Assured Guaranty Ltd. Reports Results for First Quarter 2013

  Assured Guaranty Ltd. Reports Results for First Quarter 2013

  *First quarter 2013 operating income^1 was $260 million, or $1.34 per
    share, a new record for quarterly operating income. In first quarter 2012,
    operating income was $71 million, or $0.38 per share.
  *First quarter 2013 net loss was $144 million, or $0.74 per share, compared
    with a first quarter 2012 net loss of $483 million, or $2.65 per share.
    Net loss was primarily due to non-economic fair value losses on credit
    derivatives (which are expected to reverse by contract maturity).
  *Settlement agreement with UBS resulted in a $142 million ($93 million
    after tax) net economic benefit, of which $109 million ($71 million after
    tax) was recorded in operating income, and $33 million ($22 million after
    tax) will reduce future loss expense.
  *Common share repurchases resulted in per share increases of $0.27 to
    adjusted book value^1, $0.11 to operating shareholders' equity^1 and $0.04
    to GAAP book value.

Business Wire

HAMILTON, Bermuda -- May 9, 2013

Assured Guaranty Ltd. (NYSE:AGO) (“AGL” and, together with its subsidiaries,
“Assured Guaranty” or the “Company”) announced today its financial results for
the three-month period ended March 31, 2013 (“first quarter 2013”).

The Company reported operating income for first quarter 2013 of $260 million,
or $1.34 per share. This represents a 266% increase compared with the
three-month period ended March 31, 2012 ("first quarter 2012"), due primarily
to the $71 million ($0.36 per share) benefit attributable to the agreement
entered into with UBS Real Estate Securities Inc. and affiliates ("UBS") that
resolves Assured Guaranty's claims related to specified residential
mortgage-backed transactions, and to higher premium accelerations.

First quarter 2013 net loss was $144 million, or $0.74 per share, compared
with first quarter 2012 net loss of $483 million, or $2.65 per share. The main
drivers of the decrease in GAAP net loss were the benefit attributable to the
UBS agreement and the lower non-economic net unrealized fair value losses,
which result primarily from the narrowing of credit spreads of AGL's insurance
subsidiaries. Fair value adjustments in excess of credit impairment are deemed
non-economic, and therefore are expected to reverse by contract maturity.

“Our record-high operating income demonstrates the success of our loss
mitigation strategies and effective portfolio management,” said Dominic
Frederico, President and CEO. “Additionally, we continue to execute our
capital management strategy and, as of May 6, had repurchased over 5.6 million
shares.”

^1 These are financial measures that are not in accordance with accounting
principles generally accepted in the United States of America (“GAAP”)
(“non-GAAP financial measures”). Please see the “Explanation of Non-GAAP
Financial Measures” and the tables reconciling the non-GAAP measures to GAAP
measures in this press release.

       Table 1: Reconciliation of Net Income (Loss) to Operating Income

               (amounts in millions, except per share amounts)


                                                      Quarter Ended March 31,
                                                       2013         2012
                                                                     
Net income (loss)                                      $  (144   )   $ (483  )
Less after-tax adjustments:
Realized gains (losses) on investments                 19            (1      )
Non-credit impairment unrealized fair value gains      (434      )   (517    )
(losses) on credit derivatives
Fair value gains (losses) on committed capital         (6        )   (9      )
securities ("CCS")
Foreign exchange gains (losses) on remeasurement of
premiums receivable and loss and loss adjustment       (11       )   7
expense ("LAE") reserves
Effect of consolidating financial guaranty variable    28           (34     )
interest entities ("FG VIEs")
Operating income                                       $  260       $ 71    
                                                                     
Net income (loss) per diluted share                    $  (0.74  )   $ (2.65 )
Operating income per diluted share                     $  1.34       $ 0.38
                                                                     
Diluted shares outstanding-GAAP                        193.9         182.4
Diluted shares outstanding-operating                   194.6         186.2


New Business Production

         Table 2: Present Value of New Business Production (“PVP”)^1

                 and Gross Par Written (amounts in millions)


                                                     Quarter Ended March 31,
                                                      2013           2012
                                                                      
PVP
Public finance - U.S.
Direct                                                $  16           $ 30
Assumed from Radian Asset Assurance Inc. ("Radian")   —               22
Structured finance - U.S.                             2              4
Total PVP                                             $  18          $ 56
                                                                      
Gross par written:
Public finance - U.S.
Direct                                                $  1,580        $ 3,046
Assumed from Radian                                   —               1,797
Structured finance - U.S.                             14             38
Gross par written                                     $  1,594       $ 4,881


1. PVP is a non-GAAP financial measure. See the “Explanation of Non-GAAP
Financial Measures” section of this press release.

