ASSURED GUARANTY LTD - FORM 8-K - EX-99.2 - FINANCIAL SUPPLEMENT

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8-K - 8-K - ASSURED GUARANTY LTD	a8-k3q2013agl.htm
EX-99.1 - PRESS RELEASE - ASSURED GUARANTY LTD	agl3q13pressrelease.htm

Assured Guaranty Ltd.

September 30, 2013

Financial Supplement



Table of Contents		Page
	Selected Financial Highlights	1
	Consolidated Statements of Operations (unaudited)	2
	Net Income (Loss) Reconciliation to Operating Income	3
	Consolidated Balance Sheets (unaudited)	5
	Adjusted Book Value	6
	Claims Paying Resources	7
	New Business Production	8
	Financial Guaranty Gross Par Written	9
	New Business Production by Quarter	10
	Available-for-Sale Investment Portfolio and Cash	11
	Estimated Net Exposure Amortization and Estimated Future Net Premium and Credit Derivative Revenues	12
	Expected Amortization of Net Par Outstanding	13
	Present Value of Financial Guaranty Insurance Net Expected Loss to be Expensed	14
	Financial Guaranty Profile	15
	Direct Pooled Corporate Obligations Profile	19
	Consolidated U.S. RMBS Profile	20
	Direct U.S. RMBS Profile	21
	Direct U.S. Commercial Real Estate Profile	23
	Below Investment Grade Exposures	24
	Largest Exposures by Sector	29
	Rollforward of Net Expected Loss and Loss Adjustment Expenses to be Paid	33
	Financial Guaranty Insurance and Credit Derivative U.S. RMBS Representations and Warranties Benefit Development	34
	Losses Incurred	35
	Summary Financial and Statistical Data	36
	Glossary	37
	Non-GAAP Financial Measures	40

This financial supplement should be read in conjunction with documents filed by Assured Guaranty Ltd. (‘‘AGL’’ and, together with its subsidiaries, ‘‘Assured Guaranty’’ or the ‘‘Company’’) with the Securities and Exchange Commission (‘‘SEC’’), including its Annual Report on Form 10-K for the year ended December 31, 2012 and its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2013, June 30, 2013 and September 30, 2013.

Some amounts in this financial supplement may not add due to rounding.

Cautionary Statement Regarding Forward Looking Statements:

Any forward looking statements made in this supplement reflect the current views of Assured Guaranty 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. Assured Guaranty's forward looking statements could be affected by many events. These events include (1) 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; (2) 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 guarantees), its access to capital, its unrealized (losses) gains on derivative financial instruments or its investment returns; (3) changes in the world’s credit markets, segments thereof or general economic conditions; (4) 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; (5) more severe or frequent losses impacting the adequacy of Assured Guaranty’s expected loss estimates; (6) the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; (7) reduction in the amount of insurance opportunities available to Assured Guaranty; (8) deterioration in the financial condition of Assured Guaranty's reinsurers, the amount and timing of reinsurance recoverables actually received and the risk that reinsurers may dispute amounts owed to Assured Guaranty under its reinsurance agreements; (9) failure of Assured Guaranty 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; (10) 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; (11) increased competition, including from new entrants into the financial guaranty industry; (12) changes in applicable accounting policies or practices; (13) changes in applicable laws or regulations, including insurance and tax laws; (14) other governmental actions; (15) difficulties with the execution of Assured Guaranty’s business strategy; (16) contract cancellations; (17) loss of key personnel; (18) adverse technological developments; (19) the effects of mergers, acquisitions and divestitures; (20) natural or man-made catastrophes; (21) other risks and uncertainties that have not been identified at this time; (22) management’s response to these factors; and (23) other risk factors identified in Assured Guaranty’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the dates on which they are made. 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.

Assured Guaranty Ltd.

Selected Financial Highlights

(dollars in millions, except per share amounts)



			Three Months Ended						Nine Months Ended
			September 30,						September 30,
			2013			2012			2013			2012
Operating income reconciliation:
	Operating income		$	117		$	166		$	475		$	351
	Plus after-tax adjustments:
		Realized gains (losses) on investments	(3		)	0			18			(5		)
		Non-credit impairment unrealized fair value gains (losses) on credit derivatives	233			(37		)	(173		)	(394		)
		Fair value gains (losses) on committed capital securities	5			(2		)	(3		)	(8		)
		Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and loss adjustment expense ("LAE") reserves	10			4			(4		)	14
		Effect of consolidating financial guaranty variable interest entities ("FG VIEs")	22			11			146			78
	Net income (loss)		$	384		$	142		$	459		$	36


Earnings per diluted share:
	Operating income		$	0.64		$	0.85		$	2.51		$	1.85
	Plus after-tax adjustments:
		Realized gains (losses) on investments	(0.01		)	0.00			0.10			(0.02		)
		Non-credit impairment unrealized fair value gains (losses) on credit derivatives	1.26			(0.19		)	(0.92		)	(2.08		)
		Fair value gains (losses) on committed capital securities	0.03			(0.01		)	(0.01		)	(0.04		)
		Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	0.06			0.02			(0.02		)	0.07
		Effect of consolidating FG VIEs	0.11			0.06			0.77			0.41
	Net income (loss)		$	2.09		$	0.73		$	2.43		$	0.19

		Effective tax rate on operating income	28.1		%	22.5		%	27.2		%	24.2		%
		Effective tax rate on net income	28.2		%	20.6		%	29.7		%	3.7		%

Return on equity ("ROE") calculations ⁽¹⁾:
	ROE, excluding unrealized gain (loss) on investment portfolio		34.3		%	12.9		%	13.3		%	1.1		%
	Operating ROE		7.8		%	11.8		%	10.7		%	8.6		%

New business:
		Gross par written	$	2,615		$	3,189		$	6,485		$	12,775
		Present value of new business production ("PVP") ⁽²⁾	$	40		$	35		$	74		$	141

									As of
									September 30,			December 31,
Other information:									2013			2012
		Net debt service outstanding							$	709,643		$	780,356
		Net par outstanding							473,370			518,772
		Claims paying resources ⁽³⁾							12,023			12,328

1) Quarterly and year-to-date ROE calculations represent annualized returns.

2) Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

3) See page 7 for additional detail on claims paying resources.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Please refer to the Glossary for an explanation of changes in the presentation of net debt service and net par outstanding.

