P.R. Laws tit. 23, § 5017
In addition to the powers granted to the Company in § 5007 of this title:
(a) The Company is hereby authorized to issue bonds from time to time for those principal amounts that, in the opinion of the Company, are necessary to provide sufficient funds for the total or partial payment of the cost of any project or projects, and for the payment of interest on the Company’s bonds for whatever period the Company may determine, for the creation of reserves to secure said bonds, and for the payment of whatever other Company expenses, including project costs, that may be incidental, necessary or convenient to carry out its purposes or corporate powers.
The bonds issued by the Company may be made payable from the total or from part of its gross or net income or from other income derived by the Company under the clauses of a financing contract regarding any project, as provided in the trust contract through which the bond issue is authorized. The principal and interest on the bonds issued by the Company may be secured through the total or partial encumbrance of any Company income and may be secured by the conveyance of any financing contract with regard to any project or part thereof. The resolution or resolutions authorizing bonds issue or the trust contract securing the same may contain provisions which shall become part of the contract with the holders of the bonds issued under said resolution or resolutions with regard to the security and the creation of the encumbrance on the income and assets of the Company, to the creation and maintenance of redemption and reserve funds, to the limitations related to the purposes for which the proceeds of the bonds may be used, or to limitations with regard to additional bond issues, to limitations with regard to the introduction of amendments or supplements to the resolution, or resolutions or to the trust contract, to the granting of rights, faculties or privileges and the imposition of obligations and responsibilities on the trustee under any trust contract, or to the operation and maintenance of projects, the setting of fees, rents and other charges for the use and occupancy of any project or its operation, to the rights, faculties, obligations and responsibilities that may eventually arise from noncompliance of any obligation under said resolution or resolutions or the trust contract, or with regard to any rights, faculties and privileges conferred upon the bondholders as security thereof to increase the saleability of the bonds.
(b) The bonds may be authorized through Company resolution or resolutions. They may be serial bonds or in series, carry any date or dates, mature on the term or terms not to exceed fifty years from their respective dates of issue and accrue interest at an interest rate or rates that do not exceed the maximum rate allowed by law at that time.
The bonds may be payable at the place or places, be it within or outside of Commonwealth of Puerto Rico, they may be of such a denomination or denominations or in such a form, whether as coupons or registered; they may enjoy such privileges for registry or conversion; they may be granted in such a manner, they may be payable through payment and may be subject to the terms of redemption, with or without a premium; they may provide for the replacement of mutilated, destroyed, stolen or lost bonds; they may be authenticated in such a manner and comply with such conditions and may contain such terms and conditions as may be provided by the resolution or resolutions.
The bonds may be sold at public or private sales at the price or prices determined by the Company; Provided, however, That the financing bonds may be sold or exchanged for Company bonds outstanding under those terms that in the opinion of the Company answer to its best interests. The form and nature of the bonds notwithstanding, and in the absence of an express warning on the face of the bond stating that it is not negotiable, all Company bonds, including any coupons belonging to the same, shall possess at all times, and it shall be understood that they possess, all the characteristics and incidentals (including their negotiability) of negotiable instruments under the laws of the Commonwealth of Puerto Rico.
(c) The proceeds of the sale of every bond issue shall be used solely to pay the cost of the project or projects, or of a part or parts thereof, for which said bonds have been issued, and they shall be reimbursed in the manner and under the restrictions, if any, that the Company provides in the trust contract that secures said bonds. Should the proceeds of any bond issue be below cost, because of an increase in construction costs or estimate errors, or for any other reason, additional bonds may be issued in the same manner to cover the amount of such deficiency, and unless otherwise provided in the trust contract, it shall be deemed that said bonds are of the same issue and that they shall be paid from the same funds without there being any preference or priority on the part of the bonds initially issued.
(d) Bonds may be issued under the provisions of this chapter without having to obtain the consent of any department, division, commission, board, body, bureau or agency of the Commonwealth and without any other procedure or any other condition or thing other than the procedures, conditions and [things] that are specifically required by this chapter and the provisions of the resolution authorizing the bond issue and the trust contract securing them; Provided, however, That the provisions of §§ 581—595 of Title 7 shall be applicable.
(e) Company bonds bearing the signature of Company officials in the performance of their duties on the date they are signed, shall constitute valid and binding obligations, even though before the delivery and payment of said bonds, any or all of the officials whose signatures, or facsimiles of their signatures, appear thereupon, have ceased as officials of the Company. The validity of the authorization and issue of the bonds shall not depend on, or be affected by, in any way whatsoever, any procedure related to the construction, acquisition, extension or improvement of the project for which the bonds are issued, or by any contract entered into with regard to said project. Any trust contract securing the bonds may provide for any of said bonds to contain a mention of the fact that it was issued according to the provisions of this chapter, and any bond containing such mention under the authority of such trust contract shall be deemed conclusively that is valid and that it has been issued pursuant to the provisions of this chapter. Neither the Company nor any other person offering the bonds shall be personally liable responsible for said bonds, nor shall they be subject to any civil liability whatsoever for said bond issue. The Company is empowered to purchase any bonds issued and outstanding, or assumed by it, with any funds available for that purpose.
History —July 10, 1992, No. 20, § 18.