Assured Guaranty Ltd. · NYSE:AGO
Assured Guaranty — Debt Investor Presentation (September 2024)
54 slides from Assured Guaranty's debt investor presentation, Sep 30, 2024
Slide 1: Fixed Income Investor Presentation
Fixed Income Investor Presentation September 30, 2024
Slide 2: Table of Contents
Table of Contents Page Forward-Looking Statements and Safe Harbor Disclosure 3 Conventions and Non-GAAP Financial Measures 4 Assured Guaranty Overview 5 New Business Activity 18 Asset Management and Alternative Investments 25 Assured Guaranty Insured Portfolio 27 AG Insured Portfolio 40 AGUK, AGE, A
Slide 3: Forward-Looking Statements and Safe Harbor Disclosure
Forward-Looking Statements and Safe Harbor Disclosure • This presentation contains information that includes or is based upon forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements give the expectations or forecasts of future
Slide 4: Conventions and Non-GAAP Financial Measures
Conventions and Non-GAAP Financial Measures • Unless otherwise noted, the following conventions are used in this presentation: – Ratings on Assured Guaranty’s insured portfolio are Assured Guaranty’s internal ratings. ▪ Internal credit ratings are expressed on a ratings scale similar to that used by
Slide 5: Assured Guaranty Overview
ASSURED GUARANTY Assured Guaranty Overview
Slide 6: Overview
Assured Guaranty Overview • Assured Guaranty Ltd. (“AGL” and, together with its subsidiaries, “Assured Guaranty” or the “Company”) is the leading financial guaranty franchise – We are the only long-standing financial guaranty company to have written new business throughout the 2008 financial crisis
Slide 7: Financial Guaranty Business Model
Assured Guaranty Overview Financial Guaranty Business Model • What do we insure? – We insure financial products in three main sectors ▪ U.S. public finance and infrastructure transactions ▪ Non-U.S.public finance and infrastructure transactions ▪ U.S. and non-U.S. structured finance transactions (gl
Slide 8: Financial Guaranty Business Model (Continued)
Assured Guaranty Overview Financial Guaranty Business Model (Continued) • How does Assured Guaranty’s policy benefit investors? – Our policy benefits investors because we provide credit selection, underwriting, surveillance and remediation, in addition to timely payment of scheduled principal and in
Slide 9: Resilience and Enduring Financial Strength
Assured Guaranty Overview Resilience and Enduring Financial Strength Assured Guaranty maintained over $10 billion of claims-paying resources1 over 16 years while paying nearly $15 billion to insured investors From January 1, 2008 through $16 As of Dec. 31 of each year, except 2024, which is as of Se
Slide 10: Insurance Subsidiaries' Claims-Paying Resources
Assured Guaranty Overview Insurance Subsidiaries’ Claims-Paying Resources As of September 30, 2024 ($ in millions) AG AG Re6 Eliminations2 Total Claims-paying resources Policyholders' surplus $ 3,644 $ 770 $ 61 $ 4,475 Contingency reserve 1,374 — — 1,374 Qualified statutory capital 5,018 770 61 5,84
Slide 11: AGM Merger Into AG
Assured Guaranty Overview AGM Merger Into AG • Assured Guaranty Municipal Corp. (AGM) merged with and into Assured Guaranty Inc. (AG), effective August 1, 2024 • Some of the benefits of the merger include: – Created a larger, combined company to guarantee all the obligations in both the AGM and AG i
Slide 12: Assured Guaranty Ltd. Corporate Structure (Pre-Merger)
Assured Guaranty Overview Assured Guaranty Ltd. Corporate Structure (Pre-Merger) Assured Guaranty Ltd. Hamilton, Bermuda Publicly Traded Holding Company (NYSE: AGO) A (stable outlook) / Baa1 (stable outlook) issuer credit ratings Assured Guaranty US Holdings Inc. (AGUS) U.S. Holding Company S&P: A (
Slide 13: Assured Guaranty Ltd. Corporate Structure (Current)
Assured Guaranty Overview Assured Guaranty Ltd. Corporate Structure (Current) Assured Guaranty Ltd. Hamilton, Bermuda Publicly Traded Holding Company (NYSE: AGO) A (stable outlook) / Baa1 (stable outlook) issuer credit ratings Assured Guaranty US Holdings Inc. (AGUS) Assured Guaranty Re Ltd. (AG Re)
Slide 14: Principal Insurance Platforms
