Market Overview

Assured Guaranty Joins Agreement Between Senior and Subordinate COFINA Bondholders


Assured Guaranty Municipal Corp. (AGM), a municipal bond insurance
subsidiary of Assured Guaranty Ltd. (NYSE:AGO), has agreed to terms for
a restructuring support agreement (RSA) resolving how Puerto Rico sales
and use tax (SUT) revenues will be divided between the holders of senior
and subordinate bonds issued by the Puerto Rico Sales Tax Financing
Corporation (COFINA by its Spanish acronym) and secured by the SUT.

The agreement applies to the SUT revenues allocated to COFINA under a
previous agreement between the court-appointed agents for COFINA and the
Commonwealth. The RSA is supported by senior and subordinate COFINA
creditors, including AGM, representing a total of approximately $10
billion of COFINA debt, and by the Commonwealth of Puerto Rico and the
Financial Oversight and Management Board for Puerto Rico (Oversight

Both senior and subordinate COFINA creditors will exchange their
positions for new senior closed lien COFINA bonds. Implied recoveries,
including fees for parties to the RSA, will be in the mid-90% range for
the senior bonds and approach 60% for the subordinate bonds. AGM expects
to wrap its share of the new senior lien exchange bonds, which will be
offered and sold in the public capital markets. As the insurer of $273
million of outstanding subordinate COFINA bonds, AGM believes the
additive value created by attaching its insurance policy to its
allocated exchange bonds will materially improve its overall recovery
well above 60% and create new insurance premium for the Company.

Assured Guaranty is reserving all of its rights as a Puerto Rico general
obligation bondholder with respect to both the SUT revenues allocated to
the Commonwealth and other available resources of the Commonwealth.
Under the Puerto Rico constitution, such revenues and resources must be
used to pay general obligation debt before any other claim, debt or
expense, including government expenses.

Dominic Frederico, President and CEO of Assured Guaranty Ltd., said:

This agreement among COFINA bondholders is an important step towards
achieving a consensual plan of adjustment for a significant portion of
Puerto Rico's debt. For Assured Guaranty and other junior bondholders,
the agreed terms represent a significantly better recovery when compared
with recent market prices. Additionally, subordinated COFINA exposures
will be converted to senior obligations that have investment grade
characteristics and will be protected from dilutive issuance of
additional senior bonds.

Importantly, senior COFINA holders should see nearly full recoveries. It
follows that high levels of recovery are achievable for senior bonds of
other Puerto Rico credits, which constitute the bulk of our insured
Puerto Rico exposure. This is especially true and appropriate for
general obligation bonds, Puerto Rico's highest seniority debt, which
are protected by the Commonwealth's Constitution and PROMESA.

We applaud this constructive exchange led by the mediation team and the
various parties involved. While there is still an irrefutable need to
improve financial disclosure and implement operational and process
reforms, the resolution of the treatment of the COFINA bonds clears a
path for other Puerto Rico bond restructurings.

We welcome further discussions to achieve a consensual and comprehensive
resolution that respects creditors' rights, avoids further unnecessary
and costly Commonwealth litigation costs – already in the millions of
dollars since PROMESA began – and allows Puerto Rico to access the
capital markets and revitalize its economy. We believe this announcement
is a step in the right direction that potentially begins to unwind
Puerto Rico's steadily increasing legal exposure and costs.

About Assured Guaranty

Assured Guaranty Ltd. is a publicly traded (NYSE:AGO) 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

Any forward-looking statements made in this statement 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 the failure of a
Title III plan of adjustment based on the terms of the RSA to be
confirmed under PROMESA; 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 August 9, 2018. 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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