Direct public finance PVP declined in first quarter 2013 from its first
quarter 2012 level primarily because of the low interest rate environment,
tight credit spreads and the uncertainty of the Company's financial strength
rating following Moody's downgrade. PVP for first quarter 2012 included $22
million from public finance business assumed from Radian. Despite the
challenging interest rate and market environment, the Company maintained
average new business credit ratings in the single-A category. In addition,
premium rates in first quarter 2013 for municipal bond insurance were
consistent with 2012 rates.

First Quarter 2013 Operating Income Highlights

Table 3 highlights the components of Assured Guaranty's operating income and
provides reconciliations of GAAP income statements, as reported, to non-GAAP
operating income results.

                       Table 3: Reconciliation of GAAP

                          to Non-GAAP Income Results

               (amounts in millions, except per share amounts)


              Quarter Ended March 31, 2013         Quarter Ended March 31, 2012
               GAAP        Less:         Non-GAAP    GAAP                         Non-GAAP
               Income      Operating                 Income      Less:Operating
                                         Operating                                Operating
               Statement  Income                   Statement  Income         
               As                        Income      As                           Income
                           Adjustments   Results                 Adjustments      Results
               Reported                              Reported
Revenues:
Net earned     $ 248       $  (18   )    $  266      $ 194       $   (17    )     $  211
premiums
Net
investment     94          0             94          98          2                96
income
Net realized
investment     28          29            (1      )   1           (1         )     2
gains
(losses)
Net change
in fair
value of       (592    )   (620     )    28          (691    )   (720       )     29
credit
derivatives
Fair value
gains          (10     )   (10      )    —           (14     )   (14        )     —
(losses) on
CCS
Fair value
gains          70          70            —           (41     )   (41        )     —
(losses) on
FG VIEs
Other income   (14     )   (17      )    3          91         3               88      
Total          (176    )   (566     )    390         (362    )   (788       )     426
revenues
                                                                                  
Expenses:
Loss
expense:
Financial
guaranty       (48     )   7             (55     )   242         (7         )     249
insurance
Credit         —           (10      )    10          —           2                (2      )
derivatives
Amortization
of deferred    3           —             3           5           —                5
acquisition
costs
Interest       21          —             21          25          —                25
expense
Other
operating      60         —            60         62         —               62      
expenses
Total          36          (3       )    39          334         (5         )     339
expenses
                                                                             
Income
(loss)         (212    )   (563     )    351         (696    )   (783       )     87
before
income taxes
Provision
(benefit)      (68     )   (159     )    91         (213    )   (229       )     16      
for income
taxes
Income         $ (144  )   $  (404  )    $  260     $ (483  )   $   (554   )     $  71   
(loss)
                                                                                  
Diluted        193.9                     194.6       182.4                        186.2
shares
                                                                                  
Earnings per
share,         $ (0.74 )                 $  1.34     $ (2.65 )                    $  0.38
diluted


Components of first quarter 2013 operating income are compared with the same
items in first quarter 2012.

  *Net earned premiums: Net earned premiums on an operating income basis
    increased to $266 million in first quarter 2013 from $211 million in first
    quarter 2012, due primarily to higher accelerations. Premium accelerations
    were $113 million in first quarter 2013, compared with $37 million in
    first quarter 2012. Approximately $61 million of the premium accelerations
    in first quarter 2013 resulted from terminations of exposure, and the
    remainder was attributable to refundings of insured municipal bond
    transactions.
  *Other income: There were no reinsurance commutations in first quarter
    2013. Other income in first quarter 2012 included $83 million of
    reinsurance commutations gains related to reassumptions of previously
    ceded books of business.
  *Loss expense: First quarter 2013 loss expense was a benefit of $45 million
    ($25 million after tax, or $0.13 per share), compared with loss expense of
    $247 million ($173 million after tax, or $0.93 per share) in first quarter
    2012. The decrease was primarily due to the UBS agreement recognized in
    first quarter 2013 and to higher loss expense related to Greek sovereign
    exposures in first quarter 2012.
  *Income taxes: First quarter 2013 effective tax rate on operating income
    was 25.8%, compared with 17.9% in first quarter 2012, due to higher pretax
    operating income in U.S. taxable jurisdictions.

