Assured Guaranty Ltd. · NYSE:AGO
Assured Guaranty — Investor Day (June 2008)
95 slides from Assured Guaranty's investor day presentation, Jun 11, 2008
Slide 1: Equity and Fixed Income Investor Day June 11, 2008
Assured Guaranty Ltd. Equity and Fixed Income Investor Day June 11, 2008
Slide 2: Agenda
2 Agenda Bob Mills Capital and Financial Overview Andrew Pickering Risk Management and Surveillance Howard Albert Credit Underwriting Coffee Break Mike Schozer Financial Guaranty Direct Dominic Frederico Assured Guaranty Ltd.: Strategic Overview Sabra Purtill Overview and Management Introduction
Slide 3: Safe Harbor Disclosure
3 Safe Harbor Disclosure Any forward-looking statements made in these presentations reflect Assured Guaranty Ltd.’s (the “Company”) current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Ac
Slide 4: Strategic Overview
Strategic Overview Dominic Frederico President & Chief Executive Officer Assured Guaranty Ltd.
Slide 5: Assured Guaranty Overview
5 Assured Guaranty Overview • Our sole focus is financial guaranty - 20 year track record in financial guaranty market - Largest financial guaranty reinsurer in the business - Growing financial guaranty direct franchise • Strong capitalization - Consolidated GAAP equity of $1.5 billion, second highe
Slide 6: Key Achievements Since IPO
6 Key Achievements Since IPO • April 22 - IPO $18.00 per share • May - Assured Guaranty Corp. upgraded to Aa1 (stable) by Moody’s • July Assured Guaranty (UK) authorized • February - Single-name corporate credit default book of business sold • April - Fitch assigns AAA (stable) to Assured Guaranty C
Slide 7: Assured Guaranty Today
7 Assured Guaranty Today • One of the only two primary financial guarantors with triple-A (stable) ratings from all three major credit rating agencies • Second largest financial guaranty company based on first quarter 2008 GAAP equity and new business production • 168 employees globally with offices
Slide 8: Strategic Goals
8 Strategic Goals • Expand the financial guaranty direct franchise - Public finance and structured finance • Maintain leading market position in reinsurance • Exercise strict underwriting discipline • Maintain ratings - Triple-A (stable) for direct companies - Double-A (stable) for reinsurance compa
Slide 9: Competitive Advantages
9 Competitive Advantages • Flexible platform - Direct and reinsurance - Public finance and structured finance - U.S., Bermuda and European licensed companies • Investor capacity for Assured-wrapped bonds - Fixed income investors have limited exposure to Assured given our recent entry into the direct
Slide 10: Industry Environment: Exposure to RMBS
10 Industry Environment: Exposure to RMBS AGL Ambac CIFG FGIC FSA MBIA SCA Lower risk assets US prime first lien $2.3 $11.4 $0.0 $2.4 $2.8 $2.2 $0.1 US Alt-A 7.4 6.5 0.1 2.0 1.7 3.6 3.1 Subprime RMBS 7.0 8.1 1.9 7.9 5.1 4.2 1.1 Total lower risk assets 16.7 26.0 2.0 12.3 9.6 10.0 4.3 Medium risk asse
Slide 11: New Competitive Tiering
11 New Competitive Tiering BB / Baa3 / BBB Neg / Neg / Neg N/A 553:1 303,1452 548 FGIC A- / A3 / BB Neg / Neg / Neg 10 445:1 154,900 348 SCA A+ / Ba2 / CCC Neg / Neg / evolving N/A 125:1 78,706 631 CIFG1 AA / Aaa / AA Neg / Neg / Neg 40 394:1 511,082 1,297 Ambac AA / Aaa / AA Neg / Neg / Neg 44 324:
Slide 12: Unprecedented Market Opportunity
12 Unprecedented Market Opportunity • U.S. public finance • Asset-backed securities • International infrastructure • Reinsurance
Slide 13: 2008 Goals
13 2008 Goals • Continue to exercise strict underwriting discipline - No U.S. RMBS in reinsurance segment - No CDOs of ABS or other transactions with embedded leverage • Financial goals - Increase operating return on equity - Continue efficient capital management - Maintain additional capital cushio
Slide 14: Financial Guaranty Direct
Financial Guaranty Direct Mike Schozer President Assured Guaranty Corp.
