Assured Guaranty issues debt service reserve guarantee to replace Yorkshire Water liquidity facilities

LONDON–(BUSINESS WIRE)–Assured Guaranty UK Limited (AGUK)* has announced that it has issued a £170 million five-year debt service reserve (DSR) guarantee to Yorkshire Water Services Limited, a member of the Yorkshire Water Group . The DSR collateral provided by AGUK, which are rated AA by S&P Global Ratings and A1 by Moody’s Investors Service, will replace the existing liquidity facility provided by banks within the Yorkshire Water Group securitization structure.

AGUK’s DSR Guarantee has been structured to fit Yorkshire Water Services Limited’s existing securitization documents and covers certain senior payment obligations owed to bondholders and other senior creditors.

AGUK is a subsidiary of Assured Guaranty Ltd. (together with its subsidiaries, Assured Guaranty), the only financial guarantee company currently providing financial guarantees in the UK and European financial markets. In addition to guaranteeing the timely payment of principal and interest on bonds, Assured Guaranty provides guarantees for other debt service obligations of borrowers in the infrastructure and utilities sectors.

Dominic Nathan, Senior Managing Director, AGUK, commented:

“Our Debt Service Reserve Guarantee provides a cost-effective and competitive alternative to bank facilities for large UK water and sewerage companies. As this transaction demonstrates, it fits well into an established corporate securitization structure. We are delighted to have supplied this product to Yorkshire Water and hope that other businesses will also see the benefits of this type of financial security from Assured Guaranty. Our strong credit rating and proven stability for over three decades are reason to believe that the DSR guarantee will be available for the long term without having to be renewed every year in the banking market.

David Gregg, Head of Corporate Finance, Yorkshire Water, said:

“Yorkshire Water welcomed the opportunity to work with Assured Guaranty on the Debt Service Reserve Guarantee to be able to ensure an appropriate fit with our existing financing terms. The successful outcome reflects a collaborative approach providing a longer term solution to meeting DSR requirements which is beneficial to the group and in the best interest of Yorkshire Water’s customers.

Yorkshire Water is the fifth largest water and wastewater company in the UK, both in terms of value of regulatory capital and customers served. It provides its services to around 2 million homes and 140,000 business premises in the North of England.

Assured Guaranty’s advisors on the transaction were Allen & Overy LLP. Yorkshire Water was advised by Centrus and Linklaters LLP.

IMPORTANT NOTICE

All titles have been sold, and this announcement is for informational purposes only. This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended (“Securities Act”), or with any securities regulator of any state or jurisdiction in the United States, and may not be offered, sold or transferred, directly or indirectly, in the United States absent registration under the Securities Act or an available exemption, or in connection with a transaction not subject to the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States.

* AGUK (company number 2510099) is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. AGUK provides its financial guarantee as well as a co-guarantee from its subsidiary Assured Guaranty Municipal Corp. (AGM). AGUK and AGM are both subsidiaries of Assured Guaranty Ltd. (AGL and, with its subsidiaries, Assured Guaranty). Through its subsidiaries, Assured Guaranty provides credit enhancement products to the US and international public finance, infrastructure and structured finance markets, as well as asset management services. AGL is a publicly traded holding company (NYSE: AGO) based in Bermuda. For more information about AGL and its affiliates, visit AssuredGuaranty.com.

Caution Regarding Forward-Looking Statements:

All forward-looking statements made in this press release 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. differ materially from those set forth in these statements. These risks and uncertainties include, but are not limited to, those resulting from Assured Guaranty’s inability to execute its strategies; demand for financial guarantees from Assured Guaranty, including DSR guarantees; the continued availability of the DSR guarantee; the relative merits of DSR guarantees and bank facilities for enterprise-wide securitization structures; actions rating agencies may take regarding Assured Guaranty’s financial strength ratings; adverse developments in Assured Guaranty’s guaranteed portfolio; and other risks and uncertainties which have not been identified to date, management’s response to these factors and other risk factors identified in AGL’s filings with the U.S. Securities and Exchange Commission United. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of March 28, 2022. 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.

Comments are closed.