Assured Guaranty Ltd. · NYSE:AGO
Assured Guaranty — Q1 2025 Earnings Presentation
63 slides from Assured Guaranty's earnings presentation, May 9, 2025
Slide 1: Equity Investor Presentation
Equity Investor Presentation March 31, 2025
Slide 2: 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 3: 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 4: Table of Contents
Table of Contents • Quarterly highlights • Assured Guaranty overview – Strength of business model – Financial strength ratings – Track record of creating shareholder value – Dividend limitation calculations – Simplified corporate structure • Underlying value – High-quality investment portfolio – Del
Slide 5: Highlights
ASSURED GUARANTY Highlights
Slide 6: First Quarter 2025 Highlights
First Quarter 2025 Highlights Financial Results • Earned $162 million of adjusted operating income1 (or $3.18 per share) – This first quarter result includes a pre-tax gain of approximately $103 million related to the successful conclusion of the Company’s LBIE litigation • Increased shareholders’ e
Slide 7: New Insurance Business Production
New Insurance Business Production Gross Par Written (First Quarter; $ in millions) • Assured Guaranty insured $5 billion of aggregate par in the first quarter of 2025 – This aggregate amount of par is the third largest $5,472 $5,363 first-quarter amount in a decade $5,002 $4,471 – U.S. public financ
Slide 8: Assured Guaranty Overview
ASSURED GUARANTY Assured Guaranty Overview
Slide 9: Financial Guaranty Business Model
Assured Guaranty Overview Financial Guaranty Business Model • What do we insure? – We insure financial obligations in three main sectors ▪ U.S. public finance and infrastructure transactions ▪ Non-U.S. public finance and infrastructure transactions ▪ U.S. and non-U.S. structured finance transactions
Slide 10: Financial Guaranty Business Model (Continued)
Assured Guaranty Overview Financial Guaranty Business Model (Continued) • How do we invest our investment portfolio? – Our portfolio predominately consists of highly rated, fixed maturity and short-term investments, and cash – We also have a strategy to invest a portion of our investment portfolio i
Slide 11: Overview and Ratings
Assured Guaranty Overview Overview and Ratings Assured Guaranty Ltd. • Assured Guaranty is the leading financial guaranty franchise, with four decades of ($ in billions) Mar. 31, 2025 experience in the municipal and structured finance markets Insured net par outstanding $263.6 • We participate in th
Slide 12: Resilience and Enduring Financial Strength
Assured Guaranty Overview Resilience and Enduring Financial Strength Assured Guaranty maintained over $10 billion of claims-paying resources1 over 17 years while paying nearly $15 billion to insured investors From January 1, 2008 through $16 As of December 31 of each full year March 31, 2025: ($ in
Slide 13: Insurance Subsidiaries' Claims-Paying Resources
Assured Guaranty Overview Insurance Subsidiaries’ Claims-Paying Resources As of March 31, 2025 ($ in millions) AG AG Re1 Eliminations2 Total Claims-paying resources Policyholders' surplus $ 3,522 $ 779 $ 57 $ 4,358 Contingency reserve 1,421 — — 1,421 Qualified statutory capital 4,943 779 57 5,779 Un
Slide 14: Assured Guaranty Ltd. Corporate Structure
Assured Guaranty Overview Assured Guaranty Ltd. Corporate Structure 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) U.S. Hold
Slide 15: 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 16: Adjusted Operating Income
Assured Guaranty Overview Adjusted Operating Income • In the first quarter of 2025, adjusted operating income per share1 was $3.18, over 62% higher than the first quarter 2024 amount ($1.96) – This result was driven by a $103 million gain related to our successful LBIE litigation as well as a $59 mi
Slide 17: Track Record of Creating Shareholder Value
Assured Guaranty Overview Track Record of Creating Shareholder Value • We have returned excess capital to shareholders by repurchasing our common shares and distributing dividends – Since 2013, when we started our capital management strategy of repurchasing our common shares, through May 8, 2025, we
Slide 18: Expected 2025 Dividend Limitation Calculations
Assured Guaranty Overview Expected 2025 Dividend Limitation Calculations Assured Guaranty Inc. (AG) Assured Guaranty Re Ltd. (AG Re) (Domiciled in Maryland) (Domiciled in Bermuda) • Cannot exceed the lesser of: • Cannot exceed 25% of prior year total statutory capital and (i) 10% of prior year’s pol
Slide 19: Simplified Corporate Structure
Assured Guaranty Overview Simplified Corporate Structure With Expected Dividend Capacity1 Shareholders • Total investment portfolio and cash of $68 million2 Assured Guaranty Ltd. • 12-month through March 31, 2025, (Head Office – Bermuda; Tax Residence – U.K.) net expenses of $42 million • Annualized
Slide 20: Underlying Value
ASSURED (GUARANTY
Slide 21: Historical Growth
Underlying Value Historical Growth Adjusted Book Value Per Share1,2 $170.12 $172.79 $155.92 $141.98 55.37 55.39 $130.67 ) %C AGR 49.38 as e (10 48.06 ncre 41.94 5% i alu e: 60 Bo ok V Adj. $114.75 $117.40 $41.90 $106.54 $35.66 $88.73 $93.92 $26.06 $29.54 16.53 $24.51 12.13 7.18 8.17 6.43 $18.88 $21.
