Assured Guaranty: UK Hospital Bond
A subsidiary of Bermuda-headquartered Assured Guaranty, Assured Guaranty Europe Ltd. announced today [Jan. 9] it provided a financial guarantee with respect to a UK Private Finance Initiative [PFI] bond issue, originally issued by Worcestershire Hospital SPC Plc on March 31st 1999 to raise £97.2 million to finance the construction and operation of the Worcestershire Royal Hospital.
Assured Guaranty replaced the original guarantor, Ambac Assurance UK Limited, in order to enhance the creditworthiness of the bonds.
As the guarantor, Assured Guaranty guarantees timely payment of scheduled principal and interest to bondholders, throughout the life of the bond, which matures in 2030.
One hundred percent of the voting bondholders approved the appointment of Assured Guaranty as the new guarantor and controlling creditor.
The guarantees are being paid for by the bondholders through a reduction in the coupon on the bonds. Moody’s re-rated the bonds Aa3 based on the financial strength ratings of the Assured Guaranty guarantors, which are rated Aa3 [negative outlook] by Moody’s and AA– [stable outlook) by S&P. The consolidated Assured Guaranty group of companies has $13 billion of total claims-paying resources.
Nick Proud, CEO of Assured Guaranty Europe, commented, “This is the first infrastructure bond transaction guaranteed in Europe since the onset of the global credit crisis. It marks a very important step in bringing the capital markets back to infrastructure finance and revalidates the monoline financial guarantee model as a key part of that — enhancing creditworthiness, reducing and monitoring risks and improving capital treatment for investors, while widening market access and reducing funding costs for issuers.”
Dominic Nathan, managing director and head of infrastructure at Assured Guaranty Europe, added, “We are seeing a resurgent investor appetite for guaranteed infrastructure bonds — this is the first of a number of deals in our pipeline that we expect to close. Having survived the financial crisis with some of the highest ratings in the financial sector, Assured Guaranty is well placed to play a leading role in financing infrastructure projects in the UK and Europe at a time when the banks are retreating from long-term lending.”
Bermuda’s Assured Guaranty Ltd. together with its subsidiaries, is the leading provider of financial guarantees for principal and interest payments due on municipal, public infrastructure and structured financings.
AGL is a publicly traded (NYSE: AGO) Bermuda-based holding company. More information on AGL and its subsidiaries can be found a