Economic Loss Development

Economic loss development represents the change in net expected loss to be
paid attributable to all factors other than loss and LAE payments. It includes
the effects of changes in assumptions based on observed market trends, changes
in discount rates, accretion of discount and the economic effects of loss
mitigation efforts. Economic loss development is the principal measure that
Assured Guaranty uses to evaluate the loss experience in its insured
portfolio. Expected loss to be paid includes all transactions insured by the
Company, whether written in insurance or credit derivative form, regardless of
the accounting model prescribed under GAAP. Table 4 provides a roll forward of
net expected loss to be paid.

           Table 4: Roll Forward of Net Expected Loss to be Paid on

                  Insurance Contracts and Credit Derivatives

                            (amounts in millions)

                         Quarter Ended March 31, 2013


                     Net Expected   Economic Loss                  Net
                     Loss to                        Loss (Paid)    Expected
Insurance                           Development                    Loss to
Contracts and       be Paid as    During         Recovered    
Credit Derivatives   of                             First          be Paid as
                                    First Quarter                  of March
                     December 31,   2013            Quarter 2013
                     2012                                          31, 2013
                                                                   
Before recoveries
for breaches of
representations
and warranties
("R&W"):
U.S. RMBS            $  1,652       $   57          $   (154  )    $  1,555
Other                398           12             (27       )    383       
Total before
recoveries for R&W   2,050          69              (181      )    1,938
breaches
R&W recoveries for   (1,370    )    (157      )     89            (1,438    )
U.S. RMBS
Total, net of R&W    680            (88       )     (92       )    500
recoveries
Other                (3        )    (10       )     —             (13       )
Total                $  677        $   (98   )     $   (92   )    $  487    


Total economic loss development was a favorable development of $98 million
($64 million after tax) in first quarter 2013 due primarily to the UBS
agreement, which increased the benefit for R&W recoveries by $142 million ($93
million after tax).

Book Value Measurements and Share Repurchase Program

Adjusted book value ("ABV") per share increased due to the UBS agreement and
the reduction in common shares outstanding at the end of the period due to the
share repurchases. Operating shareholders' equity per share was also
positively affected by the UBS agreement and share repurchases, as well as
premium accelerations. The Company had repurchased 1.9 million shares as of
March 31, 2013 at an average price of $20.46 per share. Through May 6, 2013,
the Company had repurchased 5.6 million shares at an average price of $20.29
per share. On May 8, 2013, the Company's board of directors authorized an
additional $115 million of repurchases of the Company’s common shares,
bringing the 2013 authorization to $315 million.

              Table 5: Reconciliation of Shareholders' Equity to

           Operating Shareholders' Equity and Adjusted Book Value^1

               (amounts in millions, except per share amounts)


                                           As of
                                            March 31, 2013  December 31, 2012
                                                             
Shareholders' equity                        $   4,724        $    4,994
Less after-tax adjustments:
Effect of consolidating FG VIEs             (322        )    (348          )
Non-credit impairment unrealized fair
value gains (losses) on credit              (1,447      )    (988          )
derivatives
Fair value gains (losses) on CCS            17               23
Unrealized gain (loss) on investment
portfolio excluding foreign exchange        421             477           
effect
Operating shareholders' equity              6,055            5,830
After-tax adjustments:
Less: Deferred acquisition costs            163              165
Plus: Net present value of estimated net    201              220
future credit derivative revenue
Plus: Net unearned premium reserve on
financial guaranty contracts in excess of   3,125           3,266         
expected loss to be expensed
Adjusted book value                         $   9,218       $    9,151    
                                                             
Shares outstanding at the end of the        192.3            194.0
period
                                                             
Per share:
Shareholders' equity                        $   24.56        $    25.74
Operating shareholders' equity              31.48            30.05
Adjusted book value                         47.92            47.17

__________________

1. Operating shareholders' equity and adjusted book value are non-GAAP
financial measures. See the "Explanation of Non-GAAP Financial Measures"
section of the press release.

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 Friday, May 10, 2013. The conference call
will be available via live and archived webcast in the Investor Information
section of the Company's website at assuredguaranty.com or by dialing
1-888-317-6016 (in the U.S.) or 1-412-317-6016 (International). A replay of
the call will be available through July 10, 2013. To listen to the replay,
dial 1-877-344-7529 (in the U.S.) or 1-412-317-0088 (International), passcode
10028392. The replay will be available one hour after the conference call
ends.

