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Assured Guaranty Says Strongly Disagree With Einhorn's Assertions; Stock Drops


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(RTTNews.com) - Responding to a short-sale presentation made by David Einhorn of Greenlight Capital, Assured Guaranty Ltd. ( AGO ) said Monday that Einhorn's analysis of the company fails to acknowledge the positive implications of its significant financial strength and strong operating performance, and demonstrateda fundamental lack of understanding of its business model and the municipal debt markets. In the event of a municipal default, Assured Guaranty is obligated to cover shortfalls in scheduled principal and interest payments only when those payments are due. Assured Guaranty said it strongly disagree with Einhorn's assertions. It remains focused on continuing to generate long-term value for its shareholders.

AGO closed Monday's regular trading at $35.93, down $0.77 or 2.10%. In the after-hours trade, the stock further dropped $2.13 or 5.93%.

Assured Guaranty stated that its insurance policies do not permit acceleration of payments without its consent. Einhorn's focus on total debt service ignores this lack of acceleration, as well as the strength of balance sheet, and the highly liquid nature of investment portfolio, which generates significant investment income over time.

Furthermore, Assured Guaranty said it is well reserved for its municipal exposures and, due to the non-acceleration feature, does not face liquidity risks. The company has $11.5 billion of cash and investments with $2.8 billion of estimated excess capital over S&P's AAA level. In addition, we have strong legal rights, including for Puerto Rico under PROMESA, which requires that fiscal plans must respect contractual liens and constitutional priorities established under Commonwealth law.


Read the original article on RTTNews (http://www.rttnews.com/2885051/assured-guaranty-says-strongly-disagree-with-einhorn-s-assertions-stock-drops.aspx)


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This article appears in: Stocks , Insurance , Politics
Referenced Symbols: AGO


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