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KBRA Affirms Assured Guaranty AA+ Insurance Financial Strength Ratings with Stable Outlook

Business Wire 22-Oct-2024 1:10 PM

Assured Guaranty Ltd. (NYSE:AGO) (together with its subsidiaries, Assured Guaranty) announced that Kroll Bond Rating Agency, LLC (KBRA) has affirmed the AA+ insurance financial strength ratings of Assured Guaranty Inc. (AG) and AG's U.K. and European subsidiaries, Assured Guaranty UK Limited (AGUK) and Assured Guaranty (Europe) SA (AGE). All the ratings have Stable Outlooks.

In its October surveillance report affirming the AA+ ratings of AG and its U.K. and European subsidiaries, KBRA wrote:

  • "AG's rating reflects its strong capital position and substantial claims-paying resources relative to conservative stress scenario losses."
  • "AG's diversified underwriting platform, focused on public finance, international infrastructure, and structured finance continues to strengthen its market presence."
  • "The platform-wide expertise of Assured Guaranty Ltd. (AGL) and its subsidiaries (collectively, Assured) in surveillance and work-outs helps mitigate credit risk and limit losses while growing its insured portfolio. The portfolio consists mainly of long-term obligations, reducing loss exposure during downturns."
  • "KBRA views new business opportunities for AG's diversified underwriting platform as strong, noting its solid market position. High-profile municipal defaults and events like the COVID-19 pandemic and severe hurricanes have heightened awareness of the benefits of financial guaranty products."
  • "Further market volatility or a sustained widening of credit spreads may further increase demand as issuers seek lower borrowing costs or investors explore other forms of regulatory capital relief. Institutional demand has increased, evidenced by more insured transactions exceeding $100 million in par, and Assured's combined platform and balance sheet have expanded its large deal capacity."

Commenting on the August 1, 2024, merger of Assured Guaranty Municipal Corp. into Assured Guaranty Inc., KBRA stated, "The merger streamlined the organizational structure, improved operational and regulatory efficiencies, and strengthened AG's market position across its public finance, infrastructure, and structured finance businesses."

"We are pleased with KBRA's affirmation of our AA+ (Stable Outlook) rating for AG and its European subsidiaries, recognizing our strong capital position and claims-paying resources," said Dominic Frederico, President and CEO of Assured Guaranty. "Over the last four years, we have seen a greater awareness in the market of the benefits of our financial guaranty product. Demand for our insurance has grown as issuers seek to reduce their borrowing costs, investors increasingly look for additional protection from known and unforeseen circumstances, and institutions seek more efficient ways to manage their risk and capital. As KBRA stated, ‘with our experienced management team and robust risk management platform,' we are well positioned for future growth."

Any forward-looking statements made in this press release, including those regarding growth opportunities for Assured Guaranty, demand for its product, and sustained economic conditions for increased new business, reflect Assured Guaranty's current views with respect to future events 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. These risks and uncertainties include, but are not limited to, difficulties executing Assured Guaranty's business strategy; those risks and uncertainties resulting from changes in rating agency models or opinions; Assured Guaranty's continued capital adequacy; adverse credit developments in Assured Guaranty's insured portfolio and the impact of those developments on rating agency models and opinions; reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance; other risks and uncertainties that have not been identified at this time, management's response to these factors, and other risk factors identified in Assured Guaranty's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of October 22, 2024. Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Assured Guaranty Ltd.

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 non-U.S. public finance, infrastructure and structured finance markets. Assured Guaranty also participates in the asset management business through its ownership interest in Sound Point Capital Management, LP and certain of its investment management affiliates. More information on Assured Guaranty can be found at: AssuredGuaranty.com.

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