Please refer to Assured Guaranty's March 31, 2013 Financial Supplement, which
is posted on the Company's website at
assuredguaranty.com/investor-information/by-company/assured-guaranty-ltd/financial-information,
for more information on the Company's financial guaranty portfolios,
investment portfolio and other items. The Company is also posting on the same
page of its website:

  *“Public Finance Transactions in 1Q 2013,” which lists the U.S. public
    finance new issues insured by the Company in first quarter 2013, and
  *“Structured Finance Transactions at March 31, 2013,” which lists the
    Company's structured finance exposure as of that date.

In addition, the Company is posting at assuredguaranty.com/presentations the
“March 31, 2013 Equity Investor Presentation.” Furthermore, the Company's
separate-company subsidiary financial supplements and its Fixed Income
Presentation for the current quarter will be posted on the Company's website
when available. 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. Its operating subsidiaries provide credit enhancement products to the
U.S. and international public finance, infrastructure and structured finance
markets. More information on Assured Guaranty Ltd. and its subsidiaries can be
found at assuredguaranty.com.

                            Assured Guaranty Ltd.

              Consolidated Statements of Operations (unaudited)

                            (amounts in millions)


                                                      Quarter Ended March 31,
                                                       2013         2012
Revenues:
Net earned premiums                                    $  248        $  194
Net investment income                                  94            98
Net realized investment gains (losses)                 28            1
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements          18            (57     )
Net unrealized gains (losses)                          (610    )     (634    )
Net change in fair value of credit derivatives         (592    )     (691    )
Fair value gains (losses) on CCS                       (10     )     (14     )
Fair value gains (losses) on FG VIEs                   70            (41     )
Other income                                           (14     )     91      
Total revenues                                         (176    )     (362    )
                                                                     
Expenses:
Loss and LAE                                           (48     )     242
Amortization of deferred acquisition costs             3             5
Interest expense                                       21            25
Other operating expenses                               60           62      
Total expenses                                         36            334
                                                                    
Income (loss) before income taxes                      (212    )     (696    )
Provision (benefit) for income taxes                   (68     )     (213    )
Net income (loss)                                      (144    )     (483    )
Less after-tax adjustments:
Realized gains (losses) on investments                 19            (1      )
Non-credit impairment unrealized fair value gains      (434    )     (517    )
(losses) on credit derivatives
Fair value gains (losses) on CCS                       (6      )     (9      )
Foreign exchange gains (losses) on remeasurement of    (11     )     7
premiums receivable and loss and LAE reserves
Effect of consolidating FG VIEs                        28           (34     )
Operating income                                       $  260       $  71   


                            Assured Guaranty Ltd.

                   Consolidated Balance Sheets (unaudited)

                            (amounts in millions)


                                           As of
                                            March 31, 2013  December 31, 2012
Assets
Investment portfolio:
Fixed maturity securities,                  $   9,985        $      10,056
available-for-sale, at fair value
Short-term investments, at fair value       729              817
Other invested assets                       148             212
Total investment portfolio                  10,862           11,085
                                                             
Cash                                        125              138
Premiums receivable, net of ceding          956              1,005
commissions payable
Ceded unearned premium reserve              535              561
Deferred acquisition costs                  116              116
Reinsurance recoverable on unpaid losses    56               58
Salvage and subrogation recoverable         543              456
Credit derivative assets                    125              141
Deferred tax asset, net                     872              721
FG VIE assets, at fair value                2,813            2,688
Other assets                                296             273
Total assets                                $   17,299      $      17,242
                                                             
Liabilities and shareholders' equity
Liabilities
Unearned premium reserve                    $   4,982        $      5,207
Loss and LAE reserve                        532              601
Reinsurance balances payable, net           193              219
Long-term debt                              832              836
Credit derivative liabilities               2,518            1,934
FG VIE liabilities with recourse, at fair   2,071            2,090
value
FG VIE liabilities without recourse, at     1,107            1,051
fair value
Other liabilities                           340             310
Total Liabilities                           12,575           12,248
                                                             
Shareholders' equity
Common stock                                2                2
Additional paid-in capital                  2,685            2,724
Retained earnings                           1,586            1,749
Accumulated other comprehensive income      447              515
Deferred equity compensation                4               4
Total shareholders' equity                  4,724           4,994
Total liabilities and shareholders'         $   17,299      $      17,242
equity


Explanation of Non-GAAP Financial Measures:

The Company references financial measures that are not in accordance with
GAAP. Management and the board of directors utilize non-GAAP measures in
evaluating the Company's financial performance and as a basis for determining
senior management incentive compensation. By providing these non-GAAP
financial measures, investors, analysts and financial news reporters have
access to the same information that management reviews internally. In
addition, Assured Guaranty's presentation of non-GAAP financial measures is
consistent with how analysts calculate their estimates of Assured Guaranty's
financial results in their research reports on Assured Guaranty and with how
investors, analysts and the financial news media evaluate Assured Guaranty's
financial results.

