Fourth Quarter 2023
- GAAP Highlights: Net income attributable to Assured
Guaranty Ltd. (AGL) was $376 million, or $6.40 per share(1), for
fourth quarter 2023. Shareholders’ equity attributable to AGL per
share was $101.63 as of December 31, 2023.
- Non-GAAP Highlights: Adjusted operating income(2) was
$338 million, or $5.75 per share, for fourth quarter 2023. Adjusted
operating shareholders’ equity(2) per share and adjusted book value
(ABV)(2) per share were $106.54 and $155.92, respectively, as of
December 31, 2023.
- New Business: Gross written premiums (GWP) were $136
million for fourth quarter 2023. Present value of new business
production (PVP)(2) was $155 million for fourth quarter 2023.
- Bermuda corporate income tax: The enactment of a new
Bermuda corporate income tax resulted in the establishment of a
deferred tax asset, and corresponding tax benefit to income, of
$189 million.
- Return of Capital to Shareholders: Fourth quarter 2023
capital returned to shareholders was $126 million, consisting of
the repurchase of 1.7 million shares for $109 million, and
dividends of $17 million.
Full Year (FY) 2023
- GAAP Highlights: Net income attributable to AGL was $739
million, or $12.30 per share, for FY 2023.
- Non-GAAP Highlights: Adjusted operating income was $648
million, or $10.78 per share, for FY 2023.
- New Business: GWP were $357 million and PVP was $404
million for FY 2023.
- Sound Point and AHP Transactions(3): Gain
on Sound Point and AHP transactions(3) of $222 million (pre-tax,
net of transaction expenses).
- Return of Capital to Shareholders: FY 2023 capital
returned to shareholders was $267 million, consisting of the
repurchase of 3.2 million shares for $199 million, and dividends of
$68 million.
Assured Guaranty Ltd. (NYSE: AGO) (AGL and, together with its
consolidated entities, Assured Guaranty or the Company) announced
today its financial results for the three-month period ended
December 31, 2023 (fourth quarter 2023) and the year ended December
31, 2023 (FY 2023).
“Finishing with a strong fourth quarter, Assured Guaranty
reported outstanding results for 2023,” said Dominic Frederico,
President and CEO. “Our key per-share measures - GAAP shareholders’
equity, adjusted operating shareholders’ equity and adjusted book
value - each ended the year at a record high. In terms of earnings,
we produced more than six times 2022’s GAAP net income per share
and more than two-and-a-half times that year’s adjusted operating
income per share. Our share price rose by 20% during the year.
“2023 GWP and PVP were $357 million and $404 million,
respectively. Our diversified production strategy continued to
demonstrate its value, as global structured finance produced 73%
more GWP and more than double the PVP it wrote in 2022, reaching
its highest annual direct GWP and PVP amounts in a decade; non-U.S.
public finance saw a 9% annual increase in GWP and a 22% increase
in PVP; and while new issuance volume in the municipal bond market
was relatively low, we led the industry in new-issue insured par
sold with a 61% market share, and U.S. public finance continued to
produce more than half of both annual GWP and PVP.
“During 2023, we completed our strategic transaction with Sound
Point and a separate transaction involving other AssuredIM assets,
which resulted in pre-tax gains for the year of $222 million, net
of expenses. The transaction with Sound Point furthers our asset
management strategy, as we now own approximately 30% of the
combined entity. Additionally, in the fourth quarter, enactment of
a new Bermuda tax law resulted in the establishment of a deferred
tax asset, and corresponding benefit to income of $189
million.”
(1)
All per share information for net income
and adjusted operating income is based on diluted shares.
(2)
Please see “Explanation of Non-GAAP
Financial Measures.”
(3)
Sound Point Capital Management, LP and
certain of its investment management affiliates (Sound Point) and
Assured Healthcare Partners LLC (AHP) transactions closed in July
2023.
Summary Financial
Results
(in millions, except per share
amounts)
Quarter Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
GAAP (1)
Net income (loss) attributable to
AGL
$
376
$
94
$
739
$
124
Net income (loss) attributable to
AGL
per diluted share
$
6.40
$
1.52
$
12.30
$
1.92
Weighted average diluted shares
58.3
61.0
59.6
63.9
Non-GAAP
Adjusted operating income (loss) (2)
$
338
$
14
$
648
$
267
Adjusted operating income per diluted
share (2)
$
5.75
$
0.22
$
10.78
$
4.14
Weighted average diluted shares
58.3
61.0
59.6
63.9
Gain (loss) related to FG VIE and CIV
consolidation(3) included in adjusted operating income
$
9
$
(13
)
$
(21
)
$
(6
)
Gain (loss) related to FG VIE and CIV
consolidation included in adjusted operating income per share
$
0.15
$
(0.22
)
$
(0.35
)
$
(0.10
)
Components of total adjusted operating
income (loss)
Insurance segment
$
339
$
66
$
621
$
413
Asset Management segment
6
(3
)
3
(6
)
Corporate division
(16
)
(36
)
45
(134
)
Other
9
(13
)
(21
)
(6
)
Adjusted operating income (loss)
$
338
$
14
$
648
$
267
As of
December 31, 2023
December 31, 2022
Amount
Per Share
Amount
Per Share
Shareholders’ equity attributable to
AGL
$
5,713
$
101.63
$
5,064
$
85.80
Adjusted operating shareholders’ equity
(2)
5,990
106.54
5,543
93.92
ABV (2)
8,765
155.92
8,379
141.98
Common Shares Outstanding
56.2
59.0
(1)
Generally accepted accounting principles
in the United States of America.
(2)
Please see “Explanation of Non-GAAP
Financial Measures” at the end of this press release.
(3)
The effect of consolidating financial
guaranty variable interest entities (FG VIEs) and consolidated
investment vehicles (CIVs).
GAAP net income in fourth quarter 2023 increased compared with
fourth quarter 2022 net income, primarily due to a $189 million
benefit as a result of the establishment of a deferred tax asset
related to a new Bermuda tax law, lower loss expense, as well as
fair value gains on CIVs and trading securities. GAAP net income in
FY 2023 also benefited from the significant gain associated with
the Sound Point and AHP transactions, foreign exchange gains on
remeasurement, fair value gains on credit derivatives and higher
net investment income, partially offset by lower net earned
premiums accelerations, and higher loss and loss adjustment expense
(LAE).
The tax benefit in fourth quarter 2023 resulted from legislation
enacted in December of 2023 implementing a corporate income tax in
Bermuda beginning in 2025, which affects the Company’s Bermuda
insurance subsidiaries. The new law allows an economic transition
adjustment (ETA) equal to the difference between the fair market
value and the carrying value of assets and liabilities of each of
the Company’s Bermuda insurance subsidiaries as of September 30,
2023. The ETA resulted in the establishment of a deferred tax asset
of $189 million that was reported as a tax benefit in fourth
quarter 2023 GAAP net income and adjusted operating income. The
deferred tax asset is expected to be utilized over 10 to 15 years,
depending on the nature of each component of the deferred tax
asset, beginning in 2025.
