Assured Guaranty Ltd. Q4 FY2025 earnings call

• Key business strategies advanced in 2025, with key shareholder value metrics at new per - share highs. - Repurchased 12% of common shares and distributed $69 million in dividends, with a 12% increase in quarterly dividend. - Alternative investments performed well with 13% inception - to - date IRR. - Successfully defended legal rights in Lehman Brothers litigation, resulting in a pretax gain of ~$103 million. - Completed work to leverage into life and annuity reinsurance and acquired Warwick Re in January 2026. - In U.S. public finance, insured over $25 billion of new - issue municipal par, leading the industry with 58% market share. Secondary market par insured more than 240% year - over - year. - Non - U.S. public finance had $37 million in PVP, with primary infrastructure finance transactions in U.K. and EU. Global structured finance had $43 million in PVP, with fund finance as a high - performance flow business.

In 2025, Assured Guaranty Ltd. had key financial metrics at new per - share highs. Adjusted book value was $186.43, adjusted operating shareholders' equity was $126.78, and shareholders' equity was $125.32. Adjusted operating income per share was $9.80 compared to $7.10 in 2024. Present value of new business production (PVP) totaled $286 million. Municipal bond insurance was strong with over $27 billion of municipal par insured, 16% more than 2024. U.S. public finance originated $206 million in PVP, with secondary market par insured more than tripled. Non - U.S. public finance and global finance originations contributed $80 million in PVP. Alternative investments had a fair value of over $1 billion as of 12/31/2025, with $47 million in pretax adjusted operating income in Q4 2025 and $160 million for the full year, up 33% year - over - year.

• Expect strong results from three financial guarantee product lines in 2026 with a robust transaction pipeline. - Already closed several large transactions in 2026. - The annuity reinsurance business is expected to add another source of earnings, with progress on assuming new annuity business blocks.

• References to risk factors in SEC filings. - Potential impact of credit market conditions, credit spreads, and financial ratings on future results. - Uncertainties related to legal litigations and loss mitigation situations.

Q: Earlier in the quarter, you noted that issuance in BBB credits had come back from prior lower levels. How did this look in the fourth quarter, and what are your thoughts for the mix into 2026?

A: We are seeing that come back, and we saw it in the fourth quarter. We are off to a very good start in the first quarter, so we believe that is going to continue. We have closed a number of transactions already in U.S. public finance as well as infrastructure finance in Europe, and so we continue to see that.

Q: Looking at the big exposures, could you give us an update on your outlook across the U.K. utilities and Brightline as well?

A: For U.K. utilities, U.K. water utility BIG exposure went down as we upgraded Southern Water. Thames is the only problem exposure now, part of creditors committee and working with U.K. government for market - based solution. For Brightline, there is over $4 billion of subordination below us, ridership is going up, and we are confident in our position.

Q: A question on your alternative investment portfolio. I tend to remember that it is largely CLOs that are in there, but can you just talk about the exposure there? Is there anything with private credit that we should keep on the radar?

A: We do not really take direct, absolute direct exposure to private credit. Obviously, we are investing in the CLO market, and some of the names are in there as well. However, we do mark our portfolio to market, and we believe that any pain that probably has been experienced in the market today, for many of the names that have been in there, we have experienced. But we remain confident, and again, our exposure there is in good shape.

Q: To the extent that you allocate some capital into the annuity reinsurance market, would that preclude you from sticking with your $500 million annual buyback target, or should we think of those as two independent opportunities?

A: You have to look at the entire capital stack as interdependent. We have a range of capital management opportunities this year in terms of stock buyback, but that range will be dictated by what other opportunities we see in the market, specifically the life and annuity reinsurance business. That might allocate some more capital that will dictate exactly where we will land in the range of our stock buyback.