Assured Guaranty Ltd. (NYSE:AGO)(together with its subsidiaries, Assured Guaranty) released the following comments regarding the revised fiscal plans (Revised Fiscal Plans) submitted by the government of Puerto Rico, PREPA and PRASA for certification by the Financial Oversight and Management Board for Puerto Rico (Oversight Board):

Meeting PROMESA’s dual stated purpose of fiscal responsibility and restoration of the Commonwealth’s access to the capital markets has become even more critical in the aftermath of the hurricane damage in Puerto Rico. After Hurricane Maria, Assured Guaranty voluntarily withdrew its litigation challenging the legality of the original Commonwealth Fiscal Plan, in order to remove a possible distraction from the recovery effort, and because the plan would now be subject to revision. The withdrawal of this and other parties’ litigation following the hurricane created an opportunity for the Oversight Board and Puerto Rico government to reassess and chart a new course of action. This should have facilitated new engagement between the Oversight Board, the Puerto Rico government, its creditors and its residents to work toward a comprehensive, consensual plan that would prevent years of costly litigation the Puerto Rican people can ill afford.

Sadly, Puerto Rico’s authorities have squandered a critical opportunity. We appreciate the significant time and effort that goes into the development of these plans, and welcome the scrutiny of operational and organization structures that have been put forth. However, when the Oversight Board asked for revised plans in light of the hurricane damage, the government and Oversight Board should have taken the opportunity to reset the relationship with all stakeholders and produce plans that focus on recovery efforts and comply with the mandatory requirements of PROMESA, the Commonwealth Constitution, and the United States Constitution.

“Unfortunately, the Revised Fiscal Plans repeat and exacerbate flaws in the original plans,” said Dominic Frederico, President and CEO of Assured Guaranty. “Certifying such plans now would be a disservice to the American citizens of Puerto Rico, as the plans fail to focus on growing the economy and restructuring the government and its cost basis to improve efficiency and transparency. The Revised Fiscal Plans also fail to identify essential versus nonessential spending and ignore both creditors’ constitutional rights and contractual liens and covenants.

“The Oversight Board should prioritize using government resources to implement redevelopment measures focused on the immediate needs of the Puerto Rican people, many of whom remain without electric power more than four months after the hurricane, as well as following the requirements of PROMESA and abiding by the rule of law. The Revised Fiscal Plans as presented once again erode Puerto Rico’s credibility and undermine confidence in the Puerto Rico government to honor its obligations.

“If the Oversight Board certifies, and Puerto Rico implements, the Revised Fiscal Plans as proposed, it would ensure that Puerto Rico will be distracted by years of costly litigation and will eliminate access to the traditional capital markets for the foreseeable future,” continued Mr. Frederico. “But the consequences extend far beyond Puerto Rico to the entire U.S. public finance system. This disregard for creditors’ rights would shake, on a nationwide basis, investors’ confidence in the enforceability of their contracts, the rule of law and public officials’ willingness to abide by the commitments they have made. In doing so, they will make it more expensive for municipalities throughout the United States to fund essential services and infrastructure for their taxpayers.”

Collaboration on developing a fiscally sound strategy that involves all stakeholders, especially those with constitutional rights and contractual liens, and that prioritizes a detailed and substantiated reconstruction plan, would be a far better solution than certifying a non-collaborative five-year plan in which no one can have confidence because its assumptions and development are secretive. This is a government that has been unable to produce audited financial reports for fiscal years 2015, 2016 and 2017 and continues to evade current financial transparency. Nevertheless, they ask investors to accept a complete rejection of their legal rights based on unsubstantiated long-term assessments of the economic impact of the hurricane, and draconian guesses on out-migration.

The Revised Fiscal Plans are fiscally irresponsible, and ensure a continued lack of access to the traditional capital markets. Rather than force Puerto Rico to spend hundreds of millions more in litigation, advisory and Oversight Board costs for years to come, we once again urge the Commonwealth Government and Oversight Board to meaningfully engage with creditors for the benefit of Puerto Rico.

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 implementation or non-implementation of any Commonwealth fiscal plan; failure to reach a consensual settlement among creditors, the Commonwealth, the Oversight Board and other stakeholders; 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 January 25, 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.