On a per share basis, shareholders’ equity attributable to AGL
increased 18.4% during 2023 primarily due to net income and
unrealized gains in the investment portfolio, partially offset by
dividends. On a per share basis, adjusted operating shareholders’
equity increased 13.4% in 2023, and ABV increased 9.8%, primarily
due to adjusted operating income, new business production,
partially offset by loss development and dividends. See “Common
Share Repurchases” on page 12.
Fourth Quarter 2023
Insurance Segment
The Insurance segment primarily consists of the Company’s
insurance subsidiaries that provide credit protection products to
the United States (U.S.) and non-U.S. public finance (including
infrastructure) and structured finance markets.
Insurance Segment
Results
(in millions)
Quarter Ended
December 31,
2023
2022
Segment revenues
Net earned premiums and credit derivative
revenues
$
86
$
111
Net investment income
97
80
Fair value gains (losses) on trading
securities
32
(4
)
Foreign exchange gains (losses) on
remeasurement and other income (loss)
18
6
Total segment revenues
233
193
Segment expenses
Loss expense (benefit)
7
44
Amortization of deferred acquisition costs
(DAC)
3
3
Employee compensation and benefit
expenses
42
41
Other operating expenses
29
24
Total segment expenses
81
112
Equity in earnings (losses) of
investees
22
(5
)
Segment adjusted operating income
(loss) before income taxes
174
76
Less: Provision (benefit) for income
taxes
(165
)
10
Segment adjusted operating income
(loss)
$
339
$
66
Insurance segment adjusted operating income was $339 million in
fourth quarter 2023, compared with $66 million in the three-month
period ended December 31, 2022 (fourth quarter 2022). The increase
was primarily due to the establishment of a deferred tax asset
attributable to Bermuda tax law changes enacted in fourth quarter
2023, lower loss expense, and fair value gains on trading
securities, partially offset by lower net earned premiums and
credit derivative revenues. The components of premiums, losses and
income from the investment portfolio are presented below.
Insurance Segment Net Earned Premiums and Credit Derivative
Revenues
Insurance Segment
Net Earned Premiums and Credit
Derivative Revenues
(in millions)
Quarter Ended
December 31,
2023
2022
Scheduled net earned premiums and credit
derivative revenues
$
83
$
77
Accelerations
3
34
Total
$
86
$
111
Insurance Segment Loss Expense (Benefit) and the Roll Forward of
Expected Losses
Loss expense is a function of net economic loss development
(benefit) and deferred premium revenue.
Insurance Segment
Loss Expense (Benefit)
(in millions)
Quarter Ended
December 31,
2023
2022
Public finance
$
7
$
58
U.S. residential mortgage-backed
securities (RMBS)
(1
)
(16
)
Other structured finance
1
2
Total
$
7
$
44
The table below presents the roll forward of net expected losses
for fourth quarter 2023.
Roll Forward of Net Expected Loss to be Paid
(Recovered)(1)
(in millions)
Net Expected Loss to be Paid
(Recovered) as of September 30, 2023
Net Economic Loss Development
(Benefit)
Net (Paid) Recovered
Losses
Net Expected Loss to be Paid
(Recovered) as of December 31, 2023
Public finance
$
408
$
19
$
(9
)
$
418
U.S. RMBS
38
(4
)
9
43
Other structured finance
44
2
(2
)
44
Total
$
490
$
17
$
(2
)
$
505
(1)
Net economic loss development (benefit)
represents the change in net expected loss to be paid (recovered)
attributable to the effects of changes in the economic performance
of insured transactions, changes in assumptions based on observed
market trends, changes in discount rates, accretion of discount and
the economic effects of loss mitigation efforts, each net of
reinsurance. Net economic loss development (benefit) is the
principal measure that the Company uses to evaluate the loss
experience in its insured portfolio. Expected loss to be paid
(recovered) includes all transactions insured by the Company,
regardless of the accounting model prescribed under GAAP and
without consideration of deferred premium revenue.
The net economic loss development in fourth quarter 2023 of $17
million was mainly attributable to changes in discount rates across
all sectors of $11 million.
Insurance Segment Income from Investment Portfolio
Insurance Segment
Income from Investment
Portfolio
(in millions)
Quarter Ended
December 31,
2023
2022
Net investment income
$
97
$
80
Fair value gains (losses) on trading
securities (1)
32
(4
)
Equity in earnings (losses) of investees
(2)
22
(5
)
Total
$
151
$
71
(1)
Represents contingent value instruments
issued by Puerto Rico that are classified as trading securities
with changes in fair value reported in the consolidated statements
of operations.
(2)
Equity in earnings (losses) of investees
primarily relates to funds managed by Sound Point and AHP, and
certain other managers, as well as, prior to July 1, 2023,
AssuredIM. Investments in funds are reported on a one-quarter
lag.
Net investment income, which represents interest income on
available-for-sale fixed-maturity debt securities and short-term
investments, increased to $97 million in fourth quarter 2023 from
$80 million in fourth quarter 2022, primarily due to higher
short-term interest rates, higher average balances in the
short-term investment portfolio, and accelerated accretion on
certain loss mitigation securities.
Insurance Segment New Business Production
Insurance Segment
New Business
Production
(in millions)
Quarter Ended December
31,
2023
2022
GWP
PVP (1)
Gross Par Written (1)
GWP
PVP (1)
Gross Par Written (1)
Public finance - U.S.
$
82
$
83
$
6,712
$
88
$
94
$
5,819
Public finance - non-U.S.
42
45
874
9
1
—
Structured finance - U.S.
11
26
785
33
40
971
Structured finance - non-U.S.
1
1
304
1
—
245
Total
$
136
$
155
$
8,675
$
131
$
135
$
7,035
(1)
PVP, a non-GAAP financial measure,
measures the value of the Insurance segment’s new business
production for all contracts regardless of form or GAAP accounting
model. See “Explanation of Non-GAAP Financial Measures” at the end
of this press release. PVP and Gross Par Written in the table above
are based on “close date,” when the transaction settles. PVP was
discounted at 4.0% and 2.5% in fourth quarter 2023 and fourth
quarter 2022, respectively.
Total U.S. public finance GWP and PVP both declined in fourth
quarter 2023 compared with fourth quarter 2022 primarily due to a
decline in secondary market activity due to less market opportunity
in 2023 compared with 2022. However, in the primary U.S. public
finance market, GWP increased from $65 million in fourth quarter
2022 to $78 million in fourth quarter 2023, and PVP increased from
$71 million in fourth quarter 2022 to $79 million in fourth quarter
2023. The insured U.S. municipal bond market penetration, based on
par written, was 9.6% in fourth quarter 2023, compared with 8.7% in
fourth quarter 2022.
