Assured Guaranty Municipal Insures Another $800 Million for JFK International Airport’s New Terminal One Project

Rhea-AI Summary

Assured Guaranty Municipal (AGM) has insured $800 million of senior Special Facilities Revenue Bonds for JFK International Airport's New Terminal One project. This marks AGM's second involvement within seven months, following a similar issuance in December 2023. The bonds, part of a $2.55 billion Series 2024 issue, were issued on June 27. AGM's total insured bonds now amount to $1.6 billion out of JFK NTO's $4.55 billion total bonds issued to date. The bonds will fully amortize post an initial interest-only period, maturing in 2060. This reflects AGM's significant commitment and capability to provide cost savings in large, complex public-private partnership projects.

Positive

• AGM has insured $800 million of bonds for JFK NTO, demonstrating significant involvement in a major U.S. public-private partnership project.
• The total insured bonds by AGM for JFK NTO now stands at $1.6 billion.
• The bonds will be fully amortizing, with a final maturity in 2060, indicating a long-term financial commitment.

Negative

• The bonds will be interest-only for an initial period, potentially posing short-term financial risks before full amortization begins.

Insights

Financial Analyst

Assured Guaranty Municipal's (AGM) insurance of another $800 million in bonds for the JFK International Airport’s New Terminal One project is significant for several reasons. First, it showcases AGM’s confidence and capacity in managing large-scale infrastructure finance projects. By insuring a large portion of the $2.55 billion bond issuance, AGM provides credit enhancement, which helps reduce the cost of borrowing for the New Terminal One consortium. Investors should note that this move substantially mitigates risk, enhancing the attractiveness of the bonds.

From a financial perspective, the successful issuance indicates strong market confidence in both AGM and the JFK NTO project. The bonds' final maturity in 2060 suggests a long-term commitment and confidence in the project's longevity and revenue-generating capability. For retail investors, it’s essential to understand that insured bonds typically offer lower yields due to the reduced risk, but the credit enhancement can lead to more stable returns.

While AGM’s participation in such a large-scale project could boost its reputation and market share, retail investors should remain cautious about the long timeline and the inherent risks in large infrastructure projects, such as construction delays or unforeseen economic conditions. The rating agencies' stance on these bonds will be an essential metric to watch.

Market Research Analyst

The involvement of Assured Guaranty Municipal (AGM) in the JFK New Terminal One project highlights a significant trend in the public-private partnership (PPP) market. PPPs are increasingly being used to fund large infrastructure projects, sharing the risk between public entities and private firms. AGM’s commitment underscores the increasing role of private capital in public infrastructure development. This is particularly noteworthy given the project's scale, being the largest PPP transportation project in the U.S.

For investors, this indicates a broader market opportunity. The successful issuance of these bonds suggests robust demand and confidence in using PPPs to address infrastructure needs. This trend may create more investment opportunities in similar projects, particularly in sectors like transportation and utilities. However, investors should remain aware of the cyclical nature of infrastructure investments and the potential for regulatory changes that could impact the financial landscape of such projects.

Understanding the dynamics of PPPs is crucial. They provide potential benefits like improved efficiency and cost savings but come with challenges like complex contract structures and long-term financial commitments. Retail investors should evaluate the stability and financial health of the companies involved, both public and private, to assess the projects' potential success.

Insured Bonds are Part of a $2.55 Billion Issue

NEW YORK--(BUSINESS WIRE)-- Assured Guaranty Municipal Corp. (AGM)* has, for the second time, insured $800 million of senior Special Facilities Revenue Bonds issued by the New York Transportation Development Corporation on behalf of JFK New Terminal One (JFK NTO), a consortium comprising Ferrovial Airports, JLC Infrastructure, Ullico Infrastructure Fund and Carlyle Group. Following a successful, similar December 2023 bond issuance, the insured bonds were issued on June 27 as part of a $2.55 billion Series 2024 issue of fixed-rate bonds. This increases AGM-insured bonds to an aggregate of $1.6 billion out of the $4.55 billion of bonds issued to date by JFK NTO.

Lorne Potash, Managing Director, Infrastructure Finance, Americas commented, “For the second time in less than seven months, Assured Guaranty’s bond insurance on $800 million of bonds once again helped the issuer achieve a highly successful execution. The 2023 and 2024 insured issues together represent the largest commitment Assured Guaranty has to a single public-private partnership credit. We are the only bond insurer with the experience, scale and financial strength to provide meaningful cost savings for issues of this size and complexity.”

“JFK NTO is the largest public-private partnership transportation project in the United States, and we are pleased to be a part of the team that brought this investment grade and highly essential project to its second successful bond execution,” said Sam Nakhleh, Director, Infrastructure Finance, Americas.

The bonds will be fully amortizing after an initial interest-only period, with a final maturity in 2060. AGM insured $14,290,000 of serial bonds due 2039; $32,715,000 of serial bonds due 2042; $145,000,000 of term bonds due 2049; $184,845,000 and $48,150,000 of term bonds due in 2054; and $375,000,000 of term bonds due 2060.

BofA Securities and Loop Capital Markets served as co-bookrunners and Barclays as co-senior manager. Hogan Lovells acted as legal advisor to AGM.

IMPORTANT NOTICE

All of the securities having been sold, this announcement is for information 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 regulatory authority of any state or jurisdiction of 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 from, or in 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.

*AGM is a subsidiary of Assured Guaranty Ltd. (AGL and, together with its subsidiaries, Assured Guaranty). Through its subsidiaries, Assured Guaranty provides credit enhancement products to the U.S. and non-U.S. public finance, infrastructure and structured finance markets. Assured Guaranty also participates in the asset management business through its ownership interest in Sound Point Capital Management, LP and related entities. AGL is a publicly traded (NYSE: AGO) Bermuda-based holding company. More information on AGL and its subsidiaries can be found at AssuredGuaranty.com.

Cautionary Statement Regarding Forward-Looking Statements:

Any forward-looking statements made in this press release reflect Assured Guaranty’s current views 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, difficulties executing Assured Guaranty’s business strategy; the demand for Assured Guaranty’s financial guarantees; actions that the rating agencies may take with respect to Assured Guaranty’s financial strength ratings; adverse developments in Assured Guaranty’s guaranteed portfolio; 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 June 27, 2024. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240627862838/en/

Robert Tucker, 212-339-0861

Senior Managing Director, Investor Relations and Corporate Communications

rtucker@assuredguaranty.com

Media:

Ashweeta Durani, 212-408-6042

Director, Corporate Communications

adurani@assuredguaranty.com

Source: Assured Guaranty Ltd.

FAQ

What is the latest bond insurance deal by Assured Guaranty Municipal (AGM)?

AGM has insured $800 million of senior Special Facilities Revenue Bonds for JFK International Airport's New Terminal One project.

When were the latest bonds insured by AGM issued?

The latest bonds insured by AGM were issued on June 27, 2024.

What is the total amount of bonds insured by AGM for JFK NTO?

AGM has insured a total of $1.6 billion of bonds for JFK NTO.

What is the maturity date of the insured bonds for JFK NTO?

The insured bonds for JFK NTO will mature in 2060.

Which financial institutions were involved in the latest bond issuance for JFK NTO?

BofA Securities and Loop Capital Markets served as co-bookrunners, and Barclays acted as co-senior manager for the bond issuance.