Consummation of Certain Settlements Reduces Assured Guaranty’s Puerto Rico Insured Exposure by $1.3 Billion
16 März 2022 - 5:50PM
Business Wire
On March 15, Assured Guaranty Municipal Corp. and Assured
Guaranty Corp., each a subsidiary of Assured Guaranty Ltd.
(together with its subsidiaries, Assured Guaranty), each settled
its exposure to the Puerto Rico General Obligation (GO), Public
Buildings Authority (PBA), Convention Center District Authority
(PRCCDA) and Puerto Rico Infrastructure Financing Authority (PRIFA)
bonds that it insured. As part of the settlements, Assured Guaranty
received certain plan consideration distributed under the
Commonwealth Plan of Adjustment (the Commonwealth Plan) and other
agreements that were confirmed in January 2022 by the United States
District Court of the District of Puerto Rico acting under the
Puerto Rico Oversight, Management, and Economic Stability Act
(PROMESA).
Assured Guaranty paid claims on its insurance obligations and
received cash, new GO bonds and contingent value instruments (CVIs)
in accordance with the terms of the settlement agreement applicable
to each bond issue.
Dominic Frederico, President and CEO of Assured Guaranty, said,
“These settlements are a huge step forward for Puerto Rico, and we
hope they provide momentum towards final resolution of the island’s
bankruptcy. They also bring Assured Guaranty closer to resolving
its insurance exposure to Puerto Rico credits by removing $1.3
billion of net par from our insured portfolio, which represented
39% of our non-paying Puerto Rico insurance exposure at year-end
2021.
“Assured Guaranty will continue to work constructively to
complete the settlement process for its other non-paying Puerto
Rico credits, and we hope that the current settlements will bring
forward renewed respect for consensual agreements and the rule of
law, and with it, access to the capital markets for Puerto
Rico.”
The Commonwealth Plan restructures approximately $35 billion of
debt (including $1.2 billion outstanding par of GO and PBA bonds
insured by Assured Guaranty), as well as other claims against the
government of Puerto Rico and certain entities, and $50 billion in
pension obligations. In general, it provides for reduced annual
Commonwealth debt service payments and for the distribution of new
GO bonds, cash, and CVIs to Assured Guaranty and other creditors.
In this case, the CVI is intended to provide creditors with
additional plan consideration tied to the outperformance of the
Puerto Rico 5.5% Sales and Use Tax (SUT) receipts against the May
2020 certified fiscal plan projections, subject to annual and
lifetime caps. To date, the SUT receipts have exceeded the May 2020
projections.
No action is required on the part of insured investors to
receive their principal and accrued interest on the bonds on which
Assured Guaranty is paying claims.
Assured Guaranty Ltd. is a publicly traded (NYSE: AGO),
Bermuda-based holding company. Through its subsidiaries, Assured
Guaranty provides credit enhancement products to the U.S. and
international public finance, infrastructure and structured finance
markets and also provides asset management services. More
information on Assured Guaranty Ltd. and its subsidiaries can be
found at AssuredGuaranty.com.
Any forward-looking statements made in this release reflect
Assured Guaranty’s current views with respect to future events and
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements involve
risks and uncertainties that may cause actual results to differ
materially from those set forth in these statements. These risks
and uncertainties include, but are not limited to, those resulting
from the failure of a Title III plan of adjustment to be confirmed
under the Puerto Rico Oversight, Management, and Economic Stability
Act on substantially the terms contemplated by the remaining plan
support agreement to which Assured Guaranty is a party and covering
other non-paying Puerto Rico exposures; the failure to reach a
resolution of remaining non-paying Puerto Rico exposures not
covered by an effective plan support agreement on terms
substantially consistent with the terms anticipated by Assured
Guaranty; future litigation, and other risks and uncertainties that
have not been identified at this time, management's response to
these factors, and other risk factors identified in Assured
Guaranty’s filings with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which are made as of March 16, 2022.
Assured Guaranty undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220316005698/en/
Robert Tucker, 212-339-0861 Senior Managing Director, Investor
Relations and Corporate Communications rtucker@agltd.com
Media: Ashweeta Durani, 212-408-6042 Vice President, Corporate
Communications adurani@agltd.com
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