Non-U.S. public finance GWP and PVP also increased in fourth
quarter 2023 compared with fourth quarter 2022. New business closed
in fourth quarter 2023 included guarantees of transactions in the
airport, university housing, regulated utility and transportation
sectors.
Structured finance GWP and PVP in fourth quarter 2023 was
primarily attributable to insurance securitizations.
Business activity in the non-U.S. public finance and structured
finance sectors often has long lead times and therefore may vary
from period to period.
Asset Management Segment
Upon the effective date of the Sound Point and AHP transactions
in July 2023, the Company participates in the asset management
business through its ownership interest in Sound Point. Sound
Point’s results are reported on a one quarter lag and included in
“equity in earnings (losses) of investees” in the table below. The
Company reported its first quarter of earnings from its interest in
Sound Point in fourth quarter 2023.
Asset Management Segment
Results
(in millions)
Quarter Ended
December 31,
2023
2022
Segment revenues
$
5
$
24
Segment expenses
3
28
Equity in earnings (losses) of
investees
5
—
Segment adjusted operating income
(loss) before income taxes
7
(4
)
Less: Provision (benefit) for income
taxes
1
(1
)
Segment adjusted operating income
(loss)
$
6
$
(3
)
Corporate Division
Corporate Division
Results
(in millions)
Quarter Ended
December 31,
2023
2022
Revenues
Gain on sale of asset management
subsidiaries
$
7
$
—
Other
5
1
Total revenues
12
1
Expenses
Interest expense
26
23
Employee compensation and benefit
expenses
10
10
Other operating expenses
15
6
Total expenses
51
39
Adjusted operating income (loss) before
income taxes
(39
)
(38
)
Less: Provision (benefit) for income
taxes
(23
)
(2
)
Adjusted operating income
(loss)
$
(16
)
$
(36
)
Corporate division adjusted operating loss primarily consists of
interest expense on the debt of Assured Guaranty US Holdings Inc.
and Assured Guaranty Municipal Holdings Inc., as well as other
operating expenses attributed to holding company activities.
In fourth quarter 2023, the Company reported a $7 million
adjustment to the pre-tax gain on the Sound Point transaction and a
$19 million tax benefit attributable to a change in New York State
tax law.
Other (Effect of FG VIE and CIV consolidation)
The effect of consolidating FG VIEs and CIVs was a gain of $9
million in fourth quarter 2023 compared with a loss of $13 million
in fourth quarter 2022.
Reconciliation to GAAP
The following table presents a reconciliation of net income
(loss) attributable to AGL to adjusted operating income (loss).
Reconciliation of Net Income
(Loss) Attributable to AGL to
Adjusted Operating Income
(Loss)
(in millions, except per share
amounts)
Quarter Ended
December 31,
2023
2022
Total
Per Diluted Share
Total
Per Diluted Share
Net income (loss) attributable to
AGL
$
376
$
6.40
$
94
$
1.52
Less pre-tax adjustments:
Realized gains (losses) on investments
6
0.11
(17
)
(0.29
)
Non-credit impairment-related unrealized
fair value gains (losses) on credit derivatives
(3
)
(0.06
)
28
0.47
Fair value gains (losses) on committed
capital securities (CCS)
—
—
12
0.19
Foreign exchange gains (losses) on
remeasurement of premiums receivable and loss and LAE reserves
42
0.71
70
1.13
Total pre-tax adjustments
45
0.76
93
1.50
Less tax effect on pre-tax adjustments
(7
)
(0.11
)
(13
)
(0.20
)
Adjusted operating income (loss)
$
338
$
5.75
$
14
$
0.22
Gain (loss) related to FG VIE and CIV
consolidation included in adjusted operating income
$
9
$
0.15
$
(13
)
$
(0.22
)
Foreign exchange gains in both periods primarily relate to
remeasurement of premiums receivable due to changes in the exchange
rates relative to the U.S. dollar of the pound sterling and, to a
lesser extent, the euro.
Full Year 2023
Insurance Segment
Insurance Segment
Results
(in millions)
Year Ended
December 31,
2023
2022
Segment revenues
Net earned premiums and credit derivative
revenues
$
357
$
508
Net investment income
370
278
Fair value gains (losses) on trading
securities
74
(34
)
Foreign exchange gains (losses) on
remeasurement and other income (loss)
54
5
Total segment revenues
855
757
Segment expenses
Loss expense (benefit)
161
12
Interest expense
—
1
Amortization of DAC
13
14
Employee compensation and benefit
expenses
154
148
Other operating expenses
107
84
Total segment expenses
435
259
Equity in earnings (losses) of
investees
82
(51
)
Segment adjusted operating income
(loss) before income taxes
502
447
Less: Provision (benefit) for income
taxes
(119
)
34
Segment adjusted operating income
(loss)
$
621
$
413
Insurance segment adjusted operating income for FY 2023 was $621
million, compared with $413 million for the year ended December 31,
2022 (FY 2022). The increase was primarily due to the establishment
of a deferred tax asset attributable to changes in Bermuda tax laws
enacted in fourth quarter 2023, and higher income from the
investment portfolio, partially offset by lower net earned premiums
and credit derivative revenues and higher loss expense. The
components of premiums, losses and income from the investment
portfolio are presented below.
Insurance Segment Net Earned Premiums and Credit Derivative
Revenues
Insurance Segment
Net Earned Premiums and Credit
Derivative Revenues
(in millions)
Year Ended
December 31,
2023
2022
Scheduled net earned premiums and credit
derivative revenues
$
327
$
327
Accelerations - Puerto Rico
1
133
Accelerations
29
48
Total
$
357
$
508
Net earned premiums and credit derivative revenues decreased in
FY 2023 primarily due to accelerations in FY 2022 related to
defaulted Puerto Rico exposures that were resolved in 2022.
Insurance Segment Loss Expense (Benefit) and the Roll Forward of
Expected Losses
Insurance Segment
Loss Expense (Benefit)
(in millions)
Year Ended
December 31,
2023
2022
Public finance
$
191
$
128
U.S. RMBS
(36
)
(120
)
Other structured finance
6
4
Total
$
161
$
12
Roll Forward of Net Expected
Loss to be Paid (Recovered)
(in millions)
Net Expected Loss to be Paid
(Recovered) as of December 31, 2022
Economic Loss
Development (Benefit)
Net (Paid) Recovered
Losses
Net Expected Loss to be Paid
(Recovered) as of December 31, 2023
Public finance
$
412
$
212
$
(206
)
$
418
U.S. RMBS
66
(56
)
33
43
Other structured finance
44
8
(8
)
44
Total
$
522
$
164
$
(181
)
$
505
Public finance economic loss development in FY 2023 was $212
million primarily attributable to the Company’s insured exposure to
the Puerto Rico Electric Power Authority. The U.S. RMBS economic
benefit of $56 million was primarily attributable to higher
recoveries for secured second lien charged-off loans and improved
performance of certain transactions, partially offset by loss
development related to the return of certain previously received
funds. The economic development attributable to changes in discount
rates across all sectors was a loss of $3 million in FY 2023.