The following paragraphs define each non-GAAP financial measure and describe
why it is useful. A reconciliation of the non-GAAP financial measure and the
most directly comparable GAAP financial measure, if available, is presented
herein. Non-GAAP financial measures should not be viewed as substitutes for
their most directly comparable GAAP measures.

Operating Income: Management believes that operating income is a useful
measure because it clarifies the understanding of the underwriting results of
the Company's financial guaranty insurance business, and also includes
financing costs and net investment income, and enables investors and analysts
to evaluate the Company's financial results as compared with the consensus
analyst estimates distributed publicly by financial databases. Operating
income is defined as net income (loss) attributable to AGL, as reported under
GAAP, adjusted for the following:

1) Elimination of the after-tax 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. Trends in the
underlying profitability of the Company's business can be more clearly
identified without the fluctuating effects of these transactions.

2) Elimination of the after-tax non-credit-impairment unrealized fair value
gains (losses) on credit derivatives, which is the amount 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. Additionally, such adjustments present all financial guaranty contracts
on a more consistent basis of accounting, whether or not they are subject to
derivative accounting rules.

3) Elimination of the after-tax fair value gains (losses) on the Company's
CCS. Such amounts 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.

4) Elimination of the after-tax foreign exchange gains (losses) on
remeasurement of net premium receivables and loss and LAE reserves. Long-dated
receivables constitute a significant portion of the net premium receivable
balance and represent the present value of future contractual or expected
collections. 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 effects of consolidating FG VIEs in order to present all
financial guaranty contracts on a more consistent basis of accounting, whether
or not GAAP requires consolidation. GAAP requires the Company to consolidate
certain VIEs that have issued debt obligations insured by the Company even
though the Company does not own such VIEs.

Operating Shareholders' Equity: Management believes that operating
shareholders' equity is a useful measure because it presents the equity of
Assured Guaranty Ltd. with all financial guaranty contracts accounted for on a
more consistent basis and excludes fair value adjustments that are not
expected to result in economic loss. Many investors, analysts and financial
news reporters use operating shareholders' equity as the principal financial
measure for valuing Assured Guaranty Ltd.'s current share price or projected
share price and also as the basis of their decision to recommend buying or
selling Assured Guaranty Ltd.'s common shares. Many of the Company's fixed
income investors also use operating shareholders' equity to evaluate the
Company's capital adequacy. Operating shareholders' equity is the basis of the
calculation of adjusted book value (see below). Operating shareholders' equity
is defined as shareholders' equity attributable to AGL, as reported under
GAAP, adjusted for the following:

1) Elimination of the effects of consolidating FG VIEs in order to present all
financial guaranty contracts on a more consistent basis of accounting, whether
or not GAAP requires consolidation. GAAP requires the Company to consolidate
certain VIEs that have issued debt obligations insured by the Company even
though the Company does not own such VIEs.

2) Elimination of the after-tax non-credit-impairment unrealized fair value
gains (losses) on credit derivatives, which is the amount 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.

3) Elimination of the after-tax fair value gains (losses) on the Company's
CCS. Such amounts 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.

4) Elimination of the after-tax unrealized gains (losses) on the Company's
investments that are recorded as a component of accumulated other
comprehensive income (“AOCI”) (excluding foreign exchange remeasurement). 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 should not recognize an economic gain or loss.

Adjusted Book Value: Management believes that adjusted book value is a useful
measure because it enables an evaluation of the net present value of the
Company's in-force premiums and revenues in addition to operating
shareholders' equity. The 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. Many investors, analysts and
financial news reporters use adjusted book value to evaluate Assured Guaranty
Ltd.'s share price and as the basis of their decision to recommend, buy or
sell Assured Guaranty Ltd. common shares. Adjusted book value is operating
shareholders' equity, as defined above, further adjusted for the following:

1) Elimination of after-tax 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 after-tax net present value of estimated net future credit
derivative revenue. See below.

