Benefits for Infrastructure Investors

Both capital market investors and lending banks find added value in infrastructure financings we insure.

Investor Benefits

Timely payment:  In the rare event of an issuer’s failure to make a scheduled payment of interest or principal, Assured Guaranty will make the payment as scheduled.  There is no interruption of payment.

Professional credit underwriting and analysis: Our experienced insurance underwriters conduct extensive analysis and due diligence of complex transactions.  Because we are obligated to pay in case of default, we will not insure a transaction unless we believe an appropriate party has accepted each type of underlying risk – including all construction and operating risks.

Portfolio suitability:  Assured Guaranty’s high credit ratings may allow an investor to acquire a position for which it would otherwise lack capacity because of credit quality constraints, risk-weighted capital requirements or single- or aggregate-risk limits.

Surveillance and remediation: Our surveillance operations allow us to spot potential trouble early and take steps to protect transaction performance.  In transactions insured at issuance, we typically have rights and remedies beyond those normally available to any one investor, and we can work directly with project sponsors to solve problems.  Investors would be unaffected even if a workout were required, as we are obligated to make payments as originally scheduled.

Bank Lender Benefits

Competitive advantage:  Proposing a guaranteed structure may allow a bank to bid a lower all-in cost of financing.

Greater capacity:  Shifting the primary exposure to the guarantor may allow a bank to expand risk limits for a given borrower or class of borrowers.

Higher returns:  On a risk-weighted basis, the return on a guaranteed loan may be higher despite a lower nominal margin.