Benefits for Issuers
Issuers of asset-backed securities and other structured financings use our guaranty to make financings more efficient. We add value in a variety of ways.
Reduced cost of funds: Pricing of securities we insure reflects both the enhanced credit strength of the transaction as well as the additional benefits our guaranty provides investors.
Greater economic leverage: Compared with an uninsured execution, asset sellers may be able to reduce the amount of overcollateralization, subordinated debt, equity, cash reserves or recourse.
More diversified investor base: By providing an additional level of comfort and consolidating analysis, diligence and surveillance tasks, we attract investors who lack the resources to perform these tasks or consider the related transaction costs excessive.
Ability to work with specialized collateral and new originators: We can work with specialized collateral that is relatively less familiar to the markets and can help new asset originators obtain funding for their programs.
Streamlined execution: We have extensive experience with the rating agency process, and our analytic and diligence requirements provide a framework for presenting material to the agencies. For repeat issuers, our guaranty helps to simplify and standardize transactions, allowing cost efficiencies and the ability to come to market quickly when conditions are favorable.
Ability to execute waivers and amendments: Without a designated controlling party, trustees may have less flexibility to address requests for waivers or amendments constructively, even when they are in the best interests of investors as well as the issuer. In such situations, achieving consensus among multiple bondholders may be impossible. In contrast, Assured Guaranty can identify problems early through our monitoring process and, as control party, work with issuers before problems become irreversible.