication
Special Purpose Vehicle structure provides bankruptcy remoteness and balance sheet isolation. Institutional syndication across multiple lender classes diversifies concentration risk and reduces single-counterparty exposure.
Capital Markets Distribution
Institutional Syndication Strategy
The syndication strategy is designed to distribute institutional exposure across a diversified universe of capital market participants — leveraging the credit-enhanced, Financial Guarantee Bond-wrapped paper to maximize distribution depth and minimize concentration in any single lender or investor class. The transaction is structured to appeal simultaneously to multiple institutional buyer segments, each attracted by distinct structural features of the layered capital stack.
Commercial Bank Participation
Senior secured tranches targeting domestic and international commercial banking participants. Structured for Basel III regulatory capital efficiency with strong collateral coverage and controlled waterfall mechanics.
Insurance Market Participation
Financial Guarantee Bond-wrapped tranches structured for insurance company general account investment — meeting investment-grade rating and NAIC schedule criteria for regulated institutional buyers.
Private Credit Participation
Subordinated and mezzanine tranches targeting infrastructure private credit funds and direct lending platforms seeking yield-enhanced, collateral-backed exposure to regulated utility receivables.
Trade Finance Desk Participation
Receivables monetization and borrowing-base tranches accessible to trade finance desks and receivables purchase platforms familiar with utility-sector obligor credit analysis.
Syndication architecture objectives:
Exposure Diversification
No single syndication participant to hold more than a defined concentration limit across any individual facility tranche, reducing systemic counterparty risk within the capital structure.
Institutional Liquidity Distribution
Structured to ensure secondary market liquidity through standardized documentation and rated, credit-enhanced paper suitable for secondary trading and portfolio transfer.
Scalable Capital Architecture
As PREPA receivables season and borrowing-base availability expands, the syndication structure is designed to accommodate incremental tranche additions without requiring full restructuring of existing facilities.

The Financial Guarantee Bond wrapper is the critical enabler of broad-based syndication distribution — transforming a direct infrastructure credit into credit-enhanced institutional paper accessible to the widest possible universe of regulated institutional buyers.
Structural Differentiation
Why This Structure Achieves Institutional Grade
The structured financing architecture deployed in this transaction represents a fundamental departure from traditional single-tranche infrastructure lending. The comparison below illustrates how layered, credit-enhanced structured finance transforms the risk and capital efficiency profile relative to conventional direct infrastructure credit.
Segmented Exposure Architecture
Each financing tranche carries its own discrete collateral package, repayment source, and credit support — isolating risk within defined structural boundaries rather than exposing all lenders to aggregate transaction risk.
Reduced Upfront Deployment
5% equipment equity deployment vs. 100% purchase price — preserving working capital for operations and dramatically improving capital efficiency during the pre-revenue deployment phase.
Controlled Cash Flow Mechanics
Escrow lockbox waterfall removes all sponsor discretion from receivables application — ensuring institutional repayment priority is enforced by structural mechanics rather than contractual promises alone.
Institutional Scalability
The modular, tranched architecture enables facility expansion, syndication enlargement, and incremental borrowing-base growth without requiring full restructuring — supporting scalability from $506M to a larger institutional platform as operations grow.
Strategic Vision
Strategic Financial Objective
The strategic objective of this transaction architecture extends materially beyond the boundaries of conventional project finance. While project finance optimizes for a single asset's risk-return profile, the Puerto Rico Emergency Power Initiative is designed as the foundational infrastructure layer of a scalable institutional infrastructure-finance platform — a repeatable, institutionally credentialed financing structure capable of deployment across multiple emergency power, resilience infrastructure, and utility-backed credit opportunities.
The platform combines the following institutional finance disciplines into a single, integrated transaction architecture:
Mobilization Liquidity
$200M bridge facility providing institutional working capital for pre-revenue deployment activities — the core enabling facility of the deployment phase
Equipment-Backed Lending
5% equity / 95% financed equipment structure creating an institutionally scalable, asset-backed debt layer across ~$900M of generation infrastructure
Receivables Monetization
~$129M monthly PREPA receivables assigned, escrowed, and monetized as the primary repayment engine — transforming utility revenue into structured institutional paper
Financial Guarantee Bonds
Institutional credit enhancement wrapping all primary tranches — enabling investment-grade distribution and broadening the institutional buyer universe to insurance, pension, and regulated capital
ABL Liquidity Support
$506M revolving facility providing dynamic, receivables-driven liquidity backstop — scaling in direct proportion to operational receivables generation
Escrow-Controlled Repayment
Bank-grade lockbox waterfall enforcing strict institutional payment priority — the structural backbone ensuring lender confidence at every operational stage
Institutional Syndication
Multi-class distribution architecture across commercial banks, insurance markets, private credit, and trade finance — enabling the broadest possible institutional capital access

