Financial Guarantors Object to Flawed Amended Commonwealth Plan Support Agreement

NEW YORK, Feb. 10, 2020 (GLOBE NEWSWIRE) -- Financial Guarantors, including Ambac Financial Group, Inc. (NYSE: AMBC), Assured Guaranty Municipal Corp. and Assured Guaranty Corp., subsidiaries of Assured Guaranty Ltd. (NYSE: AGO), National Public Finance Guarantee, a wholly owned subsidiary of MBIA Inc. (NYSE: MBI), and Financial Guaranty Insurance Company (“FGIC”) jointly issued the following statement objecting to what they believe is a flawed Amended Commonwealth Plan Support Agreement disclosed by the Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”):

We believe the recently-released Amended Commonwealth Plan Support Agreement (“PSA”) is counterproductive to an orderly restructuring of Puerto Rico’s debt obligations and risks embroiling Puerto Rico in many more years of protracted litigation at significant cost to tax payers and potentially compromises Puerto Rico’s future access to the capital markets. The PSA is the product of a flawed process - a process in which the Oversight Board did not meaningfully engage with the parties to this statement, despite the Financial Guarantors being the largest creditors and longest serving financial supporters of Puerto Rico. The PSA is yet another untested and unsupportable legal experiment by the Oversight Board, which undermines negotiation of a consensual restructuring.

Furthermore, the PSA fails to respect lawful creditor rights, priorities and liens, in violation of the Puerto Rico Oversight Management Economic Stability Act (“PROMESA”), and in particular openly disregards basic constitutional protections, fiscal plan requirements, and obligations with respect to both general obligation and revenue bonds, both critical instruments of municipal finance in Puerto Rico and nationally. The PSA also is predicated on inaccurate and incomplete information relating to Puerto Rico’s economy, cash balances, federal funding, revenue projections and debt capacity. The primary beneficiaries and architects of the PSA are hedge funds, having shaken bonds from the hands of retail and long-term supporters and bondholders of Puerto Rico (many of which are on-island retirees) at pennies on the dollar. The Legislative Assembly of Puerto Rico and Governor Vasquez should not support the PSA, as it will mire the island in litigation and in all likelihood result in an exclusion from much needed infrastructure development capital for decades to come.