Assured Guaranty Overview Principal Insurance Platforms • AG, AGUK and AGE operate as three separate financial guaranty platforms, with AG Re operating as a reinsurer – AG focuses on insuring U.S. public finance, infrastructure and structured finance transactions – AGUK serves the U.K. market and ce
Slide 15: Changes Since 2009
Assured Guaranty Overview Changes Since 2009 Claims-Paying Resources Insured Leverage ($ in billions) 71.3x 70.5x $13.2 $13.2 $12.8 $12.8 $12.6 $12.6 $12.7 $12.1 $12.1 $11.9 62.9x $11.4 58.9x $11.1 $11.2 $10.8 $10.7 $10.4 52.7x 47.4x 46.7x 46.2x 44% Decline 41.2x 39.5x 40.0x 38.6x 37.5x 34.5x 34.0x
Slide 16: Financial Strength Ratings
Assured Guaranty Overview Financial Strength Ratings Financial Strength Ratings1 S&P KBRA Moody's AA AA+ A1 AG Stable Outlook Stable Outlook Stable Outlook (May 2024) (October 2024) (July 2024) Recent Updates • In August 2024, S&P issued a press release indicating no change to the AA (stable outlook
Slide 17: Underlying Value: High-Quality Investment Portfolio
Assured Guaranty Overview Underlying Value: High-Quality Investment Portfolio Total Invested Assets and Cash1,2 U.S. government & As of September 30, 2024 agencies 1% AAA 3 • Predominately consists of highly rated, 27% fixed maturity and short-term investments, Other invested assets and cash; 53% ra
Slide 18: New Business Activity
ASSURED GUARANTY New Business Activity
Slide 19: New Business Activity Overview
New Business Activity Overview Gross Par Written • Assured Guaranty insured approximately $21 (First Three Quarters; $ in millions) billion of aggregate par in the first nine months of 2024 – This aggregate amount of par is the second largest $20,170 $20,285 $20,603 amount in the first nine months o
Slide 20: Insurance: U.S. Public Finance
New Business Activity Insurance: U.S. Public Finance • Assured Guaranty’s U.S. public finance new business production was strong in the first three quarters of 2024 – U.S. public finance insured over $15 billion of total par that closed in the first nine months of the year – U.S. public finance PVP1
Slide 21: Broadening Market Awareness: Current Advertising Campaigns
U.S. Public Finance Broadening Market Awareness: Current Advertising Campaigns 21 ASSURED GUARANTY INC.
Slide 22: Competitive Landscape: Select AG Transactions in 2024
U.S. Public Finance Competitive Landscape: Select AG Transactions in 2024 Source: Refinitiv SDC Database. Amounts are on a sale-date basis and reflect only those series insured by Assured Guaranty Inc. (New York, NY). 22 ASSURED GUARANTY INC.
Slide 23: Insurance: Non-U.S. Public Finance
New Business Activity Insurance: Non-U.S. Public Finance Non-U.S. Public Finance PVP1 (First Three Quarters; $ in millions) • In the first three quarters of 2024, business activity was attributable to secondary market $73 guarantees of several regulated utilities and $67 $63 airport transactions $44
Slide 24: Insurance: Global Structured Finance
New Business Activity Insurance: Global Structured Finance • In the first three quarters of 2024, new Global Structured Finance PVP1 business PVP primarily consisted of pooled (First Three Quarters; $ in millions) corporate transactions, insurance $82 securitizations and subscription finance transac
Slide 25: Asset Management and Alternative Investments
Asset Management and Alternative Investments
Slide 26: Asset Management and Alternative Investments Highlights
Asset Management and Alternative Investments Highlights • In July 2023, Assured Guaranty contributed most of AssuredIM to Sound Point in exchange for approximately 30% of the combined Sound Point entity, and sold its entire equity interest in Assured Healthcare Partners, LLC (AHP) – AG engaged Sound
Slide 27: Assured Guaranty Insured Portfolio
Assured Guaranty Insured Portfolio Eiffage CEVM / Foster + Partners / Jean-Pierre Lescourret
Slide 28: Insured Portfolio Overview
Assured Guaranty Insured Portfolio Overview Net Par Outstanding As of September 30, 2024 ($ in billions) Non-U.S. Structured • Assured Guaranty’s insured portfolio is Finance largely concentrated in U.S. public finance $1.6 1% – 76% U.S. public finance – 20% Non-U.S. public finance Non-U.S. – 3% U.S
