Assured Guaranty Ltd. Files 10-Q for Q2 2024

TL;DR

**AGLD Q2 10-Q OUT: Debt maturities noted, financial update filed.**

AI Summary

Assured Guaranty Ltd. filed its 10-Q for the period ending June 30, 2024. The company, a surety insurer, reported financial results and business activities. Key financial instruments mentioned include various senior notes issued by Assured Guaranty US Holdings Inc., with maturities ranging from 2028 to 2051.

Why It Matters

This filing provides investors with an update on Assured Guaranty's financial health and operational status, including details on its debt instruments.

Risk Assessment

Risk Level: medium — The filing details various senior notes, indicating a level of financial leverage and associated risks.

Key Numbers

• 20240630 — Reporting Period End Date (Indicates the end of the fiscal quarter for this filing.)
• 20240808 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• Assured Guaranty Ltd. (company) — Filer of the 10-Q
• Assured Guaranty US Holdings Inc. (company) — Issuer of senior notes
• 30 Woodbourne Ave, Hamilton Bermuda (location) — Company's business and mailing address
• 2028 (date) — Maturity year for senior notes
• 2031 (date) — Maturity year for senior notes
• 2051 (date) — Maturity year for senior notes

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Shares $0.01 par value per share AGO New York Stock

Filing Documents

• ago-20240630.htm (10-Q) — 5218KB
• ago-06302024x10qex220.htm (EX-22) — 14KB
• ago-06302024x10qex311.htm (EX-31.1) — 12KB
• ago-06302024x10qex312.htm (EX-31.2) — 12KB
• ago-06302024x10qex321.htm (EX-32.1) — 6KB
• ago-06302024x10qex322.htm (EX-32.2) — 6KB
• ago-20240630_g1.jpg (GRAPHIC) — 277KB
• 0001273813-24-000045.txt ( ) — 26005KB
• ago-20240630.xsd (EX-101.SCH) — 153KB
• ago-20240630_cal.xml (EX-101.CAL) — 157KB
• ago-20240630_def.xml (EX-101.DEF) — 784KB
• ago-20240630_lab.xml (EX-101.LAB) — 1373KB
• ago-20240630_pre.xml (EX-101.PRE) — 1040KB
• ago-20240630_htm.xml (XML) — 6261KB

Financial Statements

Financial Statements: 1 Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2024 and December 31, 2023 1 Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 2 Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 3 Condensed Consolidated Statements of Shareholders' Equity (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 4 Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2024 and 2023 6 Notes to Condensed Consolidated Financial Statements (Unaudited) 8 1. Business and Basis of Presentation 8 2. Segment Information 10 3. Outstanding Exposure 15 4. Expected Loss to be Paid (Recovered) 24 5. Contracts Accounted for as Insurance 32 6. Contracts Accounted for as Credit Derivatives 38 7. Investments 40 8. Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles 45 9. Fair Value Measurement 49 10. Income Taxes 62 11. Contingencies 65 12. Shareholders' Equity 66 13. Earnings Per Share 69 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 70

Forward Looking Statements

Forward Looking Statements 70 Available Information 71 Overview 71

Business

Business 71 Economic Environment 72 Key Business Strategies 73 Executive Summary 76 Financial Performance of Assured Guaranty 77 Other Matters 80 Results of Operations 80 Critical Accounting Estimates 80 Results of Operations by Segment 81 Insurance Segment 81 Asset Management Segment 90 Corporate 90 Other 90 Reconciliation to GAAP 93 Non-GAAP Financial Measures 95 Insured Portfolio 99 Liquidity and Capital Resources 102 AGL and its U.S. Holding Companies 102 Insurance Subsidiaries 106 Investment Portfolio 109 Lease Obligations 112 Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles 112 Condensed Consolidated Cash Flows 113 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 114 Item 4.

Controls and Procedures

Controls and Procedures 114 PART II Other Information 115 Item 1.

Legal Proceedings

Legal Proceedings 115 Item 1A.

Risk Factors

Risk Factors 115 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 115 Item 5. Other Matters 115 Item 6. Exhibits 116

Signatures

Signatures 117 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Assured Guaranty Ltd. Condensed Consolidated Balance Sheets (Unaudited) (dollars in millions except share data) As of June 30, 2024 December 31, 2023 Assets Investments: Fixed-maturity securities, available-for-sale, at fair value, net of allowance for credit loss of $ 69 and $ 77 (amortized cost of $ 6,478 and $ 6,746 ) $ 6,006 $ 6,307 Fixed-maturity securities, trading, at fair value 221 318 Short-term investments, at fair value 1,717 1,661 Other invested assets (includes $ 4 and $ 3 , at fair value) 882 829 Total investments 8,826 9,115 Cash 92 97 Premiums receivable, net of commissions payable 1,472 1,468 Deferred acquisition costs 169 161 Salvage and subrogation recoverable 293 298 Financial guaranty variable interest entities' assets (includes $ 160 and $ 174 , at fair value) 160 328 Assets of consolidated investment vehicles (includes $ 357 and $ 331 , at fair value) 378 366 Other assets (includes $ 125 and $ 123 , at fair value) 698 706 Total assets $ 12,088 $ 12,539 Liabilities Unearned premium reserve $ 3,662 $ 3,658 Loss and loss adjustment expense reserve 294 376 Long-term debt 1,696 1,694 Credit derivative liabilities, at fair value 38 53 Financial guaranty variable interest entities' liabilities, at fair value (with recourse $ 383 and $ 543 , without recourse $ 10 and $ 11 ) 393 554 Other liabilities 410 439 Total liabilities 6,493 6,774 Commitments and contingencies (Notes 3, 7 and 11) Shareholders' equity Common shares ($ 0.01 par value, 500,000,000 shares authorized; 53,185,707 and 56,217,305 shares issued and outstanding) 1 1 Retained earnings 5,929 6,070 Accumulated other comprehensive income (loss), net of tax of $( 75 ) and $( 67 ) ( 392 ) ( 359 ) Deferred equity compensation 1 1 Total shareholders' equity attributable to Assured Guaranty Ltd. 5,539 5,713 Nonredeemable noncontrolling interests (Note 8) 56 52 Total shareholders' equity 5,595 5,765 Total liabilities a

Business

Business Assured Guaranty Ltd. (AGL and, together with its subsidiaries, Assured Guaranty or the Company) is a Bermuda-based holding company that provides, through its wholly owned operating subsidiaries, credit protection products to the United States (U.S.) and non-U.S. public finance (including infrastructure) and structured finance markets. Assured Guaranty also participates in the asset management business. Insurance Through its insurance subsidiaries, the Company applies its credit underwriting judgment, risk management skills and capital markets experience primarily to offer financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. If an obligor defaults on a scheduled payment due on an obligation, including a scheduled principal or interest payment (collectively, debt service), the Company is required under its unconditional and irrevocable financial guaranty to pay the amount of the shortfall to the holder of the obligation. The Company markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities as well as to investors in such obligations. The Company guarantees obligations issued principally in the U.S. and the United Kingdom (U.K.), and also guarantees obligations issued in other countries and regions, including Western Europe. The Company also provides specialty insurance and reinsurance on transactions with risk profiles similar to those of its structured finance exposures written in financial guaranty form. Asset Management Until July 1, 2023, the Company served as an investment advisor to primarily collateralized loan obligations (CLOs) and opportunity funds, through Assured Investment Management LLC (AssuredIM LLC) and its investment management affiliates (together with AssuredIM LLC, AssuredIM). Beginning July 1, 2023, the Company participates in the asset management business through its own

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