Assured Guaranty Reaches RMBS Settlement with UBS
Loss Sharing Agreement Supplements $358 Million Cash Payment to Bond Insurer
HAMILTON, Bermuda -- May 06, 2013
Assured Guaranty Ltd. (NYSE:AGO) (AGL and, together with its subsidiaries,
Assured Guaranty or the Company) announced today that it has reached a
settlement with UBS resolving Assured Guaranty’s claims related to specified
residential mortgage-backed securities (RMBS) transactions that were issued,
underwritten or sponsored by UBS and insured by Assured Guaranty under
financial guaranty insurance policies.
Under the settlement, Assured Guaranty will receive an initial cash payment of
$358 million. Additionally, UBS will reimburse Assured Guaranty for a portion
of all future losses on certain transactions under a collateralized
loss-sharing reinsurance agreement to be put in place by the third quarter of
2013. This settlement resolves all RMBS claims that the Company has asserted
against UBS, including those that have been in litigation.
“We are pleased to have reached a settlement with UBS that further reduces our
exposure to RMBS losses,” said Dominic Frederico, President and Chief
Executive Officer. “UBS represents the third financial institution with which
we have reached a major settlement since 2011. This settlement further
strengthens our balance sheet by providing a substantial cash payment and
certainty related to the loss-sharing arrangement on future claims. We have
now reached favorable settlements or been awarded compensation in court with
respect to approximately 55% of the par outstanding of Assured Guaranty’s
troubled legacy RMBS.”
The financial impact of the settlement and other related information will be
described in Assured Guaranty’s first quarter earnings press release, which is
scheduled to be released on May9,2013.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made herein reflect the current views of
Assured Guaranty 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, the failure of UBS to
make payments or establish the reinsurance arrangements in accordance with the
terms of the agreement 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 May 6, 2013. 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.
Assured Guaranty Ltd. is a publicly traded 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 and its subsidiaries can be found at
Assured Guaranty Ltd.
Robert Tucker, 212-339-0861
Managing Director, Investor Relations and Corporate Communications
Ashweeta Durani, 212-408-6042
Vice President, Corporate Communications
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