Slide 15: Outline
15 Outline • Overview • U.S. public finance • Asset-backed securities • International infrastructure
Slide 16: Direct Business Senior Staff
16 Direct Business Senior Staff Michael Schozer President Bill Hogan SMD Public Finance Paul Livingstone SMD Structured Credit Jeffrey Nabi SMD Consumer ABS/MBS Marc Bajer SMD International John Trahan MD Public Finance Jack Gray MD MBS Nick Proud MD Structured Finance Daniel Bevill MD Structured Cr
Slide 17: New Business Written
17 New Business Written $8.6 $24.9 $35.7 $60.1 $61.1 $120.6 $146.8 $264.1 $119.7 $152.6 $0 $100 $200 $300 $400 $500 $600 2004 2005 2006 2007 $ in millions U.S. public finance U.S. structured finance International Financial Guaranty Direct PVP1 $476.8 $302.2 $145.5 $69.7 $9.5 $1.4 $1.7 $4.3 $12.5 $15
Slide 18: U.S. Public Finance
18 U.S. Public Finance • Core long term franchise • Fundamental value proposition of bond insurance remains - Enhancing liquidity - Improving access to capital markets for issuers - Providing surveillance and remediation - Insuring against credit risk 0 50 100 150 200 250 300 350 400 450 500 1999 20
Slide 19: U.S. Public Finance Relative Spreads
19 U.S. Public Finance Relative Spreads Source: Thomson’s MMD Interactive and JPMorgan Global Structured Finance Research database 100 = Spread at October 2, 2007 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 10/2/07 10/16/07 10/30/07 11/13/07 11/27/07 12/11/07 12/25/07 1/8/08 1/22/08 2/5/08 2/19/08
Slide 20: U.S. Public Finance Insurance Penetration
20 U.S. Public Finance Insurance Penetration • Insured penetration for the last 10 years has averaged approximately 50% Source: SDC Platinum 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Penetration Rate Uninsured New Issue Volume Insured New Issue Vo
Slide 21: U.S. Public Finance Spread Environment
21 U.S. Public Finance Spread Environment Source: Thomson’s MMD Interactive 0 20 40 60 80 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 30yr BBB GO vs 30yr AAA Insured GO 30yr AAA Insured GO vs 30yr AAA Natural GO (bps) U.S. Municipal Bond C
Slide 22: U.S. Public Finance Market Share
22 U.S. Public Finance Market Share Source: SDC Platinum Assured Guaranty Corp. New Issue Market Share 0% 10% 20% 30% 40% 50% Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Share of Insured Market
Slide 23: U.S. Public Finance
23 U.S. Public Finance Indices represent composite of bonds by insured by AGC and FSA, respectivel y. Each composite represent about 35 bonds from each insurer across various sectors and security features with similar maturities (25-30yrs) , coupons (near 5%), call structures and state locations. Ev
Slide 24: Franchise Expansion
24 Franchise Expansion Source: Assured Guaranty’s public filings * As of May 31, 2008 Assured Guaranty Financial Guaranty Direct U.S. Public Finance Gross Par Written by Asset Class - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2004 2005 2006 2007 2008* Gross par written ($ billions)
Slide 25: Asset-Backed Securities
25 Asset-Backed Securities Assured Guaranty Financial Guaranty Direct ABS Gross Par Written by Asset Class - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 2004 2005 2006 2007 2008* Gross par written ($millions) Other structured finance Pooled corporate obligations Insurance securitization Consumer
Slide 26: ABS Market Volumes
26 ABS Market Volumes Year-over-year U.S. ABS Issuance Change Source: Thomson Financial Securities Data and Deutsche Bank (98.6%) (90.5%) (34.6%) (39.9%) 13.9% (84.7%) (84.8%) $0 bil. $100 bil. $200 bil. $300 bil. $400 bil. $500 bil. $600 bil. Subprime RMBS CDO Auto Student Loan Credit Card Equipmen
Slide 27: Wider Spread Environment
27 Wider Spread Environment Credit Spread Development in Selected Asset Classes Source: JPMorgan Global Structured Finance Research database 0 50 100 150 200 250 300 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Auto (Near Prime) AAA 3yr Spread to Swap U.S. HY CLO AAA 6-8yr WAL Spread to L
Slide 28: Consumer Asset-Backed Securities