3) Addition of the after-tax value of the unearned premium reserve on
financial guaranty contracts in excess of expected loss to be expensed, net of
reinsurance. This amount represents the expected future net earned premiums,
net of expected losses to be expensed, which are not reflected in GAAP equity.

Net Present Value of Estimated Net Future Credit Derivative Revenue:
Management believes that this amount is a useful measure because it enables an
evaluation of the value of future estimated credit derivative revenue. There
is no corresponding GAAP financial measure.  This amount represents the
present value of estimated future revenue from the Company's credit derivative
in-force book of business, net of reinsurance, ceding commissions and premium
taxes for contracts without expected economic losses, and is discounted at 6%.
Estimated net future credit derivative revenue may change from period to
period 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.

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 for the Company by taking into account the value of
estimated future installment premiums on all new contracts underwritten in a
reporting period as well as premium supplements and additional installment
premiumon existing contractsas to which the issuer has the right to call the
insured obligation but has not exercised such right, whether in insurance or
credit derivative contract form, which GAAP gross premiums written and the net
credit derivative premiums received and receivable portion of net realized
gains and other settlements on credit derivatives (“Credit Derivative
Revenues”) do not adequately measure. PVP in respect of financial guaranty
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, in each case, discounted at 6% . For purposes of the PVP
calculation, management discounts estimated future installment premiums on
insurance contracts at 6%, while under GAAP, these amounts 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 future net earned or written premiums and Credit Derivative Revenues
may differ from PVP 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 PVP to Gross Written Premiums

                            (amounts in millions)


                                                      Quarter Ended March 31,
                                                       2013            2012
                                                                        
Total PVP                                              $   18           $  56
Less: financial guaranty installment premium PVP       1               4
Total: financial guaranty upfront gross written        17               52
premiums
Plus: financial guaranty installment gross written     —               36
premiums^1
Total gross written premiums                           $   17          $  88

__________________

1. Represents present value of new business on installment policies plus gross
written premiums adjustment on existing installment policies due to changes in
assumptions and any cancellations of assumed reinsurance contracts.

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. For example, Assured Guaranty's calculations of
adjusted book value, PVP, net present value of estimated future installment
premiums in force and total estimated net future premium earnings and
statements regarding its capital position and demand for its insurance and
other forward-looking statements could be affected by a 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
Assured Guaranty or any of its subsidiaries and/or of transactions that
Assured Guaranty's subsidiaries have insured, developments in the world's
financial and capital markets, including changes in interest and foreign
exchange rates, that adversely affect the demand for the Company's insurance,
issuers' payment rates, Assured Guaranty's loss experience, its exposure to
refinancing risk in transactions (which could result in substantial liquidity
claims on its guaranties), its access to capital, its unrealized (losses)
gains on derivative financial instruments or its investment returns, changes
in the world's credit markets, segments thereof or general economic
conditions, the impact of rating agency action with respect to sovereign debt
and the resulting effect on the value of securities in the Company's
investment portfolio and collateral posted by and to the Company, more severe
or frequent losses impacting the adequacy of Assured Guaranty's expected loss
estimates, the impact of market volatility on the mark-to-market of the
Company's contracts written in credit default swap form, reduction in the
amount of insurance opportunities available to the Company, deterioration in
the financial condition of the Company's reinsurers, the amount and timing of
reinsurance recoverables actually received, the risk that reinsurers may
dispute amounts owed to the Company under its reinsurance agreements, failure
of Company to realize insurance loss recoveries or damages expected from
originators, sellers, sponsors, underwriters or servicers of residential
mortgage-backed securities transactions through loan putbacks, settlement
negotiations or litigation, the possibility that budget shortfalls or other
factors will result in credit losses or impairments on obligations of state
and local governments that the Company insures or reinsures, increased
competition, including from new entrants into the financial guaranty industry,
changes in accounting policies or practices, changes in laws or regulations,
other governmental actions, difficulties with the execution of Assured
Guaranty's business strategy, contract cancellations, loss of key personnel,
adverse technological developments, the effects of mergers, acquisitions and
divestitures, natural or man-made catastrophes, 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. These forward-looking
statements are made as of May 9, 2013, and 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.

Contact:

Assured Guaranty Ltd.
Robert Tucker, 212-339-0861
Managing Director, Investor Relations and Corporate Communications
rtucker@assuredguaranty.com
or
Ashweeta Durani, 212-408-6042
Vice President, Corporate Communications
adurani@assuredguaranty.com
 
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