Slide 22: High-Quality Investment Portfolio
Underlying Value High-Quality Investment Portfolio Total Invested Assets and Cash1,2 U.S. government & As of March 31, 2025 agencies 3 1% AAA 24% Other invested assets 6% Sound Point 4% • Predominately consists of highly rated, fixed maturity and short-term investments, Fixed maturity 4 AA and cash;
Slide 23: Total Assets and Cash
Underlying Value Total Assets and Cash • Total invested assets and cash have declined by approximately $2 billion since year-end 2009, despite the Company returning $6.6 billion to shareholders in the form of share repurchases and dividends as well as paying $6.1 billion in net claims Total Invested
Slide 24: Net Investment Income and Operating Expenses
Underlying Value Net Investment Income1 and Operating Expenses • Nearly all of the Company’s annual operating expenses other than asset management expenses2 are covered by annual net investment income1 Net Investment Income1 ($ in millions) $391 $365 $355 $340 $307 $287 $269 $269 3 $98 $87 2021 2022
Slide 25: New Business Activity
ASSURED GUARANTY New Business Activity
Slide 26: Insurance: U.S. Public Finance
New Business Activity Insurance: U.S. Public Finance • In first quarter 2025, Assured Guaranty’s U.S. public finance insured its second largest amount of first-quarter par in a decade – U.S. public finance insured $4 billion of total par that closed in the first quarter of 2025 – U.S. public finance
Slide 27: Insurance: Non-U.S. Public Finance
New Business Activity Insurance: Non-U.S. Public Finance Non-U.S. Public Finance PVP1 (First Quarter; $ in millions) • In the first quarter of 2025, business activity primarily included U.K. regulated utility $30 transactions as well as a secondary market transaction for a U.K. public sector entity
Slide 28: Insurance: Global Structured Finance
New Business Activity Insurance: Global Structured Finance Global Structured Finance PVP1 • In the first quarter of 2025, business activity (First Quarter; $ in millions) was primarily attributable subscription finance and pooled corporate transactions $60 • During 2024, business activity primarily
Slide 29: Asset Management and Alternative Investments
Asset Management and Alternative Investments
Slide 30: Asset Management and Alternative Investments Highlights
Asset Management and Alternative Investments Highlights Asset Management • Assured Guaranty participates in the asset management business through its 30% ownership interest in Sound Point – Assured Guaranty’s share of Sound Point’s net income was $13 million (pre-tax) in the first quarter 2025 ▪ Thi
Slide 31: Financial Results
ASSURED (GUARANTY Financial Results M4
Slide 32: First Quarter 2025 Results
First Quarter 2025 Results Select Financial Items Select GAAP Results ($ in millions, except per share data and percentages) Three Months Ended March 31, % Change vs. 1Q-24 2025 2024 Net income (loss) attributable to AGL $176 $109 61% Net income (loss) attributable to AGL per share $3.44 $1.89 82% N
Slide 33: Supplemental Information
First Quarter 2025 Results Supplemental Information Select Income Components ($ in millions) Three Months Ended March 31, 2025 Employee Equity in Net Income (Loss) Compensation, Benefit Earnings Attributable to Net Earned Net Investment Loss Expense Expenses and Other (Losses) of Assured Guaranty Pr
Slide 34: Insurance Loss Measures
Insurance Loss Measures Loss and LAE reported on the GAAP Consolidated Statement of Operations: • Represents loss and loss adjustment expenses (LAE) for contracts accounted for as insurance and excludes losses related to credit derivatives, FG VIEs and contracts accounted for under other GAAP accoun
Slide 35: Net Expected Loss and LAE to Be Paid
Net Expected Loss and LAE to Be Paid (Recovered) Three Months Ended March 31, 2025 ($ in millions) Rollforward of Net Expected Loss and LAE to be Paid (Recovered)1 for the Three Months Ended March 31, 2025 Net Expected Loss Net Economic Loss Net Expected Loss to be Paid Development Net (Paid) to be
Slide 36: Insured Portfolio