Assured Guaranty Ltd.

Consolidated Statements of Operations (unaudited)

(dollars in millions, except per share amounts)



				Three Months Ended						Nine Months Ended
				September 30,						September 30,
				2013			2012			2013			2012
Revenues:
	Net earned premiums			$	159		$	222		$	570		$	635
	Net investment income			99			102			286			301
	Net realized investment gains (losses)			(7		)	2			23			0
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		24			2			(44		)	(78		)
		Net unrealized gains (losses)		330			(38		)	(120		)	(388		)
			Net change in fair value of credit derivatives	354			(36		)	(164		)	(466		)
	Fair value gains (losses) on committed capital securities			9			(2		)	(4		)	(12		)
	Fair value gains (losses) on FG VIEs			40			34			253			161
	Other income			16			16			(5		)	112
		Total revenues		670			338			959			731

Expenses:
	Loss and loss adjustment expenses			55			86			69			446
	Amortization of deferred acquisition costs			4			4			8			14
	Interest expense			21			21			63			71
	Other operating expenses			54			48			166			163
		Total expenses		134			159			306			694

Income (loss) before income taxes				536			179			653			37
	Provision (benefit) for income taxes			152			37			194			1
Net income (loss)				$	384		$	142		$	459		$	36

Less after-tax adjustments:
	Realized gains (losses) on investments			(3		)	0			18			(5		)
	Non-credit impairment unrealized fair value gains (losses) on credit derivatives			233			(37		)	(173		)	(394		)
	Fair value gains (losses) on committed capital securities			5			(2		)	(3		)	(8		)
	Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves			10			4			(4		)	14
	Effect of consolidating FG VIEs			22			11			146			78
Operating income				$	117		$	166		$	475		$	351

Weighted average shares outstanding
	Basic shares outstanding			182.9			194.0			188.2			187.6
	Diluted shares outstanding ⁽¹⁾			183.9			194.7			189.1			189.3
	Shares outstanding at the end of period			182.2			194.0

Effect of refundings and terminations, net
	Net earned premiums from refundings and terminations			$	40		$	73		$	199		$	178
	Realized gains (losses) and other settlements from CDS terminations			0.1			0.4			14.8			1.3
	Operating income effect			26			47			131			118
	Operating income per diluted share effect			0.14			0.24			0.68			0.62


1)	Non-GAAP diluted shares outstanding were 183.9 million and 194.7 million for the three months ended September 30, 2013 and 2012, respectively, and 189.1 million and 189.3 million for the six months ended September 30, 2013 and 2012, respectively.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Net Income (Loss) Reconciliation to Operating Income

(dollars in millions) (1 of 2)



				Three Months Ended											Three Months Ended
				September 30, 2013											September 30, 2012
				GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results			GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results
Revenues:
	Net earned premiums			$	159		$	(14	)	(1	)	$	173		$	222		$	(17	)	(1	)	$	239
	Net investment income			99			2			(1	)	97			102			4			(1	)	98
	Net realized investment gains (losses)			(7		)	(5		)	(2	)	(2		)	2			0			(2	)	2
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		24			24					—			2			2					—
		Net unrealized gains (losses)		330			330					—			(38		)	(38		)			—
		Credit derivative revenues		—			(25		)			25			—			(33		)			33
			Net change in fair value of credit derivatives	354			329			(3	)	25			(36		)	(69		)	(3	)	33
	Fair value gains (losses) on committed capital securities			9			9			(4	)	—			(2		)	(2		)	(4	)	—
	Fair value gains (losses) on FG VIEs			40			40			(1	)	—			34			34			(1	)	—
	Other income			16			12			(5	)	4			16			1			(5	)	15
		Total revenues		670			373					297			338			(49		)			387

Expenses:
	Loss and loss adjustment expenses:
		Financial guaranty insurance		55			(10		)	(1	)	65			86			(3		)	(1	)	89
		Credit derivatives		—			9			(3	)	(9		)	—			(11		)	(3	)	11
	Amortization of deferred acquisition costs			4			—					4			4			—					4
	Interest expense			21			—					21			21			—					21
	Other operating expenses			54			—					54			48			—					48
		Total expenses		134			(1		)			135			159			(14		)			173

Income (loss) before income taxes				536			374					162			179			(35		)			214
	Provision (benefit) for income taxes			152			107			(6	)	45			37			(11		)	(6	)	48
Net income (loss)				$	384		$	267				$	117		$	142		$	(24	)			$	166


1)	Adjustments primarily related to elimination of the effects of consolidating FG VIEs.


2)	Adjustments to eliminate realized gains (losses) on available-for-sale investments.


3)	Adjustments to eliminate non-economic fair value gains (losses) on credit derivatives and reclassification to revenues and loss expense.


4)	Adjustments to eliminate fair value gain (loss) on committed capital securities.


5)	Adjustments primarily related to elimination of foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves.


6)	Tax effect of the above adjustments.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Net Income (Loss) Reconciliation to Operating Income

(dollars in millions) (2 of 2)



				Nine Months Ended											Nine Months Ended
				September 30, 2013											September 30, 2012
				GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results			GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results
Revenues:
	Net earned premiums			$	570		$	(47	)	(1	)	$	617		$	635		$	(50	)	(1	)	$	685
	Net investment income			286			1			(1	)	285			301			10			(1	)	291
	Net realized investment gains (losses)			23			27			(2	)	(4		)	0			(6		)	(2	)	6
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		(44		)	(44		)			—			(78		)	(78		)			—
		Net unrealized gains (losses)		(120		)	(120		)			—			(388		)	(388		)			—
		Credit derivative revenues		—			(93		)			93			—			(96		)			96
			Net change in fair value of credit derivatives	(164		)	(257		)	(3	)	93			(466		)	(562		)	(3	)	96
	Fair value gains (losses) on committed capital securities			(4		)	(4		)	(4	)	—			(12		)	(12		)	(4	)	—
	Fair value gains (losses) on FG VIEs			253			253			(1	)	—			161			161			(1	)	—
	Other income			(5		)	(10		)	(5	)	5			112			10			(5	)	102
		Total revenues		959			(37		)			996			731			(449		)			1,180

Expenses:
	Loss and loss adjustment expenses:
		Financial guaranty insurance		69			(25		)	(1	)	94			446			(14		)	(1	)	460
		Credit derivatives		—			(13		)	(3	)	13			—			(9		)	(3	)	9
	Amortization of deferred acquisition costs			8			—					8			14			—					14
	Interest expense			63			—					63			71			—					71
	Other operating expenses			166			—					166			163			—					163
		Total expenses		306			(38		)			344			694			(23		)			717

Income (loss) before income taxes				653			1					652			37			(426		)			463
	Provision (benefit) for income taxes			194			17			(6	)	177			1			(111		)	(6	)	112
Net income (loss)				$	459		$	(16	)			$	475		$	36		$	(315	)			$	351


1)	Adjustments primarily related to elimination of the effects of consolidating FG VIEs.