28 Consumer Asset-Backed Securities Source: Asset-Backed Alert and Deutsche Bank Data includes auto public and 144a issuance. * As of May 31, 2008 Total U.S. Auto ABS Issuance 0 10 20 30 40 50 60 70 80 90 100 2004 2005 2006 2007 2008 YTD Year Issuance (in $Billions) Insured Subprime Subprime - Unins
Slide 29: International Infrastructure Finance - Europe
29 International Infrastructure Finance - Europe - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2001 2002 2003 2004 2005 2006 2007 2008* GBP (millions) equivalent Other Repackage Health Communications Accommodation Natural resources Transport Source: HSBC Data excludes public sector sponsored infras
Slide 30: International Infrastructure Finance - Europe
30 International Infrastructure Finance - Europe Source: Operating supplements of each insurer Represents international public finance and related sub-categories for each insurer. FGIC incorporates all international finance. Data excludes $6.3 bn par of European infrastructure finance insured by CIF
Slide 31: Asia Pacific Market Overview
31 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2004 2005 2006 2007 US$millions Wrapped Unwrapped Asia Pacific Market Overview Source: Dealogic Australia Non-Recourse Project Finance
Slide 32: Asia Pacific Market Overview: Structured Finance
32 Asia Pacific Market Overview Structured Finance – Australia Issuance Source: Thomson’s Financial 80 70 60 50 40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 AUD Billion Equivalent 1st Half 2nd Half
Slide 33: 2008 Outlook
33 2008 Outlook • Three core markets - U.S. public finance - Asset-backed securities - International infrastructure • Favorable macro fundamentals
Slide 34: Financial Guaranty Reinsurance
Financial Guaranty Reinsurance David Penchoff President Assured Guaranty Re Ltd.
Slide 35: Financial Guaranty Reinsurance
35 Financial Guaranty Reinsurance • Reinsurance is a core franchise at Assured - 20 year track record in this market - Has provided reinsurance to all the triple-A participants in the market • Assured Guaranty Re (AG Re) is a leading financial guaranty reinsurance company - $1,095 million in GAAP eq
Slide 36: AG Re Staff
36 AG Re Staff David Penchoff President Gary Burnet Managing Director Darrin Futter Financial Controller Accounting & Finance Elizabeth Sullivan VP Risk Management Stephen Shea VP Underwriting Sheila Joynes AVP Underwriting Sandra Joell Accountant Patricia Amaral Accountant Serena Smith AVP Surveill
Slide 37: Competitive Position
37 Competitive Position Not Rated Aa3 Negative AA Negative 132:1 43.0 325.9 Channel Reinsurance AA Negative AA Negative AA Stable AA Negative S&P Outlook RAM Re BluePoint Re AG Re Radian Asset Reinsurer 72.2 455.0 1,095.1 $1,659.8 GAAP Equity 48.7 35.4 113.0 $116.8 Net Par Outstanding 674:1 78:1 103
Slide 38: Comparative S&P Capital Cushion
38 Comparative S&P Capital Cushion Stress test results as of Feb. 14, 2008 Summary Of Currently Expected Losses And Capital Position ($ in millions) Adjusted capital cushion at 12/31/2007 $1,050-1,100 $250-300 $600-650 $200-250 Source: Standard & Poor’s $1,428.2 $332. 2 $687.7 $362.4 $45.9 Total los
Slide 39: Current Environment
39 Current Environment • One third party treaty client (FSA) • Facultative clients not writing new business - Limited facultative cessions in 1Q-08 - Do not expect much volume from anyone other than FSA for 2008 • 2008 new business activity largely focused on portfolio transactions for companies tha
Slide 40: Unaffiliated Reinsurer Strategy
40 Unaffiliated Reinsurer Strategy • Prior to fourth quarter 2007, AG Re’s financial guaranty reinsurance segment focused on expanding facultative business with primary financial guaranty companies - Two treaty clients in 2007 • We successfully expanded unaffiliated facultative business as a percent
Slide 41: 4Q-07 Ambac Transaction
41 4Q-07 Ambac Transaction • In fourth quarter 2007, we underwrote our first facultative portfolio reinsurance cession from Ambac • Closed December 2007 - 82% U.S. domestic public finance - 8% U.S. structured finance - 7% international public finance - 3% international structured finance • Total par