Assured Guaranty Insured Portfolio Eiffage CEVM / Foster + Partners / Jean-Pierre Lescourret
Slide 37: Net Par Outstanding by Sector
Assured Guaranty Insured Portfolio Net Par Outstanding by Sector as of March 31, 2025 Portfolio Diversification by Sector Non-U.S. Structured Finance U.S. 1% Public Finance 77% U.S. Structured Finance 3% Non-U.S. Public Finance 19% $263.6 billion1,2 Global U.S. Public Finance Portfolio Non-U.S. Publ
Slide 38: Net Par Outstanding by Ratings
Assured Guaranty Insured Portfolio Net Par Outstanding by Ratings as of March 31, 2025 Portfolio Diversification by Rating BIG AAA 4% 1% AA 10% BBB 37% A 49% $263.6 billion1 Global U.S. Public Finance Portfolio Non-U.S. Public Finance Portfolio Structured Finance Portfolio BIG AAA BIG AAA BIG AAA 1%
Slide 39: Net Par Outstanding Amortization
Assured Guaranty Insured Portfolio Net Par Outstanding Amortization • Since year-end 2022, net par outstanding increased by $31 billion, with increased par outstanding in each of U.S. public finance, non-U.S. public finance and global structured finance • Since year-end 2016, the composition of the
Slide 40: Puerto Rico Update
Assured Guaranty Insured Portfolio Puerto Rico Update • The Company has divested the majority of the consideration it received as a result of the 2022 resolution of the Company’s exposure to insured Puerto Rico credits experiencing payment default other than PREPA • The Company continues to work to
Slide 41: Puerto Rico Exposure
Assured Guaranty Insured Portfolio Puerto Rico Exposure Exposure to Puerto Rico As of March 31, 2025 ($ in millions) Net Par Outstanding Total Net Par Gross Par AG AG Re Outstanding Outstanding Defaulted Puerto Rico Exposure Puerto Rico Electric Power Authority (PREPA) $378 $154 $532 $540 Total Defa
Slide 42: CLO Exposures
Assured Guaranty CLO Exposures Exposure in Three Distinct Areas Non-CLO Exposure $262.7 1. $845 million of insured exposure • Ten transactions • All of the exposure is investment grade • Average credit enhancement is approximately 38% • The Company only pays a claim in the event of a shortfall in in
Slide 43: BIG Surveillance Category
Assured Guaranty Insured Portfolio BIG Surveillance Category The Company assigns each BIG exposure to one of the three BIG surveillance categories based on loss modeling1 and scenario probability weighting: BIG Surveillance Category 1: Exposures for which there are possible future losses, on a prese
Slide 44: Net Par Outstanding by BIG Surveillance Category
Assured Guaranty Insured Portfolio Net Par Outstanding by BIG Surveillance Category1 Financial Guaranty and Credit Derivatives Surveillance Categories As of March 31, 2025 Net Par Percent of Percent of ($ millions) Outstanding BIG Par Total Par • Approximately $7.1 billion (2.7% of total BIG Surveil
Slide 45: Total BIG Exposure
Assured Guaranty Insured Portfolio Total BIG Exposure • Exposure with an internal BIG rating is $9.5 billion – This amount decreased by $640 million in the first quarter of 2025, driven primarily by the upgrade of a healthcare transaction from BIG Surveillance Category 1 to investment grade – Approx
Slide 46: BIG and BIG Exposure
Assured Guaranty Insured Portfolio BIG 2 and BIG 3 Exposure • Transactions rated BIG 2 and BIG 3 represent approximately 26% of all BIG transactions (0.9% of total net par outstanding) – BIG Surveillance Category 2 and Category 3 are exposures for which there are possible future losses, on a present
Slide 47: BIG Exposures Greater Than $250 Million
Assured Guaranty Insured Portfolio BIG Exposures > $250 Million BIG Exposures Greater Than $250 Million As of March 31, 2025 ($ in millions) Net Par Internal Type1 Name or Description Outstanding Rating2 PF Southern Water Services Limited $2,704 BB PF Thames Water Utilities Finance Plc 2,217 B PF Co
Slide 48: Appendix
ASSURED (GUARANTY
Slide 49: 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 50: 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 51: Adjusted Operating Shareholders' Equity and Adjusted Book Value