2)	Adjustments to eliminate realized gains (losses) on available-for-sale investments.


3)	Adjustments to eliminate non-economic fair value gains (losses) on credit derivatives and reclassification to revenues and loss expense.


4)	Adjustments to eliminate fair value gain (loss) on committed capital securities.


5)	Adjustments primarily related to elimination of foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves.


6)	Tax effect of the above adjustments.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Consolidated Balance Sheets (unaudited)

(dollars in millions)



		As of:
		September 30,		December 31,
		2013		2012
Assets:
	Investment portfolio:
	Fixed maturity securities, available-for-sale, at fair value	$	9,873	$	10,056
	Short-term investments, at fair value	761		817
	Other invested assets	126		212
	Total investment portfolio	10,760		11,085

	Cash	106		138
	Premiums receivable, net of ceding commissions payable	906		1,005
	Ceded unearned premium reserve	480		561
	Deferred acquisition costs	125		116
	Reinsurance recoverable on unpaid losses	59		58
	Salvage and subrogation recoverable	275		456
	Credit derivative assets	106		141
	Deferred tax asset, net	767		721
	FG VIE assets, at fair value	2,515		2,688
	Other assets	255		273
Total assets		$	16,354	$	17,242

Liabilities and shareholders' equity:
Liabilities:
	Unearned premium reserve	$	4,676	$	5,207
	Loss and loss adjustment expense reserve	601		601
	Reinsurance balances payable, net	160		219
	Long-term debt	819		836
	Credit derivative liabilities	2,027		1,934
	FG VIE liabilities with recourse, at fair value	1,828		2,090
	FG VIE liabilities without recourse, at fair value	1,047		1,051
	Other liabilities	362		310
Total liabilities		11,520		12,248

Shareholders' equity:
	Common stock	2		2
	Additional paid-in capital	2,471		2,724
	Retained earnings	2,151		1,749
	Accumulated other comprehensive income	206		515
	Deferred equity compensation	4		4
Total shareholders' equity		4,834		4,994
Total liabilities and shareholders' equity		$	16,354	$	17,242

Assured Guaranty Ltd.

Adjusted Book Value

(dollars in millions, except per share amounts)



			As of:
			September 30, 2013						December 31, 2012
			Total			Per Share			Total			Per Share
Reconciliation of shareholders' equity to adjusted book value:
	Shareholders' equity		$	4,834		$	26.53		$	4,994		$	25.74
	Less after-tax adjustments:
		Effect of consolidating FG VIEs	(209		)	(1.14		)	(348		)	(1.79		)
		Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(1,192		)	(6.55		)	(988		)	(5.09		)
		Fair value gains (losses) on committed capital securities	20			0.11			23			0.12
		Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	175			0.96			477			2.45
	Operating shareholders' equity		6,040			33.15			5,830			30.05
	After-tax adjustments:
		Less: Deferred acquisition costs	162			0.89			165			0.85
		Plus: Net present value of estimated net future credit derivative revenue	173			0.95			220			1.14
		Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	2,978			16.34			3,266			16.83
	Adjusted book value		$	9,029		$	49.55		$	9,151		$	47.17

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Claims Paying Resources

(dollars in millions)



		As of September 30, 2013
		Assured Guaranty Municipal Corp.		Assured Guaranty Corp.		Municipal Assurance Corp.⁽²⁾		Assured Guaranty Re Ltd. ⁽³⁾		Eliminations⁽⁴⁾			Consolidated
Claims paying resources
Policyholders' surplus		$	1,741	$	708	$	491	$	1,039	$	(791	)	$	3,188
Contingency reserve⁽¹⁾⁽²⁾		1,717		1,110		308		—		(308		)	2,827
	Qualified statutory capital	3,458		1,818		799		1,039		(1,099		)	6,015
Unearned premium reserve⁽¹⁾⁽²⁾		1,902		740		691		938		(691		)	3,580
Loss and LAE reserves ^{(5) (6)}		220		184		—		289		—			693
	Total policyholders' surplus and reserves	5,580		2,742		1,490		2,266		(1,790		)	10,288
Present value of installment premium⁽¹⁾⁽⁶⁾		409		282		6		209		(6		)	900
Standby line of credit/stop loss		200		200		—		—		—			400
Excess of loss reinsurance facility		435		435		—		—		(435		)	435
	Total claims paying resources (including MAC adjustment for AGM and AGC)	6,624		3,659		1,496		2,475		(2,231		)	12,023
	Adjustment for MAC	908		588		—		—		(1,496		)	—
	Total claims paying resources (excluding MAC adjustment for AGM and AGC)	$	5,716	$	3,071	$	1,496	$	2,475	$	(735	)	$	12,023

Statutory net par outstanding ⁽⁷⁾		$	170,138	$	61,260	$	99,521	$	113,910	$	4,966		$	449,795
Equity method adjustment ⁽⁸⁾		60,409		39,112		—		—		(99,521		)	—
Adjusted statutory net par outstanding ⁽⁷⁾		$	230,547	$	100,372	$	99,521	$	113,910	$	(94,555	)	$	449,795

Net debt service outstanding ⁽⁷⁾		$	256,802	$	87,141	$	149,849	$	180,623	$	9,825		$	684,240
Equity method adjustment ⁽⁸⁾		90,958		58,891		—		—		(149,849		)	—
Adjusted net debt service outstanding ⁽⁷⁾		$	347,760	$	146,032	$	149,849	$	180,623	$	(140,024	)	$	684,240

Ratios:
	Adjusted net par outstanding to qualified statutory capital	67:1		55:1		125:1		110:1		N/A			75:1
Capital ratio ⁽⁹⁾		101:1		80:1		188:1		174:1		N/A			114:1
Financial resources ratio ⁽¹⁰⁾		53:1		40:1		100:1		73:1		N/A			57:1


1)	The numbers shown for Assured Guaranty Municipal Corp. (AGM) and Assured Guaranty Corp. (AGC) have been adjusted to include their indirect share of Municipal Assurance Corp. (MAC). See footnote 2 below for additional detail.