Slide 42: Portfolio Transactions Update
42 Portfolio Transactions Update • Reinsurance team focused on inquiries for portfolio reinsurance transactions - Maintaining our underwriting standards - Working in conjunction with credit and risk management to triage portfolios for acceptable credits • Many challenges to converting quotes to clos
Slide 43: Credit Underwriting
Credit Underwriting Howard Albert Managing Director and Chief Credit Officer
Slide 44: Multiple Layers of Oversight
44 Multiple Layers of Oversight Risk Oversight Committee of Board of Directors – Three members – Chaired by Donald Layton, Chairman and CEO of E-Trade – Sets and monitors corporate risk tolerance levels Portfolio Risk Management Committee (PRMC) – Eleven members – Chaired by the CEO Direct Credit Co
Slide 45: Portfolio Risk Management Committee
45 Portfolio Risk Management Committee • Oversees policies and procedures for evaluation and approval of credit risks • Develops and maintains standards for transaction underwriting - Creation and maintenance of credit policy - Approval process and authority - Due diligence and fraud prevention requ
Slide 46: Key Credit Tenets
46 Key Credit Tenets • Independence and strong oversight - Independent limits - Independent oversight and underwriting committees - Internal ratings of all risks • Stress testing - Historical data is not always predictive - We look for inflection points that may signal changes in future performance
Slide 47: Key Credit Tenets – cont'd
47 Key Credit Tenets – cont’d • Due diligence - On-site due diligence with member of credit staff, often the Chief Credit Officer, in attendance - File reviews as appropriate • Wrapped transactions are evaluated and approved without respect to wrap - Complete transparency to, and approval of, underl
Slide 48: Current Approach to RMBS
48 Current Approach to RMBS First lien seasoned deals: • Foreclosure frequency (FF): - Current bucket – 20% - 30-day delinquent – 65% - 60-day delinquent – 90% - 90-day+, bankruptcy, foreclosure, REO – 100% • Loss severity (LS): - Market value decline - 60% for California, Florida, Nevada and Arizon
Slide 49: Risk Management and Surveillance
Risk Management and Surveillance Andrew Pickering Managing Director and Chief Surveillance Officer
Slide 50: Risk Management and Surveillance Process and Responsibilities
50 Risk Management and Surveillance Process and Responsibilities • Independent reporting structure - Report directly to the CEO - Oversight and review by Portfolio Risk Management Committee and Risk Oversight Committee of the Board - Loss Reserve Committee reviews case reserves - membership comprise
Slide 51: Risk Management Department
51 Risk Management Department Andrew Pickering MD Chief Surv eillance Officer Christopher Mortello MD ABS/MBS Nick Moy MD Public Finance James Wong Director Jonathan Harris Director Robert Heller Director Petra Encarnacion AVP Anthony White Analyst James Lennon VP Phillip Chan AVP Richard Hawkins VP
Slide 52: Portfolio Credit Quality
52 Portfolio Credit Quality • Our overall portfolio credit quality remains strong, with limited exposure to troubled asset classes - No CDO of ABS after 2003 - No direct subprime RMBS below AAA after 2003 - No CDO squareds - $2.3 billion in HELOC exposure, of which 62% is in only two deals; remainde
Slide 53: Pooled Corporate Obligations Exposure
53 Pooled Corporate Obligations Exposure • Transaction performance remains strong overall, and the portfolio is highly rated – 93% rated AAA or super senior, and 99.9% rated AA or higher - Average credit enhancement of 35.2% compared to Moody’s forecast that the speculative grade default rate will r
Slide 54: Trust Preferreds
54 Trust Preferreds • $7.7 billion in the trust preferred category, with $2.6 billion on transactions where the underlying obligors are U.S. real-estate credits • Defaults and rating downgrades on the underlying collateral, primarily mortgage REIT and homebuilders, have put downward pressure on rati
Slide 55: U.S. CMBS Exposure
