Assured Guaranty Respond To S&P
In response to the change by Standard & Poor’s Ratings Services (S&P) of the financial strength ratings of bond insurers Assured Guaranty Corp. and Assured Guaranty Municipal Corp. from AA+ Negative Outlook to AA+ CreditWatch Negative, and the AA Negative Outlook rating of Assured Guaranty Re Ltd. to AA CreditWatch Negative, Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Ltd. made the following statement:
This action is a result of S&P’s new criteria for determining the financial strength ratings of financial guaranty companies. Despite our continued objections to the new criteria, we will continue to implement our strategies to create additional rating agency capital and reduce leverage to satisfy S&P’s new requirements.
These include our residential mortgage-backed securities representation and warranty putback program and negotiated comprehensive agreements; our capital-accretive reinsurance commutations; our agreements to terminate existing insurance contracts; and our wrapped bond purchase program.
We believe, and S&P has confirmed in today’s announcement, that these programs, supplemented by reinsurance or other risk-sharing vehicles, should satisfy the requirements of S&P’s new criteria to retain our rating in the AA ratings category. We have no current plans to raise equity capital to satisfy the new S&P rating criteria.
