Assured Guaranty Responds to Puerto Rico’s Revised Fiscal Plans Submitted April 5, 2018
April 10, 2018
Dominic Frederico, President and CEO of Assured Guaranty Ltd. (NYSE:AGO)(together with its subsidiaries, Assured Guaranty), released the following statement in response to the latest revised Fiscal Plans submitted by the government of Puerto Rico, Puerto Rico Electric Power Authority (PREPA) and the Puerto Rico Aqueduct and Sewer Authority (PRASA) by the Financial Oversight and Management Board for Puerto Rico (Oversight Board):
We once again urge the Puerto Rican Government and Oversight Board to meaningfully engage with creditors for the benefit of Puerto Rico. Not having a dialogue with investors that provided funds to build the island’s schools, airports, hospitals and roads - a dialogue U.S. Congressman and Natural Resources Committee Chairman Rob Bishop emphasizes is essential in his recent letter to the Oversight Board - erodes trust and is harmful to Puerto Rico’s future access to capital markets.
Recent statements by the Governor trumpeting his administration’s compliance with the rule of law only serve to undermine the credibility of the Puerto Rico Government and are a disservice to the Puerto Rican people. When the Governor says that Puerto Rico is a jurisdiction of law and order, he needs to demonstrate support for those principles through action and full transparency. What is contained in the latest Fiscal Plans does not comply with the Puerto Rico constitution, which is clear that G.O. bonds have a first payment priority, or with PROMESA, which requires that Fiscal Plans respect the debt payment priorities and liens established under Puerto Rico law.
How can a government that has been unable to produce audited financial statements since 2014 and that is unwilling to share the financial models and other data used to support the assumptions underpinning its Fiscal Plans, expect the people of Puerto Rico, the Oversight Board or its creditors to trust that they are at all accurate in their six year Fiscal Plan forecast?
The current Fiscal Plans and the Governor’s recent statements are not backed up by facts.
Meanwhile, included in the Fiscal Plans are over a billion dollars allocated to unnecessary litigation and related expenses – expenses that could be avoided by working together with creditors and other stakeholders to develop a realistic plan for Puerto Rico’s future.
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 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 April 10, 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.