Assured Guaranty US Holdings Inc. acquired Municipal and Infrastructure Assurance Corporation, which it has renamed MAC, from Radian Asset Assurance Inc. (Radian) in May 2012. In July 2013, Municipal Assurance Holdings Inc. (MAC Holdings) was formed to own 100% of MAC's outstanding stock. AGM and AGC subscribed for 60.7% and 39.3% of the MAC Holdings outstanding stock. In July 2013, MAC was launched as a new US municipal only bond insurance company with $1.5 billion in claims-paying resources and capitalized to approximately $800 million through cash and securities.


3)	Assured Guaranty Re Ltd. (AG Re) numbers represent the Company's estimate of U.S. statutory accounting practices prescribed or permitted by insurance regulatory authorities.


4)	In 2009, AGC issued a $300 million note payable to AGM. Net par and net debt service outstanding eliminations relate to second-to-pay policies under which an Assured Guaranty insurance subsidiary guarantees an obligation already insured by another Assured Guaranty insurance subsidiary, and net par related intercompany cessions from AGM and AGC to MAC.


5)	Reserves are reduced by approximately $0.8 billion for benefit related to representation and warranty recoverables.


6)	Includes financial guaranty insurance and credit derivatives.

Net par outstanding and net debt service outstanding are presented on a separate company statutory basis. Under statutory accounting, such amounts would be reduced both when an outstanding issue is legally defeased (i.e., an issuer has legally discharged its obligations with respect to a municipal security by satisfying conditions set forth in defeasance provisions contained in transaction documents and is no longer responsible for the payment of debt service with respect to such obligations) and when such issue is economically defeased (i.e., transaction documents for a municipal security do not contain defeasance provisions but the issuer establishes an escrow account with U.S. government securities in amounts sufficient to pay the refunded bonds when due; the refunded bonds are not considered paid and continue to be outstanding under the transaction documents and the issuer remains responsible to pay debt service when due to the extent monies on deposit in the escrow account are insufficient for such purpose).


8)	Equity method adjustment is an adjustment made to reflect AGM's and AGC's net exposure to MAC, as determined by their indirect equity ownership.


9)	The capital ratio is calculated by dividing adjusted net debt service outstanding by qualified statutory capital.


10)	The financial resources ratio is calculated by dividing adjusted net debt service outstanding by total claims paying resources (including MAC adjustment for AGM and AGC).

Please refer to the Glossary for an explanation of changes in the presentation of net debt service and net par outstanding.

Assured Guaranty Ltd.

New Business Production

(dollars in millions)



			Three Months Ended					Nine Months Ended
			September 30,					September 30,
			2013		2012			2013		2012
New business production analysis:
	PVP
	Public finance - U.S.:
		Assumed from Radian	$	—	$	—		$	—	$	22
		Other	24		30			55		107
	Public finance - non-U.S.		13		—			13		1
	Structured finance - U.S.		3		5			6		11
	Structured finance - non-U.S.		—		—			—		—
	Total PVP		$	40	$	35		$	74	$	141

Reconciliation of PVP to Gross premiums written ("GPW"):

	PVP of financial guaranty insurance		$	40	$	35		$	74	$	141
		Less: financial guaranty installment premium PVP	18		5			19		12
	Total: financial guaranty upfront gross written premiums		22		30			55		129
		Plus: financial guaranty installment GWP ⁽¹⁾	4		(5		)	10		15
	Total GWP		$	26	$	25		$	65	$	144


Financial guaranty gross par written:
	Public finance - U.S.:
		Assumed from Radian	$	—	$	—		$	—	$	1,797
		Other	2,072		3,007			5,928		10,723
	Public finance - non-U.S.		270		—			270		35
	Structured finance - U.S.		273		182			287		220
	Structured finance - non-U.S.		—		—			—		—
	Total		$	2,615	$	3,189		$	6,485	$	12,775


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

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Financial Guaranty Gross Par Written

(dollars in millions)

Financial Guaranty Gross Par Written by Asset Type



			Three Months Ended			Nine Months Ended
			September 30, 2013			September 30, 2013
			Gross Par Written		Avg. Internal Rating	Gross Par Written		Avg. Internal Rating
Sector:
U.S. public finance
	General obligation		$	767	A-	$	3,006	A-
	Tax backed		472		A	1,028		A
	Municipal utilities		357		A-	983		A-
	Transportation		310		BBB+	641		A-
	Healthcare		53		BBB+	111		BBB+
	Higher education		51		A-	82		A-
	Infrastructure finance		62		A	77		A
		Total U.S. public finance	2,072		A-	5,928		A-
Non-U.S. public finance:
		Total non-U.S. public finance	270		BBB-	270		BBB-
Total public finance			$	2,342	A-	$	6,198	A-

U.S. structured finance:
	Commercial receivables		273		AA	273		AA
	Other structure finance		—		—	14		A-
		Total U.S. structured finance	273		AA	287		AA
Non-U.S. structured finance:
		Total non-U.S. structured finance	—		—	—		—
Total structured finance			$	273	AA	$	287	AA

Total gross par written			$	2,615	A-	$	6,485	A-

Please refer to the Glossary for a description of internal ratings and sectors.

Assured Guaranty Ltd.

