HAMILTON, Bermuda--(BUSINESS WIRE)--Assured Guaranty Municipal Corp. (AGM), a bond insurance subsidiary of Assured Guaranty Ltd. (NYSE:AGO) (together with its subsidiaries, Assured Guaranty) and other parties to the Restructuring Support Agreement (RSA) with the Puerto Rico Electric Power Authority (PREPA) have agreed to purchase new interest-bearing bonds from PREPA to help fund the full payment of principal and interest due on July 1, 2016 to PREPA bondholders. The parties to the RSA also have agreed to extend the RSA to December 15, 2016.
Assured Guaranty will purchase a total of $25.8 million of PREPA bonds, with a 7.5% coupon, maturing on January 1 and July 1, 2020. Upon finalization of the PREPA restructuring transaction, these bonds will be supported by securitization bonds contemplated by the RSA.
In aggregate, the parties to the bond purchase agreement will purchase a total of $263.8 million of new bonds. PREPA’s total amount of principal and interest coming due on all its outstanding bonds July 1, 2016 is $416.7 million.
Bondholders insured by Assured Guaranty will receive their full July 1, 2016 debt service payments of $41.4 million.
“This interim solution facilitates the payment by PREPA of the principal and interest payments due July 1, allowing the parties time to continue down the path of the permanent, consensual restructuring envisioned in the Restructuring Support Agreement,” said Dominic Frederico, President and CEO. “Regardless of future developments, debt service payments to holders of Assured Guaranty-insured PREPA bonds remain protected by our guaranty and substantial claims-paying resources.”
Investors in Puerto Rico 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, as are all Assured Guaranty-insured bondholders.
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 June 30, 2016. 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.