Appendix Explanation of Non-GAAP Financial Measures (Cont’d) Adjusted Operating Shareholders’ Equity and Adjusted Book Value: The Company’s management believes that adjusted operating shareholders’ equity is a useful measure because it excludes the fair value adjustments on investments, credit deriv
Slide 52: Adjusted Operating Return on Equity
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 53: Reconciliation of Gross Written Premiums to PVP
Appendix AGL Consolidated Reconciliation of Gross Written Premiums (GWP) to PVP1 Three Months Ended Reconciliation of GWP to PVP1 March 31, Year Ended December 31, (dollars in millions) 2025 2024 2024 2023 2022 2021 2020 2019 2018 Total GWP $35 $61 $440 $357 $360 $377 $454 $677 $612 2 Less: Installm
Slide 54: Reconciliation of Net Income to Adjusted Operating Income
Appendix Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income1 Three Months Ended Adjusted Operating Income1 Reconciliation March 31, (dollars in millions, except per share amounts) 2025 2024 Per Per Diluted Diluted Total Share Total Share Net income (loss) attributab
Slide 55: Reconciliation of Net Income to Adjusted Operating Income (2019-2024)
Appendix Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income1 (2013-2024) Adjusted Operating Income1 Reconciliation Year Ended December 31, (dollars in millions, except per share amounts) 2024 2023 2022 2021 2020 2019 Total Per Share Total Per Share Total Per Share T
Slide 56: Reconciliation of Net Income to Adjusted Operating Income (2007-2012)
Appendix Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income1 (2004-2012) Adjusted Operating Income1 Reconciliation Year Ended December 31, (dollars in millions, except per share amounts) 2012 2011 2010 2009 2008 2007 Total Per Share Total Per Share Total Per Share T
Slide 57: Reconciliation of AGL Shareholders' Equity to Adjusted Book Value
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 Adjusted book value1 reconciliation As of (dollars in millions, except per share amounts) Mar 31, 2025 Dec 31, 2024 Mar 31, 2024 Dec 31, 2023 Per Per Per Total Share Total Share Total Per Share Total Share Reconciliation of
Slide 58: Reconciliation of Shareholders' Equity to Adjusted Book Value (2018-2022)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2018-2022) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2022 2021 2020 2019 2018 Per Per Per Per Per Total Share Total Share Total Share Total Share Total Share Reco
Slide 59: Reconciliation of Shareholders' Equity to Adjusted Book Value (2013-2017)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2013-2017) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2017 2016 2015 2014 2013 Per Per Per Per Per Total Share Total Share Total Share Total Share Total Share Reco
Slide 60: Reconciliation of Shareholders' Equity to Adjusted Book Value (2008-2012)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2008-2012) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2012 2011 2010 2009 2008 Per Per Per Per Per Total Share Total Share Total Share Total Share Total Share Reco
Slide 61: Reconciliation of Shareholders' Equity to Adjusted Book Value (2004-2007)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2004-2007) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2007 2006 2005 2004 2004 Q2 Per Per Per Per Per Total Share Total Share Total Share Total Share Total Share R
Slide 62: Reconciliation of AGL GAAP ROE to Adjusted Operating ROE
Appendix Reconciliation of AGL GAAP ROE1 to Adjusted Operating ROE1,2 ROE Reconciliation (dollars in millions) Three Months Ended March 31, 2025 2024 Net income (loss) attributable to AGL $176 $109 2 Adjusted operating income 162 113 Average shareholders' equity attributable to AGL $5,543 $5,671 2 A
Slide 63: Contacts
Assured Guaranty Contacts: Robert Tucker Senior Managing Director Investor Relations and Corporate Communications Direct: 212.339.0861 rtucker@agltd.com Andre Thomas Managing Director Equity Investor Relations Direct: 212.339.3551 athomas@agltd.com Glenn Alterman Vice President Investor Relations Di