New Business Production by Quarter

(dollars in millions)



																		Nine Months
		1Q-12		2Q-12			3Q-12			4Q-12		1Q-13		2Q-13		3Q-13		2012		2013
PVP:
Public finance - U.S.:
	Assumed from Radian	$	22	$	—		$	—		$	—	$	—	$	—	$	—	$	22	$	—
	Other	30		47			30			37		16		15		24		107		55
Public finance - non-U.S.		—		1			—			—		—		—		13		1		13
Structured finance - U.S.		4		2			5			32		2		1		3		11		6
Structured finance - non-U.S.		—		—			—			—		—		—		—		—		—
Total PVP		$	56	$	50		$	35		$	69	$	18	$	16	$	40	$	141	$	74

Reconciliation of PVP to Gross premiums written ("GPW"):

Total PVP of financial guarantee insurance		$	56	$	50		$	35		$	69	$	18	$	16	$	40	$	141	$	74
	Less: financial guaranty installment premium PVP	4		3			5			33		1		—		18		12		19
Total: financial guaranty upfront GWP		52		47			30			36		17		16		22		129		55
	Plus: financial guaranty installment GWP⁽¹⁾	36		(16		)	(5		)	73		—		6		4		15		10
Total GWP		$	88	$	31		$	25		$	109	$	17	$	22	$	26	$	144	$	65

Financial guaranty gross par written:
Public finance - U.S.:
	Assumed from Radian	$	1,797	$	—		$	—		$	—	$	—	$	—	$	—	$	1,797	$	—
	Other	3,046		4,670			3,007			3,641		1,580		2,276		2,072		10,723		5,928
Public finance - non-U.S.		—		35			—			—		—		—		270		35		270
Structured finance - U.S.		38		—			182			400		14		—		273		220		287
Structured finance - non-U.S.		—		—			—			—		—		—		—		—		—
	Total	$	4,881	$	4,705		$	3,189		$	4,041	$	1,594	$	2,276	$	2,615	$	12,775	$	6,485


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

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Available-for-Sale Investment Portfolio and Cash

As of September 30, 2013

(dollars in millions)



			Amortized Cost			Pre-Tax Book Yield		After-Tax Book Yield		Fair Value		Annualized Investment Income ⁽¹⁾
Investment portfolio, available-for-sale:
Fixed maturity securities:
	U.S. Treasury securities and obligations of U.S. government agencies		$	444		1.98	%	1.36	%	$	455	$	9
	Agency obligations		240			3.82	%	3.15	%	262		9
	Foreign government securities		292			2.51	%	1.65	%	305		7
	Obligations of states and political subdivisions		3,768			4.01	%	3.79	%	3,903		151
	Insured obligations of state and political subdivisions⁽²⁾⁽⁴⁾		1,279			4.67	%	4.41	%	1,346		60
	Corporate securities		1,308			3.87	%	3.00	%	1,345		51
	Mortgage-backed securities ("MBS")⁽³⁾:
		Residential MBS ("RMBS") ⁽⁴⁾	1,286			6.23	%	4.61	%	1,213		80
		Commercial MBS ("CMBS")	507			3.83	%	3.25	%	523		19
	Asset-backed securities		592			5.44	%	3.65	%	614		32
		Total fixed maturity securities	9,716			4.31	%	3.64	%	9,966		418
Short-term investments			760			0.02	%	0.01	%	760		0
Cash ⁽⁵⁾			105			—	%	—	%	105		—
		Total	$	10,581		4.00	%	3.38	%	$	10,831	$	418

Less: FG VIEs			127			10.21	%	6.64	%	91		13

		Total	$	10,454		3.92	%	3.34	%	$	10,740	$	405



Ratings⁽⁶⁾:			Fair Value			% of Portfolio
	U.S. Treasury securities and obligations of U.S. government agencies		$	455		4.6	%
	Agency obligations		262			2.6	%
	AAA/Aaa		1,470			14.8	%
	AA/Aa		5,027			50.4	%
	A/A		1,779			17.8	%
	BBB		100			1.0	%
	Below investment grade ("BIG")⁽⁷⁾		873			8.8	%
		Total fixed maturity securities, available-for-sale	9,966			100.0	%

	Less: FG VIEs		(93		)

		Total fixed maturity securities, available-for-sale	$	9,873


Duration of fixed maturity securities and short-term investments (in years):						5.0

Average ratings of fixed maturity securities and short-term investments						AA-


1)	Represents annualized investment income based on amortized cost and pre-tax book yields.


2)	Reflects obligations of state and local political subdivisions that have been insured by other financial guarantors. The underlying ratings of these bonds, after giving effect to the lower of the rating assigned by Standard & Poor's Ratings Services ("S&P") or Moody's Investors Service, Inc. ("Moody's"), average A+. Includes fair value of $321 million insured by AGC and AGM.


3)	Includes fair value of $193 million in subprime RMBS, which has an average rating of BIG.


4)	Includes securities purchased or obtained as part of loss mitigation or other risk management strategies.


5)	Represents operating cash and is not included in yield calculations.


6)	Ratings are represented by the lower of the Moody's and S&P classifications except for bonds purchased for loss mitigation or risk management strategies ("loss mitigation bonds") which use internal ratings classifications.


7)	Includes below investment grade securities that were purchased or obtained as part of loss mitigation or other risk management strategies of $2,149 million in par with carrying value of $873 million.

Assured Guaranty Ltd.

Estimated Net Exposure Amortization⁽¹⁾ and Estimated Future Net Premium

and Credit Derivative Revenues

(dollars in millions)



						Financial Guaranty Insurance ⁽²⁾
		Estimated Net Debt Service Amortization ⁽⁵⁾		Estimated Ending Net Debt Service Outstanding ⁽⁵⁾		Expected PV Net Earned Premiums		Accretion of Discount		Future Net Premiums Earned ⁽³⁾		Future Credit Derivative Revenues ⁽⁴⁾		Total

2013 (as of September 30)				$	709,643
2013 Q4		$	14,946	694,697		$	124	$	6	$	130	$	19	$	149
2014		63,205		631,492		465		22		487		68		555
2015		58,511		572,981		400		21		421		46		467
2016		46,955		526,026		351		20		371		33		404
2017		45,013		481,013		313		18		331		23		354

2013-2017		228,630		481,013		1,653		87		1,740		189		1,929
2018-2022		157,855		323,158		1,193		70		1,263		52		1,315
2023-2027		126,938		196,220		753		46		799		31		830
2028-2032		89,743		106,477		455		27		482		25		507
After 2032		106,477		—		427		21		448		30		478
	Total	$	709,643			$	4,481	$	251	$	4,732	$	327	$	5,059


1)	Represents the future expected amortization of current debt service outstanding (principal and interest), assuming no advance refundings, as of September 30, 2013. Actual amortization differs from expected maturities because borrowers may have the right to call or prepay guaranteed obligations and because of management's assumptions on structured finance amortization.


2)	See page 14 for ‘‘Present Value of Financial Guaranty Insurance Net Expected Loss to be Expensed.’’


3)	Includes $202 million in future net premiums earned related to FG VIEs.


4)	Excludes contracts with credit impairment.


5)	Amount is shown net of loss mitigation bonds.