55 U.S. CMBS Exposure • Transactions performance remains strong overall with 94% of our U.S. CMBS exposure of $5.7 billion rated AAA – 65% of insured collateral was issued prior to 2006 • Delinquencies remain low across all vintages 0.0% 0.0% 21.1% 100.0% 224 2004 0.2% 0.0% 28.8% 100.0% 3,429 2005 0
Slide 56: Closely Monitored Credits (CMC)
56 Closely Monitored Credits (CMC) 1. Assured’s surveillance department is responsible for monitoring the Company’s portfolio of credits and maintains a list of closely monitored credits. The closely monitored credits are divided into four categories: Category 1 (low priority; fundamentally sound, g
Slide 57: Top Ten Non-Investment Grade Exposures
57 Top Ten Non-Investment Grade Exposures As of March 31, 2008; $ in millions Name or Description Segment Weighted Average Remaining Life Net Par Outstanding Average Rating 1 CWHEQ Revolving Home Equity Loan Trust, 2007-D Direct 6.1 736 $ BB Countrywide Home Equity Loan Trust 2005-J Class 1 & 2 Dire
Slide 58: HELOCs Consolidated
58 HELOCs Consolidated • Countrywide-serviced HELOCs comprise approximately 90% of HELOC net par outstanding • The transaction structures include provisions to mitigate the risk and reduce the magnitude of losses. • Assured’s HELOC exposures have experienced increased delinquencies and collateral lo
Slide 59: HELOC Transactions
59 HELOC Transactions • HELOC securitizations in our insured portfolio are typical of many deals in the market and generally contain the following characteristics: - Collateral characteristics: • Revolving home equity lines of credit secured by second lien mortgage on residential property • Primaril
Slide 60: HELOC Transactions
60 HELOC Transactions • Transaction structure - No or modest levels of initial credit enhancement - Credit enhancement provided by excess spread and structural protections - After initial “spread holiday,” over-collateralization (OC) scheduled to build to target level - Losses on the underlying loan
Slide 61: HELOC Transaction Modeling
61 HELOC Transaction Modeling • Key variables and assumptions: - Prepayment speed (CPR): slower repayment speed results in greater excess spread but higher projected defaults on the underlying collateral - We assume that default rates remain high for some period of time, but then decline towards his
Slide 62: Countrywide 2005J – Historical Data
62 Countrywide 2005J – Historical Data 15.4% Total delinquencies (% of current balance) 5.7% Cumulative losses (% of original principal balance) $623.5 Remaining principal balance $1,500.0 Original principal balance $ in millions Transactions Statistics as of May 15, 2008
Slide 63: Countrywide 2005-J Historical Data and Assumptions
63 Countrywide 2005-J Historical Data and Assumptions for Illustrative Example 15.1% 6-months CPR 7.2% 6-months draw rate 14.5% 6-months CDR Conditional default rate: 23.2% 12- months CPR 13.4% 3-months CPR 10.0% 14.3% 1-month CPR Conditional prepayment rate: 8.8% 12- months draw rate 4.4% 3-months
Slide 64: Countrywide 2005-J Illustrative Example of Assumptions
64 Countrywide 2005-J Illustrative Example of Assumptions 9.4% Implied default rate on performing loans 325 Excess spread in bps per year 100.0% Loss severity
Slide 65: Countrywide 2005-J Projected Model Results
65 Countrywide 2005-J Illustrative Example of Projected Model Results $0.0 Discounted insured loss $0.0 Net insured loss $157.9 Total future losses $58.7 Losses from performing loans $99.2 Losses from delinquent loans $212.2 Total future credit enhancement $124.3 Excess spread $88.0 Draws funded by
Slide 66: Countrywide 2005-J Projected Results: Lifetime Performance
66 Countrywide 2005-J Illustrative Example of Projected Results: Lifetime Performance % of total credit enhancement % oforiginal principal balance 1.2x Loss coverage 100.0% 16.2% Total losses ($243.4 million) 24.1% 3.9% Losses from performing loans 6.6% 5.7% of original principal balance 19.9% 8.3%
Slide 67: Countrywide 2005-J Illustrative Cashflow Exhibit
67 Countrywide 2005-J Illustrative Cashflow Exhibit • Materials to be distributed at meeting
