On December 6, 2022, the Modified Fifth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation Authority (the HTA Plan) went into effect, marking the exit of the Puerto Rico Highways and Transportation Authority (HTA) from bankruptcy under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). Under the HTA Plan, Assured Guaranty Municipal Corp. (AGM) and Assured Guaranty Corp. (AGC), two bond insurance subsidiaries of Assured Guaranty Ltd. (NYSE: AGO) (together with its subsidiaries, Assured Guaranty) resolved their exposure to the HTA bonds that each had insured.

In connection with the HTA Plan, Assured Guaranty has received approximately $104 million of cash and $807 million* in par of new bonds backed by toll revenues (Toll Bonds). Additionally, in third quarter 2022, as part of the GO/PBA Plan of Adjustment, Assured Guaranty received, in connection with the HTA Plan Support Agreement, $147 million of cash and $672 million original notional amount of contingent value instruments.

Also, as part of HTA’s bankruptcy exit, Assured Guaranty paid off holders of certain HTA bonds insured by AGM and AGC (Assured Insured HTA Bonds) and established trusts for holders of other Assured Insured HTA Bonds. Specifically, Assured Guaranty paid 100% of the principal amount outstanding, plus accrued interest thereon, to holders of certain Assured Insured HTA Bonds representing $711 million in insured net par. Certain other Assured Insured HTA Bonds, whose holders made certain elections and that represented $451 million in insured net par, were exchanged for new custodial trust units (Trust Units) that represent an interest in the legacy insurance policy plus Toll Bonds. No action is required on the part of bondholders to receive such payments and/or Trust Units. Additional bondholder-related information can be found in our Company Statement.

“The HTA’s exit from bankruptcy is another important step forward for Puerto Rico,” said Dominic Frederico, President and CEO of Assured Guaranty. “It also eliminates $711 million net par from Assured Guaranty’s insured Puerto Rico exposure. Together with certain other Puerto Rico settlements that went into effect this past March, we’ve reduced our insured Puerto Rico exposure in 2022 by more than $2 billion.

“While the HTA bankruptcy has taken many turns over the past several years, the benefits of our insurance to holders of Assured Insured HTA Bonds have remained constant. Up until the effective date, we’ve paid almost $700 million in principal and interest to investors in our insured HTA bonds while holders of uninsured HTA bonds have received nothing. Under the HTA Plan that went into effect December 6th, investors in Assured Insured HTA Bonds received either a cash payment (equal to 100% of their principal amount outstanding plus accrued interest) or new Trust Units that continue to benefit from the related insurance policies plus have an interest in new Toll Bonds, while uninsured bondholders received plan consideration totaling considerably less than 100% of their principal amount outstanding.

“Assured Guaranty’s only remaining non-paying Puerto Rico exposure is the Puerto Rico Electric Power Authority (PREPA). As with the HTA and other Puerto Rico entities, we prefer to resolve PREPA’s debt restructuring consensually and remain open to doing so. That said, the PREPA bonds have robust creditor protections, and we’ll continue defending our rights in court as necessary.”

*Represents the face value of current interest bonds and the maturity value of capital appreciation and convertible capital appreciation bonds.

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 relating to the value and liquidity of new HTA bonds and contingent value instruments received in connection with the effectiveness of the HTA Plan; the failure to reach a resolution of PREPA 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 December 9, 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.

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