Please refer to the Glossary for an explanation of changes in the presentation of net debt service outstanding.

Assured Guaranty Ltd.

Expected Amortization of Net Par Outstanding

(dollars in millions)

Structured Finance



		Estimated Net Par Amortization
		U.S. and Non-U.S. Pooled Corporate		U.S. RMBS		Financial Products		Other Structured Finance		Total		Estimated Ending Net Par Outstanding

2013 (as of September 30)												$	77,255
2013 Q4		$	1,721	$	636	$	73	$	598	$	3,028	74,227
2014		13,682		2,655		433		1,455		18,225		56,002
2015		11,003		2,470		235		1,996		15,704		40,298
2016		6,135		2,148		137		1,792		10,212		30,086
2017		8,480		1,228		68		1,530		11,306		18,780

2013-2017		41,021		9,137		946		7,371		58,475		18,780
2018-2022		1,680		3,717		318		3,339		9,054		9,726
2023-2027		485		951		277		1,864		3,577		6,149
2028-2032		395		269		579		703		1,946		4,203
After 2032		1,928		446		612		1,217		4,203		—
	Total structured finance	$	45,509	$	14,520	$	2,732	$	14,494	$	77,255

Public Finance



		Estimated Net Par Amortization		Estimated Ending Net Par Outstanding

2013 (as of September 30)				$	396,115
2013 Q4		$	6,759	389,356
2014		25,513		363,843
2015		24,807		339,036
2016		20,033		319,003
2017		18,177		300,826

2013-2017		95,289		300,826
2018-2022		83,980		216,846
2023-2027		78,564		138,282
2028-2032		60,322		77,960
After 2032		77,960		—
	Total public finance	$	396,115

Net par outstanding (end of period)



		1Q-12		2Q-12		3Q-12		4Q-12		1Q-13		2Q-13		3Q-13
Public finance - U.S.		$	416,499	$	409,877	$	399,176	$	387,929	$	378,418	$	371,020	$	361,203
Public finance - non-U.S.		39,913		38,769		38,720		37,540		35,067		33,700		34,912
Structured finance - U.S.		87,361		82,893		77,893		74,535		70,129		65,159		62,584
Structured finance - non-U.S.		21,979		19,935		19,070		18,768		17,092		15,915		14,671
	Net par outstanding (excluding loss mitigation bonds)	565,752		551,474		534,859		518,772		500,706		485,794		473,370
Loss mitigation bonds		1,346		1,460		1,534		1,121		1,111		1,195		1,297
	Net par outstanding (including loss mitigation bonds)	$	567,098	$	552,934	$	536,393	$	519,893	$	501,817	$	486,989	$	474,667

Please refer to the Glossary for an explanation of changes in the presentation of net par outstanding and of the various sectors.

Assured Guaranty Ltd.

Present Value ("PV") of Financial Guaranty Insurance Net Expected Loss to be Expensed

As of September 30, 2013

(dollars in millions)



		Net Expected Loss to be Expensed ⁽¹⁾
		Operating⁽²⁾		GAAP⁽²⁾

2013 Q4		$	13	$	12
2014		58		43
2015		54		40
2016		45		34
2017		39		29

2013-2017		209		158
2018-2022		128		103
2023-2027		68		54
2028-2032		39		30
After 2032		38		28
	Total expected PV of net expected loss to be expensed	482		373
Discount		471		421
	Total future value	$	953	$	794


1)	The present value of net expected loss to be paid is discounted using weighted-average risk free rates ranging from 0.0% to 4.36% for U.S. dollar denominated obligations.


2)	Operating income includes net expected loss to be expensed on consolidated FG VIEs. Losses on consolidated FG VIEs are eliminated for GAAP.

Assured Guaranty Ltd.

Financial Guaranty Profile (1 of 4)

(dollars in millions)

Net Par Outstanding and Average Rating by Asset Type



			September 30, 2013							December 31, 2012
			Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		Net Par Outstanding (excluding loss mitigation bonds)		Avg. Internal Rating	Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		Net Par Outstanding (excluding loss mitigation bonds)		Avg. Internal Rating
U.S. public finance:
	General obligation		$	158,972	$	—	$	158,972	A+	$	169,985	$	—	$	169,985	A+
	Tax backed		68,608		34		68,574		A+	73,787		38		73,749		A+
	Municipal utilities		58,363		—		58,363		A	62,116		—		62,116		A
	Transportation		31,189		—		31,189		A	33,799		—		33,799		A
	Healthcare		16,635		—		16,635		A	17,838		—		17,838		A
	Higher education		14,336		—		14,336		A	15,770		—		15,770		A+
	Infrastructure finance		4,105		—		4,105		BBB	4,210		—		4,210		BBB
	Housing		3,608		—		3,608		A+	4,633		—		4,633		AA-
	Investor-owned utilities		1,024		—		1,024		A-	1,069		—		1,069		A-
	Other public finance		4,397		—		4,397		A	4,760		—		4,760		A
		Total U.S. public finance	361,237		34		361,203		A	387,967		38		387,929		A
Non-U.S. public finance:
	Infrastructure finance		14,857		—		14,857		BBB	15,812		—		15,812		BBB
	Regulated utilities		11,216		—		11,216		BBB+	12,494		—		12,494		BBB+
	Pooled infrastructure		3,177		—		3,177		AA-	3,200		—		3,200		AA-
	Other public finance		5,662		—		5,662		A	6,034		—		6,034		A
		Total non-U.S. public finance	34,912		—		34,912		BBB+	37,540		—		37,540		BBB+
Total public finance			$	396,149	$	34	396,115		A	$	425,507	$	38	$	425,469	A

U.S. structured finance:
	Pooled corporate obligations		$	33,974	$	—	$	33,974	AAA	$	41,886	$	—	41,886		AAA
	RMBS		15,362		842		14,520		BB+	17,827		792		17,035		BB+
	CMBS and other commercial real estate related exposures		3,994		—		3,994		AAA	4,247		—		4,247		AAA
	Insurance securitizations		3,363		300		3,063		A-	3,113		170		2,943		BBB+
	Financial products		2,732		—		2,732		AA-	3,653		—		3,653		AA-
	Consumer receivables		2,223		—		2,223		BBB	2,369		—		2,369		BBB+
	Commercial receivables		969		—		969		A	1,025		—		1,025		BBB+
	Structured credit		184		121		63		BB	319		121		198		B
	Other structured finance		1,046		—		1,046		A-	1,179		—		1,179		BBB+
		Total U.S. structured finance	63,847		1,263		62,584		AA-	75,618		1,083		74,535		AA-