Slide 68: Countrywide 2005-J Illustrative Cashflow Exhibit
67 Countrywide 2005-J Illustrative Cashflow Exhibit Claim Summary Through 5/15/08 1 2 3 4 5+ Total Collateral balance (BOP) $1,500 $624 $479 $435 $396 $359 $1,500 Principal payments (1,100) (57) (48) (44) (40) (365) (1,653) Additional draws 309 16 14 13 12 33 397 Charge-offs (86) (104) (9) (9) (8) (
Slide 69: Overview
69 Overview • Capital adequacy and ratings • Financial results • FAS 163
Slide 70: Claims Paying Resources
70 Claims Paying Resources As of March 31, 2008; $ in millions Assured Guaranty Ltd. Claims paying resources Policyholders’ surplus 1,495 $ Contingency reserve 621 Qualified statutory capital 2,117 Unearned premium reserve 1,059 Loss and loss adjustment expense reserves 19 Total policyholders’ surpl
Slide 71: Rating Agency Capital Adequacy
71 Rating Agency Capital Adequacy 1.4x 1.6x-1.7x 1.5x (12/31/07) 1.5x-1.6x (12/31/06) 1.07x (09/30/07) Capital Ratio (date of NPO) 1.4x – 1.5xE 1.7x – 1.8xE 1.5xE 1.6x – 1.7xE 1.05x – 1.10xE Company Estimate for March 31, 2008 Exposure1 1.3x 1.0x Moody’s S&P AA Assured Guaranty Re Ltd. 1.3x 1.25x 1.
Slide 72: First Quarter 2008 Financial Results
72 First Quarter 2008 Financial Results ($ in millions, except per share data) NM = Not meaningful 1. For an explanation of operating income and operating ROE, both non-GAAP financial measures, and a reconciliation of operating income to net income, which is the most comparable GAAP term, please ref
Slide 73: Book Value Per Share Growth Since IPO
73 Book Value Per Share Growth Since IPO Adjusted Book Value1 Per Share 1. For explanations of adjusted book value and net present value of estimated future installment premiums in force, which is a non-GAAP financial measure, please refer to the appendix. 2. The Company’s book value per share as of
Slide 74: Unrealized Losses on Derivatives
74 Unrealized Losses on Derivatives • Accounting presentation for credit derivatives is different from financial guaranty - Credit exposure is the same: claims paid only on principal or interest default • The mark-to-market loss does not reflect actual claims or credit losses - No impact on claims-p
Slide 75: FAS 163: Key Changes
75 FAS 163: Key Changes • FAS 163 addresses accounting for financial guaranty contracts - Contracts accounted for as derivatives are excluded • Changes to earned premium and claim liabilities are effective January 1, 2009 - Will be a one-time cumulative change in accounting principle - No change to
Slide 76: FAS 163: Key Changes
76 FAS 163: Key Changes • Net earned premium algorithm change - Will result in lower earned premium in first few years of an upfront deal and higher earned premium in later years - Minimal difference in installment earned premium - Dollar impact on unearned premium reserve not known at this time; wi
Slide 77: Conclusion
Conclusion Dominic Frederico President & Chief Executive Officer Assured Guaranty Ltd.
Slide 78: Current Opportunity
78 Current Opportunity • Unique market opportunity - Only two companies providing triple triple-A (stable) guarantees in public finance and ABS markets - Attractive pricing environment • Strong capitalization - No rating agency reviews - Proven and committed access to capital markets - Available deb
Slide 79: 2008 Goals
79 2008 Goals • Continue to exercise strict underwriting discipline - No U.S. RMBS in reinsurance segment - No CDOs of ABS or other transactions with embedded leverage • Financial goals - Increase operating return on equity - Maintain additional capital cushion above current rating agency requiremen
Slide 80: Building Earnings through Future Premium Leverage
80 Building Earnings through Future Premium Leverage 0.68x 0.63x 0.79x 0.88x 1.11x 2004 2005 2006 2007 1Q-08 1. 2007 and 1Q-08 GAAP Equity adjusted for mark-to-market losses 2. For an explanation of PVIP, a non-GAAP financial measure, please refer to the appendix. 1 Assured Guaranty Ltd. 2004 – 1Q-0
Slide 81: 2008 Year-to-date Achievements