Insurance Segment Income from Investment Portfolio
Insurance Segment
Income from Investment
Portfolio
(in millions)
Year Ended
December 31,
2023
2022
Net investment income
$
370
$
278
Fair value gains (losses) on trading
securities
74
(34
)
Equity in earnings (losses) of investees
(1)
82
(51
)
Total
$
526
$
193
(1)
Equity in earnings (losses) of investees
relates to funds managed by Sound Point and AHP, and certain other
managers, as well as, prior to July 1, 2023, AssuredIM. Investments
in funds are reported on a one-quarter lag.
Net investment income, which represents interest income on
available-for-sale fixed-maturity debt securities and short-term
investments, increased to $370 million in FY 2023 from $278 million
in FY 2022, primarily due to higher short-term interest rates,
higher average balances in the short-term portfolio, and
accelerated accretion on certain loss mitigation securities.
As of December 31, 2023, the Insurance segment had $729 million
in alternative investments, which had an annualized internal rate
of return of approximately 13.8% for FY 2023.
In the Insurance segment, alternative investments consist
primarily of funds managed by Sound Point, AHP and other managers,
and are generally recorded at net asset value (NAV), with changes
in NAV reported in “equity in earnings (losses) of investees.”
Equity in earnings of investees is more volatile than net
investment income on available-for-sale fixed-maturity securities
and short-term investments. To the extent that the amounts invested
in alternative fund investments increase and available-for-sale
fixed-maturity securities decrease, net investment income may
decline and mark-to-market volatility related to equity in earnings
of investees may increase.
Insurance Segment New Business Production
Insurance Segment
New Business
Production
(in millions)
Year Ended December
31,
2023
2022
GWP
PVP (1)
Gross Par Written
GWP
PVP (1)
Gross Par Written
Public finance - U.S.
$
211
$
212
$
22,464
$
248
$
257
$
19,801
Public finance - non-U.S.
82
83
1,544
75
68
624
Structured finance - U.S.
59
68
1,886
37
43
1,077
Structured finance - non-U.S.
5
41
3,066
—
7
545
Total
$
357
$
404
$
28,960
$
360
$
375
$
22,047
(1)
PVP was discounted at 4.0% and 2.5% in
2023 and 2022, respectively.
Total U.S. public finance GWP and PVP both declined in 2023
compared with 2022 primarily due to a decline in secondary market
GWP and PVP of $71 million due to less market opportunity, offset
in part by an increase in assumed GWP and PVP of $47 million and
$46 million, respectively. Insured U.S. municipal bond market
penetration, based on par written, was 8.8% in FY 2023 compared
with 8.0% in FY 2022. In FY 2023, the Company insured 61% of the
insured par of new issuances sold, compared with 59% in FY
2022.
Non-U.S. public finance GWP and PVP increased in FY 2023
compared with FY 2022. In FY 2023, non-U.S. public finance GWP and
PVP included guarantees of transactions in the airport, university
housing, regulated utility and transportation sector, as well as
guarantees of local authority and social housing transactions.
Structured finance GWP and PVP increased in FY 2023 compared
with FY 2022. FY 2023 structured finance GWP and PVP included
several insurance securitizations and subscription finance facility
transactions. Structured finance PVP in FY 2023 also included a
large specialty business guaranty.
Asset Management Segment
Results in the table below represent (i) revenues (asset
management and performance fees), amortization of intangible assets
and compensation and other operating expenses of AssuredIM for FY
2022 and the first half of 2023, prior to the Sound Point and AHP
transactions, as well as (ii) equity in earnings of Sound Point for
the third quarter of 2023 (Sound Point results are reported on a
one quarter lag), net of the amortization of finite-lived
intangible assets associated with the basis difference in Sound
Point, and (iii) other asset management related income.
Asset Management Segment
Results
(in millions)
Year Ended
December 31,
2023
2022
Segment revenues
$
76
$
112
Segment expenses
78
119
Equity in earnings (losses) of
investees
5
—
Segment adjusted operating income
(loss) before income taxes
3
(7
)
Less: Provision (benefit) for income
taxes
—
(1
)
Segment adjusted operating income
(loss)
$
3
$
(6
)
Corporate Division
Corporate Division
Results
(in millions)
Year Ended
December 31,
2023
2022
Revenues
Gain on sale of asset management
subsidiaries
$
262
$
—
Other
13
4
Total revenues
275
4
Expenses
Interest expense
99
89
Employee compensation and benefit
expenses
38
30
Other operating expenses
79
24
Total expenses
216
143
Adjusted operating income (loss) before
income taxes
59
(139
)
Less: Provision (benefit) for income
taxes
14
(5
)
Adjusted operating income
(loss)
$
45
$
(134
)
Corporate division adjusted operating income in FY 2023 includes
a pre-tax gain resulting from the Sound Point and AHP transactions
of $222 million, which is net of $40 million in transaction costs
(primarily advisory and legal expenses reported in other operating
expenses).
Other operating expenses in FY 2023 also include higher charges
for value added taxes compared with FY 2022. The increase in
interest expense in FY 2023 compared with FY 2022 is primarily due
to interest expense on newly issued 6.125% Senior Notes in August
2023, whose proceeds were used to redeem 5% Senior Notes at the end
of September 2023. FY 2023 also includes a $19 million tax benefit
attributable to a change in New York State tax law.
Other (Effect of FG VIE and CIV consolidation)
The effect of consolidating FG VIEs and CIVs was a loss of $21
million in FY 2023 compared with a loss of $6 million in FY 2022.
Upon closing of the Sound Point and AHP transactions, the Company
was no longer the primary beneficiary of all the collateralized
loan obligations (CLOs), CLO warehouses and an AHP managed fund. As
a result, the Company deconsolidated these vehicles under GAAP,
resulting in a $16 million loss in FY 2023.
Reconciliation to GAAP
The following table presents a reconciliation of net income
(loss) attributable to AGL to adjusted operating income (loss).