This transaction is engineered to the standard of Goldman Sachs Infrastructure + J.P. Morgan Structured Finance + BlackRock Private Credit — combining the capital efficiency of institutional structured finance with the operational discipline of infrastructure private credit.
Institutional Infrastructure Finance Platform
Mobilization Finance • Receivables Monetization • Credit Enhancement • Institutional Syndication
$200M
Mobilization Bridge Facility — 120-day short-duration infrastructure working capital
506M
Asset-Based Liquidity Facility — revolving contingency institutional reserve
$129M/Mo
Projected PREPA Receivables — primary repayment engine driving waterfall distributions
~$900M
Equipment Finance Program — 5% equity / 95% institutional debt across all asset categories
Contact & Transaction Inquiries
Qualified institutional investors, syndication participants, credit enhancement providers, and advisory counterparties are invited to direct transaction inquiries to:
Arbitrage Business and Loan
Structured Finance Advisory & Capital Markets

This presentation has been prepared for informational purposes for qualified institutional counterparties only. It does not constitute a solicitation, offer, or commitment to provide financing. All transaction structures, amounts, and projections are indicative and subject to due diligence, credit approval, and definitive documentation.
Prepared by Arbitrage Business and Loan | Structured Finance Advisory & Capital Markets | Confidential — For Qualified Institutional Use Only
Transaction Reference Data
Financial Structure Reference Data
The following transaction assumptions and operational cost estimates underpin the capital structure throughout this presentation. All figures are based on the pre-approval framework and are indicative pending final due diligence and credit committee approval.
Primary Facility Parameters
Operational Cost Estimates (Pre-Approval Framework)

All figures are indicative. Final transaction amounts are subject to equipment procurement negotiation, PREPA contract confirmation, insurance market capacity, and institutional credit committee approval processes.
Appendix — Structure Summary
Transaction Architecture at a Glance
A consolidated reference summary of the complete institutional capital deployment structure for the Puerto Rico Emergency Power Initiative — presenting the full layered financing architecture, risk mitigation stack, and deployment mechanics in a single consolidated view for institutional counterparty reference.
01
$200M Mobilization Bridge Facility
Short-duration working capital infrastructure finance covering Days 0–120 deployment expenditure. Repaid from PREPA receivables waterfall. Credit-wrapped by Financial Guarantee Bond. SBLC-backed liquidity enhancement.
02
5% Equity / 95% Equipment Finance Facility
Optimized capital deployment against ~$900M equipment program. 8-month amortization schedule driven by PREPA receivables. First-priority perfected security interest in all generation infrastructure assets.
03
PREPA Receivables Monetization (~$129M/mo)
Government utility receivables assigned absolutely into SPV escrow. Drives borrowing-base expansion, bridge repayment, and equipment amortization. Covered by trade credit insurance against collection risk.
04
Financial Guarantee Bond Enhancement
Institutional credit wrap across all primary tranches. Reduces lender loss severity, improves advance rates, and enables investment-grade syndication distribution to insurance-regulated and pension-governed institutional participants.
05
$506M Asset-Based Liquidity Facility
Revolving contingency reserve scaling dynamically with eligible PREPA receivables borrowing base. Covers timing gaps, O&M (~$9M/mo), insurance (~$15M), and repayment continuity during receivables ramp-up.
06
Escrow Lockbox Waterfall & Institutional Syndication
Bank-controlled lockbox enforces strict payment priority: interest → equipment amortization → bridge reduction → reserves → O&M → sponsor distributions. Multi-class syndication across commercial banks, insurance, private credit, and trade finance.
Arbitrage Business and Loan | Structured Finance Advisory & Capital Markets | [email protected]
Confidential — Prepared for Qualified Institutional Counterparties Only