81 2008 Year-to-date Achievements • Second highest 1Q-08 production in industry, only slightly behind FSA • Proactive capital management • Increased market share Assured Guaranty U.S. Public Finance New Issue Market Share Source: Thomson Financial 40% 3.5% 2.2% 1.5% 6.1% 0.0% 5.0% 10.0% 15.0% 20.0%
Slide 82: Q&A Session
Q&A Session 13] ASSURED GUARANTY"
Slide 83: Appendix
ASSURED GUARANTY’ Appendix
Slide 84: Appendix: Explanation of Non-GAAP Financial Measures
84 Appendix: Explanation of Non-GAAP Financial Measures Adjusted book value, which is a non-GAAP financial measure, is defined as shareholders’ equity (book value) plus the after-tax value of the unearned premium reserve net of prepaid reinsurance premiums, plus the net present value of estimated fu
Slide 85: Appendix: PVP – Reconciliation to Gross Written Premiums
85 Appendix: PVP1 – Reconciliation to Gross Written Premiums2 1. For an explanation of PVP, a non-GAAP financial measure, please refer to the appendix. 2. Some amounts may not add due to rounding. ($ in millions) As reclassifed 2008 2007 2007 Gross written premiums (GWP) analysis: Present value of f
Slide 86: Speaker Biographies
Speaker Biographies
Slide 87: Howard W. Albert
87 Howard W. Albert Managing Director and Chief Credit Officer Assured Guaranty Ltd. Howard Albert is Managing Director and Chief Credit Officer for Assured Guaranty Ltd. with responsibility for overseeing the Company’s underwriting process. Mr. Albert is also Deputy Chief Credit Officer for Assured
Slide 88: Robert A. Bailenson
88 Robert A. Bailenson Managing Director and Chief Accounting Officer Assured Guaranty Ltd. Robert Bailenson has been Managing Director and Chief Accounting Officer at Assured Guaranty Ltd. since May 2005 and has been with Assured Guaranty and its predecessor companies since 1990. In addition to thi
Slide 89: Dominic J. Frederico
89 Dominic J. Frederico President and Chief Executive Officer Assured Guaranty Ltd. Dominic Frederico is President and Chief Executive Officer of Assured Guaranty Ltd., a position he has held since December 2003. Before this appointment, Mr. Frederico was the Chairman of ACE Financial Services, and
Slide 90: Robert B. Mills
90 Robert B. Mills Chief Financial Officer Assured Guaranty Ltd. Robert Mills is Chief Financial Officer of Assured Guaranty Ltd. and of its principal U.S. operating subsidiary, Assured Guaranty Corp. Prior to joining Assured Guaranty in January 2004, Mr. Mills was Managing Director, Chief Financial
Slide 91: Donald L. Paston
91 Donald L. Paston Managing Director and Treasurer Assured Guaranty Corp. Don Paston is Managing Director and Treasurer of Assured Guaranty Corp. Mr. Paston joined Assured Guaranty in 1997. Prior to joining Assured Guaranty, Mr. Paston served as Group Vice President for Duff & Phelps in the financi
Slide 92: David Penchoff
92 David Penchoff President and Chief Operating Officer Assured Guaranty Re Ltd. David Penchoff is the President and Chief Operating Officer of Assured Guaranty Re Ltd. (AG Re). Prior to being appointed to his current role in December 2005, he served as the Chief Underwriting Officer for AG Re, a po
Slide 93: Andrew H. Pickering
93 Andrew H. Pickering Managing Director and Chief Surveillance Officer Assured Guaranty Ltd. Andrew Pickering is Managing Director and Chief Surveillance Officer at Assured Guaranty Ltd. Mr. Pickering joined Assured Guaranty in 1995 as part of the underwriting team and has held various positions wi
Slide 94: Sabra R. Purtill
94 Sabra R. Purtill Managing Director, Global Communications and Investor Relations– Assured Guaranty Ltd. Sabra Purtill is Managing Director of Global Communications and Investor Relations at Assured Guaranty Ltd. Ms. Purtill joined Assured Guaranty in 2004 from ACE Limited, the former parent compa
Slide 95: Michael J. Schozer
95 Michael J. Schozer President Assured Guaranty Corp. Michael Schozer has been President of Assured Guaranty Corp. since December 2003. Prior to joining Assured Guaranty, Mr. Schozer was Managing Director, Structured Finance and Credit Derivatives at Ambac Assurance Corporation (Ambac). He joined A