Slide 29: Net Par Outstanding by Sector
Assured Guaranty Insured Portfolio Net Par Outstanding by Sector as of September 30, 2024 Portfolio Diversification by Sector Non-U.S. Structured Finance U.S. 1% Public Finance 76% U.S. Structured Finance 3% Non-U.S. Public Finance 20% $258.2 billion1,2 U.S. & Non-U.S. U.S. Public Finance Portfolio
Slide 30: Net Par Outstanding by Ratings
Assured Guaranty Insured Portfolio Net Par Outstanding by Ratings as of September 30, 2024 Portfolio Diversification by Rating BIG AAA 4% 1% AA 10% BBB 37% A 48% $258.2 billion1,2 U.S. & Non-U.S. U.S. Public Finance Portfolio Non-U.S. Public Finance Portfolio Structured Finance Portfolios BIG AAA BI
Slide 31: Net Par Outstanding Amortization
Assured Guaranty Insured Portfolio Net Par Outstanding Amortization • Since year-end 2018, the net par outstanding of the insured portfolio has stabilized significantly – Since year-end 2022, net par outstanding increased by $25 billion, with increased par outstanding in all three asset classes: U.S
Slide 32: Puerto Rico Update
Assured Guaranty Insured Portfolio Puerto Rico Update • The Company has divested the majority of the consideration it received as a result of the resolution of the Company’s exposure to insured Puerto Rico credits experiencing payment default other than PREPA (2022 Puerto Rico Resolutions) – Remaini
Slide 33: Puerto Rico Exposure
Assured Guaranty Insured Portfolio Puerto Rico Exposure Exposure to Puerto Rico As of September 30, 2024 ($ in millions) Net Par Outstanding Total Net Par Gross Par AG AG Re Outstanding Outstanding Defaulted Puerto Rico Exposures Puerto Rico Electric Power Authority (PREPA) $377 $154 $531 $539 Total
Slide 34: Net Par Outstanding by BIG Surveillance Category
Assured Guaranty Insured Portfolio Net Par Outstanding by BIG Surveillance Category1 Financial Guaranty Insurance and Credit Derivatives Surveillance Categories As of September 30, 2024 Net Par Percent of Percent of ($ millions) Outstanding BIG Par Total Par • Approximately $7.5 billion (2.9% of tot
Slide 35: BIG Surveillance Category
Assured Guaranty Insured Portfolio BIG Surveillance Category The Company assigns each BIG exposure to one of the three BIG surveillance categories based on loss modeling1 and scenario probability weighting: BIG Surveillance Category 1: Exposures for which there are possible losses, on a present valu
Slide 36: Total BIG Exposure
Assured Guaranty Insured Portfolio Total BIG Exposure • Exposure with an internal BIG rating increased by $5.1 billion in the third quarter driven primarily by transactions that were downgraded in the non-U.S. public finance U.K. regulated utilities sector partially offset by other transactions remo
Slide 37: BIG and BIG Exposure
Assured Guaranty Insured Portfolio BIG 2 and BIG 3 Exposure • Transactions rated BIG 2 and BIG 3 represent less than 30% of all BIG transactions, or 1.2% of total net par outstanding – BIG Surveillance Category 2 and Category 3 are exposures there are possible losses, on a present value basis, and t
Slide 38: Expected Loss and LAE to Be Paid: Three Months Ended September 30, 2024
Assured Guaranty Expected Loss and LAE to Be Paid Three Months Ended September 30, 2024 ($ in millions) Rollforward of Net Expected Loss and LAE to be Paid1 for the Three Months Ended September 30, 2024 Net Expected Loss Net Economic Loss Net Expected Loss to be Paid Development Net (Paid) to be Pai
Slide 39: Expected Loss and LAE to Be Paid: Nine Months Ended September 30, 2024
Assured Guaranty Expected Loss and LAE to Be Paid Nine Months Ended September 30, 2024 ($ in millions) Rollforward of Net Expected Loss and LAE to be Paid1 for the Nine Months Ended September 30, 2024 Net Expected Loss Net Economic Loss Net Expected Loss to be Paid Development Net (Paid) to be Paid
Slide 40: AG Insured Portfolio
AG Insured Portfolio Eiffage CEVM / Foster + Partners / Jean-Pierre Lescourret
Slide 41: AG Net Par Outstanding by Sector
