Assured Guaranty 2010 1st Quarter Raises 41%

May 11, 2010

Bermuda based Assured Guaranty Ltd reported $89.6 million operating income for the first quarter of 2010, a 41% increase from $63.4 million for the same period last year.

The July 1, 2009 acquisition of Financial Security Assurance Holdings Ltd., which has now been renamed Assured Guaranty Municipal Holdings Inc. [AGMH], is the principal reason for the growth in Assured Guaranty’s first quarter operating income. The acquisition of AGMH added significantly to the Company’s financial resources, including its investment portfolio, unearned premium reserve, claims-paying resources and personnel.

First quarter 2010 net income per diluted share was $1.69, an 82% increase from $0.93 per diluted share in first quarter 2009. First quarter 2010 net income benefited from $230.8 million of after-tax non-credit impairment unrealized fair value gains on credit derivatives ($1.21 per diluted share), as compared to $26.4 million ($0.29 per diluted share) in first quarter 2009.

Assured Guaranty President and CEO Dominic Frederico said:

We recorded positive operating earnings this quarter, despite continued losses primarily related to the insured residential mortgage-backed portfolio. Our embedded earnings power derived from the AGMH Acquisition combined with the existing earnings models of Assured Guaranty Corp. and Assured Guaranty Re provides us with substantial financial stability, which is critical to our ongoing business.

With regard to the additional mortgage losses,early stage delinquencies showed some signs of improvement. However, we decided to extend the conditional default rate for another three months until we see more sustained improvement in RMBS performance.

We have also intensified our loss mitigation efforts, which we see as both strategically important and as a further opportunity to lower our loss costs and enhance earnings.

Other 2010 first quarter results of Bermuda based companies here.

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