Assured Guaranty’s AA rating affirmed by S&P

S&P Global Ratings has affirmed the AA financial strength ratings of subsidiaries of Bermuda based Assured Guaranty Ltd. The outlooks of all the Assured Guaranty entities are stable.

In a statement, Assured Guaranty, one of the world’s leading bond insurers, said S&P noted the company’s “excellent capital and earnings with a meaningful capital adequacy buffer at the current rating”, “exceptional” liquidity and “very strong competitive position based on its underwriting strategy”.

S&P also said Assured’s “experienced management team … demonstrates a strong understanding of the various risks the company has as it executes [its] underwriting strategy”.

Assured said S&P also credited its “positive” risk management culture “reflecting Assured's robust risk reporting and significant oversight from senior management” and praised its

“well thought out and measured” approach to writing business in non-US public finance (USPF) markets.

S&P also wrote: “Although much of the group's business has been insured debt issues in USPF, underwriting includes global structured finance and international local and regional government bonds as well as infrastructure projects. This underwriting strategy provides flexibility to capitalise on opportunities in one market when other markets are less favourable.”

S&P noted that for the six months of 2023 in the US municipal bond market, “new money issuance is up nearly 10%. Much of the rise in new money issues is due to state and local investment in essential infrastructure.”

It added: “From a profit perspective within the USPF market, higher interest rates and widening spreads also create strong pricing opportunity and long-term profitability for Assured.”

In response to the report, Dominic Frederico (pictured), president and CEO of Assured Guaranty, said: “Assured Guaranty’s AA rating affirmation by S&P and its highly favourable comments around our detailed risk management policies, surveillance, and loss mitigation represents a strong affirmation of both our business model and our strategic business approach.”

He added: “S&P’s positive comments about how our investment strategy adequately supports our liquidity needs, and our use of a structured process for risk identification and monitoring. We agree with S&P’s assessment that trends in the US public finance market and our growing global structured finance and international infrastructure businesses afford strong growth opportunities for our company.”