AG Insured Portfolio Net Par Outstanding by Sector as of September 30, 2024 Portfolio Diversification by Sector Non-U.S. Structured Finance 1% U.S. Public U.S. Finance Structured 77% Finance 2% Non-U.S. Public Finance 20% $198.2 billion1 U.S. & Non-U.S. U.S. Public Finance Portfolio Non-U.S. Public
Slide 42: AG Net Par Outstanding by Ratings
AG Insured Portfolio Net Par Outstanding by Ratings as of September 30, 2024 Portfolio Diversification by Rating BIG AAA 4% 1% AA 10% BBB 37% A 48% $198.2 billion1 U.S. & Non-U.S. U.S. Public Finance Portfolio Non-U.S. Public Finance Portfolio Structured Finance Portfolios BIG AAA AAA BIG <1% BIG AA
Slide 43: AG Investment Portfolio
AG Investment Portfolio Value as of September 30, 2024 Invested Assets and Cash1,2 As of September 30, 2024 U.S. government & agencies 1% AAA 3 • Predominately consists of highly rated, Other invested 27% assets fixed maturity and short-term investments, <1% and cash; 54% rated AA or higher Equity m
Slide 44: AGUK, AGE, AG Re and AGRO
ASSURED (GUARANTY AGUK, AGE, AG Re and AGRO M4
Slide 45: AGUK and AGE Net Par Outstanding
AGUK and AGE Net Par Outstanding AGUK Net Par Outstanding As of September 30, 2024 ($ in billions) Non-U.S. Sovereign • AGUK is an insurance company domiciled in the and Sub- U.K. that provides financial guarantees in the U.K. sovereign $1.1 and certain other countries Non-U.S. – Provides insurance
Slide 46: AG Re and AGRO
AG Re and AGRO AG Re AGRO Net Par Outstanding1 Outstanding Net Exposure2 As of September 30, 2024 ($ in billions) As of September 30, 2024 ($ in billions) Diversified U.S. Non-U.S. real estate Structured Structured $1.5 Finance Finance Financial $4.1 7% $0.3 Guaranty <1 % Structured 30% Finance 5% N
Slide 47: Appendix
ASSURED (GUARANTY
Slide 48: Explanation of Non-GAAP Financial Measures
Appendix Explanation of Non-GAAP Financial Measures The Company discloses both: (i) financial measures determined in accordance with GAAP; and (ii) financial measures not determined in accordance with GAAP (non-GAAP financial measures). Financial measures identified as non-GAAP should not be conside
Slide 49: Explanation of Non-GAAP Financial Measures (Cont'd)
Appendix Explanation of Non-GAAP Financial Measures (Cont’d) The following paragraphs define each non-GAAP financial measure disclosed by the Company and describe why it is useful. To the extent there is a directly comparable GAAP financial measure, a reconciliation of the non-GAAP financial measure
Slide 50: Explanation of Non-GAAP Financial Measures (Cont'd)
Appendix Explanation of Non-GAAP Financial Measures (Cont’d) Adjusted Operating Shareholders’ Equity and Adjusted Book Value: Management believes that adjusted operating shareholders’ equity is a useful measure because it excludes the fair value adjustments on investments, credit derivatives and CCS
Slide 51: Explanation of Non-GAAP Financial Measures (Cont'd)
Appendix Explanation of Non-GAAP Financial Measures (Cont’d) Adjusted Operating Return on Equity (Adjusted Operating ROE): Adjusted Operating ROE represents adjusted operating income for a specified period divided by the average of adjusted operating shareholders’ equity at the beginning and the end
Slide 52: Reconciliation of Gross Written Premiums to PVP
Appendix AGL Consolidated Reconciliation of Gross Written Premiums (GWP) to PVP Three Months Ended Reconciliation of GWP to PVP September 30, Year Ended December 31, (dollars in millions) 2024 2023 2023 2022 2021 2020 2019 2018 2017 Total GWP $61 $40 $357 $360 $377 $454 $677 $612 $307 1 Less: Instal
Slide 53: Reconciliation of Net Income to Adjusted Operating Income
Appendix Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income1 Three Months Ended Nine Months Ended Adjusted Operating Income Reconciliation September 30, September 30, (dollars in millions, except per share amounts) 2024 2023 2024 2023 Per Per Diluted Per Diluted Dil
Slide 54: Contacts
Assured Guaranty Contacts: Robert Tucker Senior Managing Director Investor Relations and Corporate Communications Direct: 212.339.0861 rtucker@agltd.com Michael Walker Managing Director Fixed Income Investor Relations Direct: 212.261.5575 mwalker@agltd.com Andre Thomas Managing Director Investor Rel
Assured Guaranty — Debt Investor Presentation (September 2024) on 6ix