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Assured Guaranty Joins PREPA Restructuring Support Agreement

May 3, 2019

HAMILTON, Bermuda--(BUSINESS WIRE)--May 3, 2019--Bond insurance subsidiaries of Assured Guaranty Ltd. (NYSE:AGO) (together with its subsidiaries, Assured Guaranty) have entered into a restructuring support agreement (RSA) with the Puerto Rico Electric Power Authority (PREPA) and other stakeholders, including a group of uninsured PREPA bondholders, the Commonwealth of Puerto Rico, and the Financial Oversight and Management Board for Puerto Rico (FOMB). Assured Guaranty signed on to the agreement after negotiating amendments to a preliminary agreement announced in July 2018 by a number of the other parties.

The restructuring transaction described in the RSA is intended to, among other things, provide a framework for the consensual resolution of the treatment of Assured Guaranty’s insured PREPA revenue bonds in PREPA’s recovery plan. Upon consummation of the restructuring transaction, PREPA’s revenue bonds will be exchanged into new securitization bonds issued by a special purpose corporation and secured by a segregated transition charge assessed on electricity bills.

The closing of the restructuring transaction is subject to a number of conditions, including approval by the Title III Court of the RSA and settlement described therein, a minimum of 67% support of voting bondholders for a plan of adjustment that includes this proposed treatment of PREPA revenue bonds and confirmation of such plan by the Title III court, and execution of acceptable documentation and legal opinions. Under the RSA, Assured Guaranty has the option to guarantee its allocated share of the securitization exchange bonds, which may then be offered and sold in the capital markets. Assured Guaranty believes that the additive value created by attaching its guarantee to the securitization exchange bonds would materially improve its overall recovery under the transaction, as well as generate new insurance premiums; and therefore its economic results will differ from those reflected in the RSA.

“We have long made the case that the solution to Puerto Rico’s difficulties is through consensual settlements,” said Dominic Frederico, President and CEO of Assured Guaranty. “This settlement builds on the work that successfully produced an earlier version of an RSA for PREPA, before the enactment of PROMESA in 2016. Today, we are pleased to have reached a settlement with the Oversight Board, the Commonwealth, and other bondholders with regard to PREPA, and we believe the restructuring transaction outlined in this new RSA can be the foundation for an effective, consensual plan that assures reliable, affordable electric power for the people of Puerto Rico. We are committed to continue working cooperatively with PREPA and other stakeholders to implement such a plan.”

Investors in PREPA bonds insured by Assured Guaranty are protected by its unconditional guaranty of full and timely payment of principal and interest in accordance with the terms of Assured Guaranty’s insurance policies.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this press 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 adverse developments in Puerto Rico or at PREPA, an inability or failure of creditors to negotiate and implement a consensual restructuring, litigation that has already been initiated or may be initiated in the future, governmental or legislative action or inaction by Puerto Rico or the United States, 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 May 3, 2019. 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.

Assured Guaranty Ltd. is a publicly traded Bermuda-based holding company. Its operating subsidiaries provide credit enhancement products to the U.S. and international public finance, infrastructure and structured finance markets. More information on Assured Guaranty Ltd. and its subsidiaries can be found at AssuredGuaranty.com.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190503005550/en/

CONTACT: Assured Guaranty Ltd.

Robert Tucker, 212-339-0861

Managing Director, Investor Relations and Corporate Communicationsrtucker@assuredguaranty.comMedia:

Ashweeta Durani, 212-408-6042

Vice President, Corporate Communicationsadurani@assuredguaranty.com

KEYWORD: UNITED STATES BERMUDA NORTH AMERICA CARIBBEAN PUERTO RICO NEW YORK

INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE INSURANCE

SOURCE: Assured Guaranty Ltd.

Copyright Business Wire 2019.

PUB: 05/03/2019 07:20 PM/DISC: 05/03/2019 07:20 PM

http://www.businesswire.com/news/home/20190503005550/en