Reconciliation of Net Income
(Loss) Attributable to AGL to
Adjusted Operating Income
(Loss)
(in millions, except per share
amounts)
Year Ended
December 31,
2023
2022
Total
Per Diluted Share
Total
Per Diluted Share
Net income (loss) attributable to
AGL
$
739
$
12.30
$
124
$
1.92
Less pre-tax adjustments:
Realized gains (losses) on investments
(14
)
(0.23
)
(56
)
(0.87
)
Non-credit impairment-related unrealized
fair value gains (losses) on credit derivatives
106
1.75
(18
)
(0.27
)
Fair value gains (losses) on CCS
(35
)
(0.57
)
24
0.37
Foreign exchange gains (losses) on
remeasurement of premiums receivable and loss and LAE reserves
51
0.84
(110
)
(1.72
)
Total pre-tax adjustments
108
1.79
(160
)
(2.49
)
Less tax effect on pre-tax adjustments
(17
)
(0.27
)
17
0.27
Adjusted operating income (loss)
$
648
$
10.78
$
267
$
4.14
Gain (loss) related to FG VIE and CIV
consolidation included in adjusted operating income
$
(21
)
$
(0.35
)
$
(6
)
$
(0.10
)
Realized losses on investments in FY 2023 and FY 2022 primarily
relate to credit impairment on loss mitigation securities, and
sales of securities received as part of the resolution for
defaulted Puerto Rico exposures in 2022.
Non-credit impairment-related unrealized fair value gains in FY
2023 were generated primarily as a result of generally lower
collateral asset spreads. Non-credit impairment-related unrealized
fair value losses on credit derivatives in FY 2022 were generated
primarily as a result of wider asset spreads, partially offset by
the increased cost to buy protection on AGL’s indirect subsidiary,
Assured Guaranty Corp., and changes in discount rates.
Fair value losses on CCS in FY 2023 were primarily due to a
tightening in market spreads. Fair value gains on CCS in FY 2022
were primarily driven by an increase in London Interbank Offered
Rate during 2022.
Foreign exchange gains (losses) in FY 2023 and FY 2022 primarily
relate to remeasurement of premiums receivable and are mainly due
to changes in exchange rates relative to the U.S. dollar of the
pound sterling and, to a lesser extent, the euro.
Common Share Repurchases
From the beginning of the repurchase program in 2013 through
February 27, 2024, the Company repurchased a total of 145 million
common shares at an average price of $34.03, representing
approximately 75% of the total shares outstanding. As of February
27, 2024, the Company was authorized to purchase $228 million of
its common shares. These repurchases can be made from time to time
in the open market or in privately negotiated transactions.
Summary of Share
Repurchases
(in millions, except per share
amounts)
Amount
Number of Shares
Average Price Per
Share
2023 (January 1 - March 31)
$
2
0.04
$
62.23
2023 (April 1 - June 30)
24
0.45
53.08
2023 (July 1 - September 30)
64
1.07
59.67
2023 (October 1 - December 31)
109
1.66
65.83
Total 2023
$
199
3.22
61.95
2024 (January 1 - February 27)
$
76
0.95
$
79.98
The timing, form and amount of the share repurchases under the
program are at the discretion of management and will depend on a
variety of factors, including funds available at the parent
company, other potential uses for such funds, market conditions,
the Company’s capital position, legal requirements and other
factors. The repurchase program may be modified, extended or
terminated by the Board of Directors at any time. It does not have
an expiration date.
Financial Statements
Consolidated Statements of
Operations (unaudited)
(in millions)
Quarter Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Revenues
Net earned premiums(1)
$
83
$
109
$
344
$
494
Net investment income
95
78
365
269
Asset management fees
—
22
53
93
Net realized investment gains (losses)
6
(17
)
(14
)
(56
)
Fair value gains (losses) on credit
derivatives
(1
)
31
114
(11
)
Fair value gains (losses) on CCS
—
12
(35
)
24
Fair value gains (losses) on FG VIEs
10
(5
)
8
22
Fair value gains (losses) on CIVs
28
(8
)
88
17
Foreign exchange gains (losses) on
remeasurement
44
69
53
(112
)
Fair value gains (losses) on trading
securities
32
(4
)
74
(34
)
Gain on sale of asset management
subsidiaries
7
—
262
—
Other income (loss)
23
5
61
17
Total revenues
327
292
1,373
723
Expenses
Loss and LAE (benefit)
3
45
162
16
Interest expense
23
21
90
81
Amortization of DAC
3
3
13
14
Employee compensation and benefit
expenses
52
69
251
258
Other operating expenses
47
47
217
167
Total expenses
128
185
733
536
Income (loss) before income taxes and
equity in earnings (losses) of investees
199
107
640
187
Equity in earnings (losses) of
investees
3
(8
)
28
(39
)
Income (loss) before income
taxes
202
99
668
148
Less: Provision (benefit) for income
taxes
(177
)
17
(93
)
11
Net income (loss)
379
82
761
137
Less: Noncontrolling interests
3
(12
)
22
13
Net income (loss) attributable to
AGL
$
376
$
94
$
739
$
124
(1)
FY 2023 net earned premiums were lower
than FY 2022 net earned premiums primarily due to lower premium
accelerations, which were $30 million in FY 2023 compared with $181
million in FY 2022. FY 2022 premium accelerations include $133
million related to defaulted Puerto Rico exposures that were
resolved in 2022.
Consolidated Balance Sheets (unaudited)
(in millions)
As of
December 31, 2023
December 31, 2022
Assets
Investments:
Fixed-maturity securities,
available-for-sale, at fair value
$
6,307
$
7,119
Fixed-maturity securities, trading, at
fair value
318
303
Short-term investments, at fair value
1,661
810
Other invested assets
829
133
Total investments
9,115
8,365
Cash
97
107
Premiums receivable, net of commissions
payable
1,468
1,298
DAC
161
147
Salvage and subrogation recoverable
298
257
FG VIEs’ assets
328
416
Assets of CIVs
366
5,493
Goodwill and other intangible assets
6
163
Other assets
700
597
Total assets
$
12,539
$
16,843
Liabilities
Unearned premium reserve
$
3,658
$
3,620
Loss and LAE reserve
376
296
Long-term debt
1,694
1,675
Credit derivative liabilities, at fair
value
53
163
FG VIEs’ liabilities, at fair value
554
715
Liabilities of CIVs
4
4,625
Other liabilities
435
457
Total liabilities
6,774
11,551
Shareholders’ equity
Common shares
1
1
Retained earnings
6,070
5,577
Accumulated other comprehensive income
(loss)
(359
)
(515
)
Deferred equity compensation
1
1
Total shareholders’ equity attributable
to AGL
5,713
5,064
Nonredeemable noncontrolling interests
52
228
Total shareholders’ equity
5,765
5,292
Total liabilities and shareholders’
equity
$
12,539
$
16,843
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 considered
substitutes for GAAP financial measures. The primary limitation of
non-GAAP financial measures is the potential lack of comparability
to financial measures of other companies, whose definitions of
non-GAAP financial measures may differ from those of the
Company.
The Company believes its presentation of non-GAAP financial
measures provides information that is necessary for analysts to
calculate their estimates of Assured Guaranty’s financial results
in their research reports on Assured Guaranty and for investors,
analysts and the financial news media to evaluate Assured
Guaranty’s financial results.
