Government Development Bank For Puerto Rico Places $3.5 Billion General Obligation Bonds

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TO NATIONAL EDITORS:

Government Development Bank For Puerto Rico Places $3.5 Billion

General Obligation Bonds

SAN JUAN, Puerto Rico, March 11, 2014 /PRNewswire-USNewswire/ -- The

Government Development Bank for Puerto Rico (GDB) today announced the

successful sale of tax-exempt fixed rate General Obligation (GO) Bonds

of the Commonwealth of Puerto Rico (the "Commonwealth") in the

aggregate principal amount of $3.5 billion. The bonds mature in 2035

and were issued at an 8.00% coupon, and an 8.727% yield.

The Commonwealth will receive approximately $3.2 billion in net

proceeds from the offering, approximately $900 million of which will

be used to refinance short-term obligations and swap termination

payments, and approximately $400 million of which will be used to

capitalize interest. The repayment of all outstanding variable rate

debt of the Commonwealth (other than $126 million in outstanding CPI

bonds) greatly simplifies the Commonwealth's capital structure and

reduces market and credit risk.

Remaining net proceeds will be used to refinance certain obligations

of the Commonwealth and of its instrumentalities with the GDB,

resulting in a liquidity infusion to the GDB of approximately $1.9

billion. GDB lines of credit repaid from bond proceeds were primarily

used to finance General Fund deficits during the current and prior

fiscal years.

The issue was upsized from $3.0 billion to $3.5 billion due to

unprecedented demand; total orders, received from 270 different

accounts, surpassed $16 billion, which represents more than four and a

half times the bonds available for sale. Notwithstanding the

upsizing, the Commonwealth retains approximately $900 million in GO

bond capacity under the constitutional debt limit, capacity which

should materially expand during fiscal year 2015 if fiscal year 2014

revenues come in line with forecasts.

GDB Interim President José V. Pagán Beauchamp said, "This liquidity

infusion, larger than originally anticipated, strengthens the GDB's

credit profile and its role as provider of interim and long-term

financing to the Commonwealth and its instrumentalities. With the

Commonwealth's near-term liquidity needs now substantially met and the

GDB's liquidity strengthened, we are committed to implementing our

plan to achieve our stated goals and to prudently manage our resources

as we continue to build a solid foundation for economic growth and

development. We are also committed to continued transparency with our

investor base and open and constructive engagement with our

investors."

GDB Chairman David H. Chafey stated, "The success of this issuance is

due to the significant steps the García Padilla administration has

taken since taking office in January 2013 to strengthen the

Commonwealth's credit profile, as well as the Governor's commitment to

balance the budget in fiscal year 2015. This issuance will support

the Commonwealth as we continue to implement our plan to make public

corporations self-sufficient, create jobs, and encourage economic

diversification."

Treasury Secretary Melba Acosta Febo commented, "Puerto Rico is

advancing on its path towards a balanced budget in fiscal year 2015,

and will continue to address its fiscal challenges in order to drive

long-term and sustainable economic growth. We will continue to

execute our comprehensive plan to strengthen the Treasury Department's

fiscal oversight efforts so that we achieve our fiscal and economic

goals."

The bonds also have a 6-year call option at par, which will permit the

Commonwealth to refinance the bonds in 2020 without premium as market

conditions allow.

Barclays, Morgan Stanley and RBC Capital Markets served as joint lead

managers for the bond offering, with Barclays acting as lead

book-running manager.

Not an Offering of Securities

This statement does not constitute, nor does it form part of, an offer

to sell or purchase, or the solicitation of an offer to sell or

purchase, any securities or an offer or recommendation to enter into

any transaction. This presentation has been prepared for informational

purposes only. Any offer or sale of any security may only be made

pursuant to the relevant offering documents and binding transaction

document and is subject to the detailed provisions therein, including

risk considerations. Prospective purchasers should obtain a copy of

the relevant offering materials prior to making any investment

decisions.

Forward-Looking Statements

The information included in this statement contains certain

forward-looking statements. These forward looking statements may

relate to the fiscal and economic condition, economic performance,

plans and objectives of the Commonwealth of Puerto Rico or its

agencies or instrumentalities. All statements contained herein that

are not clearly historical in nature are forward looking.

This statement is not a guarantee of future performance and involves

certain risks, uncertainties, estimates, and assumptions by the

Commonwealth and/or its agencies or instrumentalities that are

difficult to predict. The economic and financial condition of the

Commonwealth and its agencies or instrumentalities is affected by

various financial, social, economic, environmental, and political

factors. These factors can be very complex, may vary from one fiscal

year to the next, and are frequently the result of actions taken or

not taken, not only by the Commonwealth and/or its agencies or

instrumentalities, but also by entities such as the government of the

United States of America or other nations that are not under the

control of the Commonwealth. Because of the uncertainty and

unpredictability of these factors, their impact cannot, as a practical

matter, be included in the assumptions underlying the Commonwealth's

or its agencies or instrumentalities' projections.

SOURCE Government Development Bank for Puerto Rico (GDB)

-0- 03/11/2014

/CONTACT: Betsy Nazario, GDB Contact, (787) 415-1231, Betsy.Nazario@bgfpr.com; or María E. Quintero, Treasury Contact, (787) 398-0486, Maru.Quintero@hacienda.gobierno.pr

CO: Government Development Bank for Puerto Rico (GDB)

ST: Puerto Rico

IN: FIN

SU: ECO

PRN

-- DC81191 --

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