S&P Affirms Assured Guaranty’s AA Financial Strength Ratings with Stable Outlook

Rhea-AI Summary

S&P Global Ratings has reaffirmed the AA financial strength rating for Assured Guaranty (NYSE: AGO) and its subsidiaries, maintaining a stable outlook. This affirmation highlights Assured Guaranty's strong competitive position in the U.S. public finance market, excellent capital adequacy, and exceptional liquidity. The company's well-diversified global underwriting strategy and measured approach to non-U.S. public finance markets were also praised. CEO Dominic Frederico emphasized the company's intent to grow its insured portfolio, enhancing future earnings and financial strength.

Positive

• S&P reaffirmed Assured Guaranty's AA financial strength rating.
• Stable outlook maintained by S&P.
• Strong competitive position in the U.S. public finance market.
• Excellent capital adequacy and earnings.
• Exceptional liquidity.
• Well-diversified global underwriting strategy.
• Measuring approach in non-U.S. public finance markets praised.
• Intent to grow the insured portfolio to enhance future earnings.

Negative

• The press release does not provide any new, groundbreaking information that could lead to immediate, significant stock price changes.

Insights

Financial Analyst

The affirmation of Assured Guaranty's AA financial strength rating by S&P is a significant indicator of the company’s stability and reliability. This high rating suggests excellent capital adequacy and exceptional liquidity, which are pivotal for investors as they reflect the company’s capability to meet its financial obligations. The stable outlook reaffirms confidence in the company's future performance and risk management.

Assured Guaranty's strong presence in the U.S. public finance market and their diversified underwriting strategy offer resilience against market fluctuations. The company’s management is commended for its measured approach to non-U.S. markets, which minimizes risk exposure while optimizing growth opportunities.

For investors, this means a potentially stable and reliable investment with lower risk of default. The emphasis on excellent capital and earnings indicates robust financial health, positively impacting long-term returns. However, the company's ability to maintain these ratings will depend on continuous prudent management and market conditions. Potential concerns might include market volatility and economic downturns that could affect the public finance market.

Market Research Analyst

S&P's affirmation of Assured Guaranty's ratings highlights the company’s competitive position in the insurance industry. A rating of AA underscores a high level of trust and confidence from one of the most reputable credit rating agencies. This can positively affect investor sentiment and lead to more favorable borrowing terms for the company.

The company's strategy of maintaining a diverse underwriting portfolio, with a significant focus on the U.S. public finance market, provides a strategic advantage in times of market instability. This diversity allows the company to pivot and capitalize on favorable conditions in different markets, reducing overall risk. The company's focus on the U.S. market is especially pertinent given the relative stability and size of the U.S. public finance sector.

For retail investors, understanding that the company is backed by a stable outlook from S&P can be reassuring. However, it is vital to monitor any changes in the macroeconomic environment that could impact public finance markets, both in the U.S. and globally. While the current outlook is stable, shifts in economic policy or unforeseen market disruptions could alter this scenario.

Legal Expert

The reaffirmation of Assured Guaranty's AA rating also has legal implications, reflecting strong regulatory compliance and risk management practices. Credit rating agencies like S&P consider regulatory adherence and legal structures when assigning ratings. This indicates that Assured Guaranty has robust legal frameworks in place, which is important for sustaining long-term operations and avoiding potential legal pitfalls.

From a legal perspective, the company's well-diversified underwriting strategy and its measured approach to non-U.S. public finance markets suggest prudent risk management, which is essential to avert litigation and compliance issues. Investors can take comfort in the fact that a company with solid legal and regulatory practices is less likely to face disruptions that could impact financial performance.

Highlights Very Strong Competitive Position, Excellent Capital Adequacy and Liquidity, and Diverse Underwriting Strategy

HAMILTON, Bermuda--(BUSINESS WIRE)-- Assured Guaranty Ltd. (NYSE: AGO) (together with its subsidiaries, Assured Guaranty) announced today that S&P Global Ratings (S&P) has affirmed the AA financial strength rating, financial enhancement rating, and issuer credit ratings on Assured Guaranty and its operating insurance subsidiaries. The outlooks remain stable.

In its May 28, 2024 research update report, S&P noted Assured Guaranty’s:

• “excellent capital adequacy and a very strong competitive position, supported by a strong presence in the U.S. public finance market”
• “excellent” capital and earnings
• “exceptional” liquidity
• “well-diversified global underwriting strategy dominated by business written in the U.S. public finance market”
• “management’s approach to writing business in non-U.S. public finance markets as well thought out and measured”
• “underwriting strategy provides flexibility to capitalize on opportunities in one market when other markets are less favorable”

In response to the report, Dominic Frederico, President and CEO of Assured Guaranty, said: “Assured Guaranty’s AA rating affirmation by S&P highlights our ‘strong presence in the U.S. public finance market’ and our ‘measured approach to insuring non-U.S. public finance transactions.’ S&P also stated that they ‘believe management will maintain the company’s excellent capital position’ as we continue to implement our global underwriting growth strategy. Assured Guaranty is poised to continue growing its insured portfolio to sustain and increase its store of unearned premiums, its future earnings power and its financial strength. Assured Guaranty continues to offer a uniquely beneficial value proposition to both issuers and fixed income investors.”

Cautionary Statement Regarding Forward-Looking Statements

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; the adequacy of Assured Guaranty’s capital and its ability to manage such capital; Assured Guaranty’s positioning for future global underwriting growth, unearned premiums, earnings power and financial strength; difficulties producing and sustaining new business; the benefits of Assured Guaranty’s value proposition; adverse credit developments in Assured Guaranty’s insured portfolio and the impact of those developments on rating agency models and opinions; insured losses 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; 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 May 29, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240529400038/en/

Investor Relations:

Robert Tucker, 212-339-0861

Senior Managing Director, Investor Relations and Corporate Communications

rtucker@agltd.com



Media:

Ashweeta Durani, 212-408-6042

Director, Corporate Communications

adurani@agltd.com

Source: Assured Guaranty Ltd.

FAQ

What rating did S&P reaffirm for Assured Guaranty?

S&P reaffirmed Assured Guaranty's AA financial strength rating.

What is the outlook for Assured Guaranty's rating according to S&P?

The outlook for Assured Guaranty's rating is stable.

Which market does Assured Guaranty have a strong competitive position in?

Assured Guaranty has a strong competitive position in the U.S. public finance market.

What did S&P highlight about Assured Guaranty's capital adequacy?

S&P highlighted Assured Guaranty's excellent capital adequacy.

How did S&P rate Assured Guaranty's liquidity?

S&P rated Assured Guaranty's liquidity as exceptional.

What is notable about Assured Guaranty's underwriting strategy according to S&P?

S&P noted Assured Guaranty's well-diversified global underwriting strategy.

What is the CEO's perspective on Assured Guaranty's future?

The CEO emphasized the intent to grow the insured portfolio to enhance future earnings and financial strength.