GAAP requires the Company to consolidate entities where it is
deemed to be the primary beneficiary which include:
- FG VIEs, which the Company does not own and where its exposure
is limited to its obligation under the financial guaranty insurance
contract, and
- CIVs in which certain subsidiaries invest.
The Company discloses the effect of FG VIE and CIV consolidation
that is embedded in each non-GAAP financial measure, as applicable.
The Company believes this information may also be useful to
analysts and investors evaluating Assured Guaranty’s financial
results. In the case of both the consolidated FG VIEs and the CIVs,
the economic effect on the Company of each of the consolidated FG
VIEs and CIVs is reflected primarily in the results of the
Insurance segment.
Management of the Company and AGL’s Board of Directors use
non-GAAP financial measures further adjusted to remove the effect
of FG VIE and CIV consolidation (which the Company refers to as its
core financial measures), as well as GAAP financial measures and
other factors, to evaluate the Company’s results of operations,
financial condition and progress towards long-term goals. The
Company uses core financial measures in its decision-making process
for and in its calculation of certain components of management
compensation. The financial measures that the Company uses to help
determine compensation are: (1) adjusted operating income, further
adjusted to remove the effect of FG VIE and CIV consolidation; (2)
adjusted operating shareholders’ equity, further adjusted to remove
the effect of FG VIE and CIV consolidation; (3) adjusted book value
per share, further adjusted to remove the effect of FG VIE and CIV
consolidation; and (4) PVP.
Management believes that many investors, analysts and financial
news reporters use adjusted operating shareholders’ equity and/or
adjusted book value, each further adjusted to remove the effect of
FG VIE and CIV consolidation, as the principal financial measures
for valuing AGL’s current share price or projected share price and
also as the basis of their decision to recommend, buy or sell AGL’s
common shares. Management also believes that many of the Company’s
fixed income investors also use adjusted operating shareholders’
equity, further adjusted to remove the effect of FG VIE and CIV
consolidation, to evaluate the Company’s capital adequacy.
Adjusted operating income, further adjusted for the effect of FG
VIE and CIV consolidation, enables investors and analysts to
evaluate the Company’s financial results in comparison with the
consensus analyst estimates distributed publicly by financial
databases.
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 and the most
directly comparable GAAP financial measure is presented below.
Adjusted Operating Income
Management believes that adjusted operating income is a useful
measure because it clarifies the understanding of the operating
results of the Company. Adjusted operating income is defined as net
income (loss) attributable to AGL, as reported under GAAP, adjusted
for the following:
1) Elimination of realized gains (losses) on
the Company’s investments, except for gains and losses on
securities classified as trading. The timing of realized gains and
losses, which depends largely on market credit cycles, can vary
considerably across periods. The timing of sales is largely subject
to the Company’s discretion and influenced by market opportunities,
as well as the Company’s tax and capital profile.
2) Elimination of non-credit
impairment-related unrealized fair value gains (losses) on credit
derivatives that are recognized in net income, which is the amount
of unrealized fair value gains (losses) in excess of the present
value of the expected estimated economic credit losses, and
non-economic payments. Such fair value adjustments are heavily
affected by, and in part fluctuate with, changes in market interest
rates, the Company’s credit spreads, and other market factors and
are not expected to result in an economic gain or loss.
3) Elimination of fair value gains (losses)
on the Company’s CCS that are recognized in net income. Such
amounts are affected by changes in market interest rates, the
Company’s credit spreads, price indications on the Company’s
publicly traded debt and other market factors and are not expected
to result in an economic gain or loss.
4) Elimination of foreign exchange gains
(losses) on remeasurement of net premium receivables and loss and
LAE reserves that are recognized in net income. Long-dated
receivables and loss and LAE reserves represent the present value
of future contractual or expected cash flows. Therefore, the
current period’s foreign exchange remeasurement gains (losses) are
not necessarily indicative of the total foreign exchange gains
(losses) that the Company will ultimately recognize.
5) Elimination of the tax effects related to
the above adjustments, which are determined by applying the
statutory tax rate in each of the jurisdictions that generate these
adjustments.
See “Reconciliation to GAAP” above for a reconciliation of net
income (loss) attributable to AGL to adjusted operating income
(loss).
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 that are not expected to
result in economic gain or loss.
Adjusted operating shareholders’ equity is defined as
shareholders’ equity attributable to AGL, as reported under GAAP,
adjusted for the following:
1) Elimination of non-credit
impairment-related unrealized fair value gains (losses) on credit
derivatives, which is the amount of unrealized fair value gains
(losses) in excess of the present value of the expected estimated
economic credit losses, and non-economic payments. Such fair value
adjustments are heavily affected by, and in part fluctuate with,
changes in market interest rates, credit spreads and other market
factors and are not expected to result in an economic gain or
loss.
2) Elimination of fair value gains (losses)
on the Company’s CCS. Such amounts are affected by changes in
market interest rates, the Company’s credit spreads, price
indications on the Company’s publicly traded debt and other market
factors and are not expected to result in an economic gain or
loss.
3) Elimination of unrealized gains (losses)
on the Company’s investments that are recorded as a component of
accumulated other comprehensive income (AOCI). The AOCI component
of the fair value adjustment on the investment portfolio is not
deemed economic because the Company generally holds these
investments to maturity and therefore would not recognize an
economic gain or loss.
4) Elimination of the tax effects related to
the above adjustments, which are determined by applying the
statutory tax rate in each of the jurisdictions that generate these
adjustments.
Management uses adjusted book value, further adjusted to remove
the effect of FG VIE and CIV consolidation, to measure the
intrinsic value of the Company, excluding franchise value. Adjusted
book value per share, further adjusted for FG VIE and CIV
consolidation (core adjusted book value), is one of the key
financial measures used in determining the amount of certain
long-term compensation elements to management and employees and
used by rating agencies and investors. Management believes that
adjusted book value is a useful measure because it enables an
evaluation of the Company’s in-force premiums and revenues net of
expected losses. Adjusted book value is adjusted operating
shareholders’ equity, as defined above, further adjusted for the
following:
1) Elimination of deferred acquisition costs,
net. These amounts represent net deferred expenses that have
already been paid or accrued and will be expensed in future
accounting periods.
2) Addition of the net present value of
estimated net future revenue. See below.
3) Addition of the deferred premium revenue
on financial guaranty contracts in excess of expected loss to be
expensed, net of reinsurance. This amount represents the present
value of the expected future net earned premiums, net of the
present value of expected losses to be expensed, which are not
reflected in GAAP equity.
4) Elimination of the tax effects related to
the above adjustments, which are determined by applying the
statutory tax rate in each of the jurisdictions that generate these
adjustments.
