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Assured Guaranty has announced that S&P Global Ratings (S&P) has affirmed the AA financial strength ratings on US bond insurers Assured Guaranty Municipal (AGM), Municipal Assurance Corp. (MAC) and Assured Guaranty Corp. (AGC); UK financial guarantor Assured Guaranty (Europe) (AGE); and Bermuda insurers Assured Guaranty Re (AGRe) and Assured Guaranty Re Overseas (AGRO).
S&P also affirmed the financial strength ratings of UK financial guarantor Assured Guaranty (UK) and Assured Guaranty (London) (AG London). The outlooks of all the Assured Guaranty entities are stable, other than the outlook of AG London, which is positive.
S&P noted Assured Guaranty’s very strong capital adequacy along with its proven track record of credit discipline and market leadership in terms of par insured and premiums written. It also cited its diverse underwriting strategy with a well-thought-out and measured approach to international infrastructure and global structured finance transactions. S&P also pointed out that capital position could absorb losses on its entire exposure to issuers in Puerto Rico of roughly $3 billion and there would be no change in Assured’s capital adequacy score or financial risk profile.
“Once again, S&P affirmed Assured Guaranty’s AA stable rating,” said Dominic Frederico, President and CEO. “The affirmation corroborates not only our financial strength but also our proven business model, profitable financial results and the success of our strategic choices. Our size and experience allow us to lead the US municipal bond market by participating broadly, regularly insuring large municipal transactions, including public-private partnerships, as well as small and mid-size transactions, while achieving favourable premium rates. Additionally, our international infrastructure and structured finance businesses further diversify our insured portfolio while providing a competitive advantage through the flexibility to capitalise on growth trends and pricing opportunities when they are better in one sector than in others.
“Over recent years, we were able to continue to produce solid economic results through new business origination, effective loss mitigation, reassumptions of ceded business, and acquisitions. Our insured portfolio has amortised significantly in recent years, partially as a result of low interest rates limiting new business opportunities, while our claims-paying resources have remained substantially the same – currently at approximately $11.5 billion – significantly reducing our leverage ratios. As a result, based on our understanding of S&P’s capital adequacy model, we estimate that Assured Guaranty had $2.8 billion of capital in excess of S&P’s AAA requirement at year-end 2017.”
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