Non-U.S. structured finance:
	Pooled corporate obligations		11,535		—		11,535		AAA	14,813		—		14,813		AAA
	Commercial receivables		1,308		—		1,308		BBB+	1,463		—		1,463		A-
	RMBS		1,162		—		1,162		AA-	1,424		—		1,424		AA-
	Structured credit		288		—		288		BBB	591		—		591		BBB
	CMBS and other commercial real estate related exposures		—		—		—		—	100		—		100		AAA
	Other structured finance		378		—		378		AAA	377		—		377		AAA
		Total non-U.S. structured finance	14,671		—		14,671		AA+	18,768		—		18,768		AA+
Total structured finance			$	78,518	$	1,263	$	77,255	AA-	$	94,386	$	1,083	$	93,303	AA-

Total			$	474,667	$	1,297	$	473,370	A	$	519,893	$	1,121	$	518,772	A+

Please refer to the Glossary for an explanation of changes in the presentation of net par outstanding and in the Company's internal rating approach, and of the various sectors.

Assured Guaranty Ltd.

Financial Guaranty Profile (2 of 4)

As of September 30, 2013

(dollars in millions)

Distribution by Ratings of Financial Guaranty Portfolio



		Public Finance - U.S.				Public Finance - Non-U.S.				Structured Finance - U.S.				Structured Finance - Non-U.S.				Consolidated
Ratings:		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%
AAA		$	4,169	1.2	%	$	1,711	4.9	%	$	34,924	55.8	%	$	10,125	69.0	%	$	50,929	10.8	%
AA		112,319		31.1	%	488		1.4	%	9,438		15.1	%	590		4.0	%	122,835		25.9	%
A		197,403		54.6	%	9,358		26.8	%	2,587		4.1	%	797		5.5	%	210,145		44.4	%
BBB		42,684		11.8	%	21,729		62.2	%	4,329		6.9	%	2,162		14.7	%	70,904		15.0	%
BIG		4,628		1.3	%	1,626		4.7	%	11,306		18.1	%	997		6.8	%	18,557		3.9	%
	Net Par Outstanding (excluding loss mitigation bonds)	$	361,203	100.0	%	$	34,912	100.0	%	$	62,584	100.0	%	$	14,671	100.0	%	$	473,370	100.0	%

Loss Mitigation Bonds		34				—				1,263				—				1,297
	Net Par Outstanding (including loss mitigation bonds)	$	361,237			$	34,912			$	63,847			$	14,671			$	474,667

Please refer to the Glossary for an explanation of changes in the presentation of net par outstanding and in the Company's internal rating approach, and of the various sectors.

Assured Guaranty Ltd.

Financial Guaranty Profile (3 of 4)

As of September 30, 2013

(dollars in millions)

Geographic Distribution of Financial Guaranty Portfolio



			Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		Net Par Outstanding (excluding loss mitigation bonds)		% of Total
U.S.:
Public finance
	California		$	53,431	$	34	$	53,397	11.3	%
	New York		29,401		—		29,401		6.2	%
	Pensylvania		29,153		—		29,153		6.2	%
	Texas		27,761		—		27,761		5.9	%
	Illinois		24,738		—		24,738		5.2	%
	Florida		22,523		—		22,523		4.8	%
	New Jersey		14,938		—		14,938		3.2	%
	Michigan		14,613		—		14,613		3.1	%
	Georgia		9,517		—		9,517		2.0	%
	Ohio		9,428		—		9,428		2.0	%
	Other states		125,734		—		125,734		26.6	%
		Total public finance	361,237		34		361,203		76.5	%
	Structured finance (multiple states)		63,847		1,263		62,584		13.2	%
		Total U.S.	425,084		1,297		423,787		89.7	%

Non-U.S.:
	United Kingdom		21,427		—		21,427		4.5	%
	Australia		6,267		—		6,267		1.3	%
	Canada		3,985		—		3,985		0.8	%
	France		3,659		—		3,659		0.8	%
	Italy		1,878		—		1,878		0.4	%
	Other		12,367		—		12,367		2.5	%
		Total non-U.S.	49,583		—		49,583		10.3	%

Total net par outstanding			$	474,667	$	1,297	$	473,370	100.0	%

Please refer to the Glossary for an explanation of changes in the presentation of net par outstanding and of the various sectors.

Assured Guaranty Ltd.

Financial Guaranty Profile (4 of 4)

As of September 30, 2013

(dollars in millions)

Net Economic Exposure to Selected European Countries



			Greece		Hungary		Ireland		Italy		Portugal		Spain		Total
Sovereign and sub-sovereign exposure:
	Public finance		$	—	$	—	$	—	$	1,020	$	101	$	271	$	1,392
	Infrastructure finance		—		417		24		85		96		171		793
		Total sovereign and sub-sovereign exposure	—		417		24		1,105		197		442		2,185
Non-sovereign exposure:
	Regulated utilities		—		—		—		229		—		—		229
	RMBS		—		220		142		314		—		—		676
	Commercial receivables		—		0		9		62		14		2		87
	Pooled corporate obligations		17		—		103		168		15		502		805
		Total non-sovereign exposure	17		220		254		773		29		504		1,797
		Total	$	17	$	637	$	278	$	1,878	$	226	$	946	$	3,982

		Total BIG	$	—	$	599	$	7	$	1	$	113	$	425	$	1,145

Note: While the Company’s exposures are shown in U.S. dollars, the obligations the Company insures are in various currencies, including U.S. dollars, Euros and British pounds sterling. Included in the tables above is $142 million of reinsurance assumed on a 2004 - 2006 pool of Irish residential mortgages that is part of the Company’s remaining legacy mortgage reinsurance business. One of the residential mortgage-backed securities included in the table above includes residential mortgages in both Italy and Germany, and only the portion of the transaction equal to the portion of the original mortgage pool in Italian mortgages is shown in the table.

Please refer to the Glossary for an explanation of the Company's net par outstanding, internal rating approach and of the various sectors.

Assured Guaranty Ltd.

