Puerto Rico HTA Bankruptcy Exit Reduces Assured Guaranty’s Insured Puerto Rico Exposure by $711 Million; Assured Guaranty Continues to Protect Insured Bondholders

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.