In response to the downgrade by Moody’s Investors Service of the
insurance financial strength rating of bond insurer Assured Guaranty
Corp. (AGC) to Aa3 from Aa2 and Moody’s affirmation of the Aa3 insurance
financial strength rating of Assured Guaranty Municipal Corp. (AGM),
Dominic Frederico, President and Chief Executive Officer of Assured
Guaranty Ltd. (NYSE:AGO) ("the Company”), today made the following
statement:
"We are pleased that AGC and AGM have both maintained Moody’s ratings in
the double-A rating category, a rating that connotes significant
financial strength in today’s economic environment. In assigning these
ratings, Moody’s has put our insured residential mortgage exposures
through a revised stress loss scenario, which is based on an extremely
pessimistic view of the future performance of residential mortgage
exposures. Even under Moody’s stressful scenario, the Assured companies’
combined $12.5 billion of claims-paying resources were more than
sufficient to meet all projected obligations. We are committed to
maintaining the highest possible ratings and plan to implement a capital
plan to meet rating agency requirements to maintain double-A ratings.
Moreover, these capital initiatives, which entail external reinsurance
that has already been negotiated, intercompany capital support and
approximately $300 million of additional capital, are to solely support
rating agency capital requirements. In the absence of true capital
regulation by federal or state authorities, we believe this is in the
best interests of the Company.
"In its review, Moody’s noted ‘our strong risk management, which has
contributed to much better performance than our peers during the
financial crisis’ and ‘our very strong competitive position in the U.S.
municipal market.’
"Despite the ratings uncertainty over the past few months, demand for
our guaranty products has remained strong in the U.S. municipal market,
as demonstrated by our previously announced third quarter 2009 U.S.
public finance new issue volume. The two direct bond insurers guaranteed
a total of approximately $8.7 billion in U.S. municipal new issue
volume, representing 9.6% of total par issued for the third quarter
2009. Through October 2009, both companies combined have guaranteed
approximately $32.0 billion in new issues, representing 9.5% of public
finance new issuance. We are confident that we will continue to provide
value for issuers and investors across our markets.”
End of statement
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, structured finance and
mortgage markets. More information on Assured Guaranty Ltd. and its
subsidiaries can be found at www.assuredguaranty.com.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made in this press release reflect the
current views of Assured Guaranty Ltd. (together with its subsidiaries,
"Assured Guaranty”) with respect to future events and financial
performance 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. Assured Guaranty’s
forward-looking statements could be affected by:
-
rating agency action, including a ratings downgrade at any time of
Assured Guaranty Ltd. or any its subsidiaries and/or of transactions
insured by such subsidiaries, both of which have occurred in the past;
-
developments in the world's financial and capital markets that
adversely affect issuers’ payment rates, Assured Guaranty’s loss
experience, its ability to cede exposure to reinsurers, its access to
capital, its unrealized (losses) gains on derivative financial
instruments or its investment returns;
-
changes in the credit markets, segments thereof or general economic
conditions;
-
more severe or frequent losses affecting the adequacy of Assured
Guaranty’s loss reserve;
-
the impact of market volatility on the mark-to-market of its contracts
written in credit default swap form;
-
reduction in the amount of reinsurance facultative cessions or
portfolio opportunities available to Assured Guaranty;
-
decreased demand or increased competition;
-
changes in applicable accounting policies or practices;
-
changes in applicable laws or regulation, including insurance and tax
laws;
-
other governmental actions;
-
difficulties with the execution of Assured Guaranty’s business
strategy;
-
contract cancellations;
-
Assured Guaranty’s dependence on customers;
-
loss of key personnel;
-
adverse technological developments;
-
the effects of mergers, acquisitions and divestitures;
-
natural or man-made catastrophes;
-
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 speak only as of the dates on which
they are made. 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.