The unearned premiums and revenues included in adjusted book
value will be earned in future periods, but actual earnings may
differ materially from the estimated amounts used in determining
current adjusted book value due to changes in foreign exchange
rates, prepayment speeds, terminations, credit defaults and other
factors.
Reconciliation of
Shareholders’ Equity Attributable to AGL to
Adjusted Operating
Shareholders’ Equity and ABV
(in millions, except per share
amounts)
As of
December 31, 2023
December 31, 2022
Total
Per Share
Total
Per Share
Shareholders’ equity attributable to
AGL
$
5,713
$
101.63
$
5,064
$
85.80
Less pre-tax adjustments:
Non-credit impairment-related unrealized
fair value gains (losses) on credit derivatives
34
0.61
(71
)
(1.21
)
Fair value gains (losses) on CCS
13
0.22
47
0.80
Unrealized gain (loss) on investment
portfolio
(361
)
(6.40
)
(523
)
(8.86
)
Less taxes
37
0.66
68
1.15
Adjusted operating shareholders’
equity
5,990
106.54
5,543
93.92
Pre-tax adjustments:
Less: DAC
161
2.87
147
2.48
Plus: Net present value of estimated net
future revenue
199
3.54
157
2.66
Plus: Net deferred premium revenue on
financial guaranty contracts in excess of expected loss to be
expensed
3,436
61.12
3,428
58.10
Plus taxes
(699
)
(12.41
)
(602
)
(10.22
)
ABV
$
8,765
$
155.92
$
8,379
$
141.98
Gain (loss) related to FG VIE and CIV
consolidation included in:
Adjusted operating shareholders’
equity
$
5
$
0.07
$
17
$
0.28
ABV
—
—
11
0.19
Shares outstanding at the end of the
period
56.2
59.0
Net Present Value of Estimated Net Future Revenue
Management believes that this amount is a useful measure because
it enables an evaluation of the present value of estimated net
future revenue for non-financial guaranty insurance contracts. This
amount represents the net present value of estimated future revenue
from these contracts (other than credit derivatives with net
expected losses), net of reinsurance, ceding commissions and
premium taxes.
Future installment premiums are discounted at the approximate
average pre-tax book yield of fixed-maturity securities purchased
during the prior calendar year, other than Loss Mitigation
Securities. The discount rate is recalculated annually and updated
as necessary. Net present value of estimated future revenue for an
obligation may change from period to period due to a change in the
discount rate or due to a change in estimated net future revenue
for the obligation, which may change due to changes in foreign
exchange rates, prepayment speeds, terminations, credit defaults or
other factors that affect par outstanding or the ultimate maturity
of an obligation. There is no corresponding GAAP financial
measure.
PVP or Present Value of New Business Production
Management believes that PVP is a useful measure because it
enables the evaluation of the value of new business production in
the Insurance segment by taking into account the value of estimated
future installment premiums on all new contracts underwritten in a
reporting period as well as additional installment premiums and
fees on existing contracts (which may result from supplements or
fees or from the issuer not calling an insured obligation the
Company projected would be called), regardless of form, which
management believes GAAP gross written premiums and changes in fair
value of credit derivatives do not adequately measure. PVP in
respect of contracts written in a specified period is defined as
gross upfront and installment premiums received and the present
value of gross estimated future installment premiums.
Future installment premiums are discounted at the approximate
average pre-tax book yield of fixed-maturity securities purchased
during the prior calendar year, other than certain fixed-maturity
securities such as Loss Mitigation Securities. The discount rate is
recalculated annually and updated as necessary. Under GAAP,
financial guaranty installment premiums are discounted at a
risk-free rate. Additionally, under GAAP, management records future
installment premiums on financial guaranty insurance contracts
covering non-homogeneous pools of assets based on the contractual
term of the transaction, whereas for PVP purposes, management
records an estimate of the future installment premiums the Company
expects to receive, which may be based upon a shorter period of
time than the contractual term of the transaction.
Actual installment premiums may differ from those estimated in
the Company’s PVP calculation due to factors including, but not
limited to, changes in foreign exchange rates, prepayment speeds,
terminations, credit defaults, or other factors that affect par
outstanding or the ultimate maturity of an obligation.
Reconciliation of GWP to
PVP
(in millions)
Quarter Ended December 31,
2023
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
82
$
42
$
11
$
1
$
136
Less: Installment GWP and other GAAP
adjustments (1)
54
37
11
1
103
Upfront GWP
28
5
—
—
33
Plus: Installment premiums and other
(2)
55
40
26
1
122
PVP
$
83
$
45
$
26
$
1
$
155
Quarter Ended December 31,
2022
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
88
$
9
$
33
$
1
$
131
Less: Installment GWP and other GAAP
adjustments(1)
40
9
29
1
79
Upfront GWP
48
—
4
—
52
Plus: Installment premiums and other
(2)
46
1
36
—
83
PVP
$
94
$
1
$
40
$
—
$
135
Year Ended December 31,
2023
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
211
$
82
$
59
$
5
$
357
Less: Installment GWP and other GAAP
adjustments(1)
109
74
59
5
247
Upfront GWP
102
8
—
—
110
Plus: Installment premiums and other
(2)
110
75
68
41
294
PVP
$
212
$
83
$
68
$
41
$
404
Year Ended December 31,
2022
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
248
$
75
$
37
$
—
$
360
Less: Installment GWP and other GAAP
adjustments(1)
40
75
30
—
145
Upfront GWP
208
—
7
—
215
Plus: Installment premiums and other
(2)
49
68
36
7
160
PVP
$
257
$
68
$
43
$
7
$
375
(1)
Includes the present value of new business
on installment policies discounted at the prescribed GAAP discount
rates, GWP adjustments on existing installment policies due to
changes in assumptions and other GAAP adjustments.
(2)
Includes the present value of future
premiums and fees on new business paid in installments discounted
at the approximate average pre-tax book yield of fixed-maturity
securities purchased during the prior calendar year, other than
certain fixed-maturity securities such as Loss Mitigation
Securities. The years 2023 and 2022 also include the present value
of future premiums and fees associated with other guaranties
written by the Company that, under GAAP, are accounted for under
Accounting Standards Codification (ASC) 460, Guarantees.
Conference Call and Webcast Information
The Company will host a conference call for investors at 8:00
a.m. Eastern Time (9:00 a.m. Atlantic Time) on Wednesday, February
28, 2024. The conference call will be available via live webcast in
the Investor Information section of the Company’s website at
AssuredGuaranty.com or by dialing 1-833-470-1428 (in the U.S.) or
1-404-975-4839 (International); the access code is 091734.
A replay of the conference call will be available approximately
three hours after the call ends. The webcast replay will be
available for 90 days in the Investor Information section of the
Company’s website at AssuredGuaranty.com and the telephone replay
will be available for 30 days by dialing 1-866-813-9403 (in the
U.S.) or 1-929-458-6194 (International); the access code is
340952.
Please refer to Assured Guaranty’s December 31, 2023 Financial
Supplement, which is posted on the Company's website at
assuredguaranty.com/agldata, for more information on the Company’s
financial guaranty portfolio, investment portfolio and other items.
In addition, the Company is posting at
assuredguaranty.com/presentations its “December 31, 2023 Equity
Investor Presentation.”
The Company plans to post by early next week on its website at
assuredguaranty.com/agldata the following:
- “Public Finance Transactions in 4Q 2023,” which lists the U.S.
public finance new issues insured by the Company in fourth quarter
2023, and
- “Structured Finance Transactions at December 31, 2023,” which
lists the Company’s structured finance exposure as of that
date.
In addition, the Company will post on its website, when
available, the Company’s separate-company subsidiary financial
supplements and its “Fixed Income Presentation” for the current
quarter. Those documents will be furnished to the Securities and
Exchange Commission in a Current Report on Form 8-K.
Assured Guaranty Ltd. is a publicly traded (NYSE: AGO),
Bermuda-based holding company. Through its subsidiaries, Assured
Guaranty provides credit enhancement products to the U.S. and
international public finance, infrastructure and structured finance
markets. Assured Guaranty also participates in the asset management
business through its ownership interest in Sound Point. More
information on Assured Guaranty Ltd. 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 the Company’s 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 Act of 1995.
Such statements involve risks and uncertainties that may cause
actual results to differ materially from those set forth in these
statements. Among factors that could cause actual results to differ
adversely are: (1) significant changes in inflation, interest
rates, the world’s credit markets or segments thereof, credit
spreads, foreign exchange rates or general economic conditions,
including the possibility of a recession or stagflation; (2)
geopolitical risk, including Russia’s invasion of Ukraine and risk
of intentional or accidental escalation between The North Atlantic
Treaty Organization (NATO) and Russia, conflict in the Middle East,
confrontation over Iran’s nuclear program, United States (U.S.) –
China strategic competition and pursuit of technological
independence; (3) global terrorism risk with threats increasing
from conflicts in the Middle East and Ukraine/Russia, and the
polarized political environment of the 2024 U.S. presidential
election; (4) the impacts of artificial intelligence, machine
learning and other technological advances, including potentially
increasing the risks of malicious cyber attacks, dissemination of
misinformation, and disruption of markets; (5) the possibility of a
U.S government shutdown, payment defaults on the debt of the U.S.
government or instruments issued, insured or guaranteed by related
institutions, agencies or instrumentalities, and downgrades to
their credit ratings; (6) public health crises, including pandemics
and endemics, and the governmental and private actions taken in
response to such events; (7) developments in the world’s financial
and capital markets, including stresses in the financial condition
of banking institutions in the U.S., that adversely affect
repayment rates of insured obligors, Assured Guaranty’s insurance
loss or recovery experience, or investments of Assured Guaranty;
(8) reduction in the amount of available insurance opportunities
and/or in the demand for Assured Guaranty’s insurance; (9) the
possibility that budget or pension shortfalls or other factors will
result in credit losses or liquidity claims on obligations of
state, territorial and local governments and their related
authorities and public corporations that Assured Guaranty insures
or reinsures; (10) insured losses, including losses with respect to
related legal proceedings, in excess of those expected by Assured
Guaranty or the failure of Assured Guaranty to realize loss
recoveries that are assumed in its expected loss estimates for
insurance exposures, including as a result of the final resolution
of Assured Guaranty’s Puerto Rico Electric Power Authority exposure
or the amounts recovered on securities received in connection with
the resolution of Puerto Rico exposures already resolved; (11) the
impact of the Company satisfying its obligations under insurance
policies with respect to legacy insured Puerto Rico bonds; (12)
increased competition, including from new entrants into the
financial guaranty industry, nonpayment insurance and other forms
of capital saving or risk syndication available to banks and
insurers; (13) the possibility that investments made by Assured
Guaranty for its investment portfolio, including alternative
investments, do not result in the benefits anticipated or subject
Assured Guaranty to reduced liquidity at a time it requires
liquidity, or to other negative or unanticipated consequences; (14)
the impacts of Assured Guaranty’s transactions with Sound Point
Capital Management, LP (Sound Point, LP) and certain of its
investment management affiliates (together with Sound Point, LP,
Sound Point) and/or Assured Healthcare Partners LLC (AHP) on
Assured Guaranty and its relationships with its shareholders,
regulators, rating agencies, employees and the obligors it insures
and on the asset management business contributed to Sound Point, LP
and on the business of AHP and their relationships with their
respective clients and employees; (15) the possibility that
strategic transactions made by Assured Guaranty, including the
consummation of the transactions with Sound Point and/or AHP, do
not result in the benefits anticipated or subject Assured Guaranty
to negative consequences; (16) the inability to control the
business, management or policies of entities in which the Company
holds a minority interest; (17) the impact of market volatility on
the fair value of Assured Guaranty’s assets and liabilities subject
to mark-to-market, including certain of its investments, contracts
accounted for as derivatives, its committed capital securities, its
consolidated investment vehicles and certain consolidated variable
interest entities (VIEs); (18) rating agency action, including a
ratings downgrade, a change in outlook, the placement of ratings on
watch for downgrade, or a change in rating criteria, at any time,
of AGL or any of its insurance subsidiaries, and/or of any
securities AGL or any of its subsidiaries have issued, and/or of
transactions that AGL’s insurance subsidiaries have insured; (19)
the inability of Assured Guaranty to access external sources of
capital on acceptable terms; (20) changes in applicable accounting
policies or practices; (21) changes in applicable laws or
regulations, including insurance, bankruptcy and tax laws, or other
governmental actions; (22) difficulties with the execution of
Assured Guaranty’s business strategy; (23) loss of key personnel;
(24) the effects of mergers, acquisitions and divestitures; (25)
natural or man-made catastrophes; (26) the impact of climate change
on Assured Guaranty’s business and regulatory actions taken related
to such risk; (27) other risk factors identified in AGL’s filings
with the U.S. Securities and Exchange Commission (SEC); (28) other
risks and uncertainties that have not been identified at this time;
and (29) management’s response to these factors. Readers are
cautioned not to place undue reliance on these forward-looking
statements. These forward-looking statements are made as of
February 27, 2024, and Assured Guaranty undertakes no obligation to
update publicly or review any forward-looking statement, whether as
a result of new information, future developments or otherwise,
except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240226227295/en/
Robert Tucker Senior Managing Director, Investor Relations and
Corporate Communications 212-339-0861
rtucker@agltd.com
Ashweeta Durani Vice President, Media Relations 212-408-6042
adurani@agltd.com
Grafico Azioni Assured Guaranty Municipal (NYSE:AGO)
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Grafico Azioni Assured Guaranty Municipal (NYSE:AGO)
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