Direct Pooled Corporate Obligations Profile

As of September 30, 2013

(dollars in millions)

Distribution of Direct Pooled Corporate Obligations by Ratings



			Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement
Ratings:
	AAA		$	37,714	83.7	%	29.9	%	30.7	%
	AA		1,999		4.4	%	39.4	%	33.9	%
	A		659		1.5	%	46.2	%	46.8	%
	BBB		2,197		4.9	%	38.5	%	32.5	%
	BIG		2,510		5.5	%	35.2	%	19.3	%
		Total exposures	$	45,079	100.0	%	31.3	%	30.5	%

Distribution of Direct Pooled Corporate Obligations by Asset Class



			Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement		Avg. Rating
Asset class:
	CBOs/CLOs		$	23,704	52.5	%	31.2	%	33.1	%	AAA
	Synthetic investment grade pooled corporates		9,716		21.6	%	21.6	%	19.7	%	AAA
	Market value CDOs of corporates		3,112		6.9	%	31.2	%	31.9	%	AAA
	Synthetic high yield pooled corporates		2,690		6.0	%	47.2	%	41.1	%	AAA
	Trust preferred
		Banks and insurance	2,655		5.9	%	45.9	%	38.9	%	BBB
		U.S. mortgage and real estate investment trusts	1,672		3.7	%	50.1	%	34.9	%	BB
		European mortgage and real estate investment trusts	837		1.9	%	36.8	%	31.8	%	BBB-
	Other pooled corporates		693		1.5	%	0.0	%	0.0	%	BBB-
		Total exposures	$	45,079	100.0	%	31.3	%	30.5	%	AAA

Please refer to the Glossary for an explanation of internal ratings, performance indicators and sectors.

Assured Guaranty Ltd.

Consolidated U.S. RMBS Profile

As of September 30, 2013

(dollars in millions)

Distribution of U.S. RMBS by Rating and Type of Exposure



Ratings:			Prime First Lien		Closed End Seconds		HELOC		Alt-A First Lien		Option ARMs		Subprime First Lien		Total Net Par Outstanding
	AAA		$	1	$	0	$	23	$	229	$	4	$	2,260	$	2,517
	AA		102		102		108		418		326		1,712		2,768
	A		1		0		9		18		26		99		154
	BBB		39		—		269		528		25		282		1,143
	BIG		417		150		1,955		2,801		633		1,983		7,938
		Total exposures	$	561	$	252	$	2,365	$	3,993	$	1,014	$	6,335	$	14,520

Distribution of U.S. RMBS by Year Insured⁽¹⁾ and Type of Exposure



Year insured:			Prime First Lien		Closed End Seconds		HELOC		Alt-A First Lien		Option ARMs		Subprime First Lien		Total Net Par Outstanding
	2004 and prior		$	24	$	1	$	196	$	88	$	31	$	1,275	$	1,615
	2005		163		—		576		538		46		205		1,527
	2006		95		52		717		324		86		2,588		3,862
	2007		278		199		875		1,990		794		2,194		6,330
	2008		—		—		—		1,054		58		74		1,186
		Total exposures	$	561	$	252	$	2,365	$	3,993	$	1,014	$	6,335	$	14,520

Distribution of U.S. RMBS by Rating and Year Insured



Year insured:			AAA Rated			AA Rated			A Rated			BBB Rated			BIG Rated			Total
	2004 and prior		$	1,008		$	131		$	52		$	93		$	332		$	1,615
	2005		106			180			2			96			1,144			1,527
	2006		1,317			1,241			59			195			1,049			3,862
	2007		9			1,158			41			760			4,362			6,330
	2008		77			58			—			—			1,051			1,186
		Total exposures	$	2,517		$	2,768		$	154		$	1,143		$	7,938		$	14,520

	% of Total		17.3		%	19.1		%	1.1		%	7.8		%	54.7		%	100.0		%


1)	Assured Guaranty has not insured any U.S. RMBS transactions since 2008.

Please refer to the Glossary for an explanation of changes in the Company's internal rating approach, presentation of net par outstanding, and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Direct U.S. RMBS Profile (1 of 2)

As of September 30, 2013

(dollars in millions)

Distribution of Direct U.S. RMBS Insured January 1, 2005 or Later by Exposure Type, Average Pool Factor, Subordination, Cumulative Losses and 60+ Day Delinquencies

U.S. Prime First Lien



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	161	23.9	%	5.2	%	2.5	%	12.4	%	6
	2006		95		47.3	%	8.4	%	0.8	%	17.8	%	1
	2007		278		34.7	%	3.2	%	6.5	%	19.1	%	1
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	534	33.7	%	4.7	%	4.3	%	16.8	%	8

U.S. Closed End Seconds



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	—	—	%	—	%	—	%	—	%	—
	2006		43		10.9	%	—	%	60.6	%	5.0	%	1
	2007		199		12.7	%	—	%	69.8	%	5.9	%	8
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	242	12.4	%	—	%	68.2	%	5.7	%	9

U.S. HELOC



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	536	11.5	%	3.3	%	18.7	%	5.3	%	5
	2006		701		20.4	%	4.2	%	38.5	%	3.7	%	7
	2007		875		25.5	%	2.0	%	40.0	%	3.7	%	8
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	2,112	20.2	%	3.0	%	34.1	%	4.1	%	20

U.S. Alt-A First Lien



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	536	24.8	%	8.7	%	7.5	%	17.9	%	20
	2006		324		30.9	%	0.0	%	21.8	%	37.4	%	7
	2007		1,990		38.3	%	1.2	%	17.2	%	28.1	%	12
	2008		1,054		36.5	%	14.2	%	16.7	%	25.9	%	5
		Total	$	3,903	35.4	%	5.6	%	16.1	%	26.9	%	44

Please refer to the Glossary for an explanation of changes in the Company's presentation of net par outstanding and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Direct U.S. RMBS Profile (2 of 2)

As of September 30, 2013

(dollars in millions)

Distribution of Direct U.S. RMBS Insured January 1, 2005 or Later by Exposure Type, Average Pool Factor, Subordination, Cumulative Losses and 60+ Day Delinquencies

U.S. Option ARMs



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	40	15.5	%	11.6	%	10.4	%	16.4	%	2
	2006		80		28.3	%	—	%	19.6	%	32.4	%	5
	2007		794		37.3	%	1.0	%	22.5	%	30.8	%	11
	2008		58		39.0	%	49.6	%	17.3	%	23.7	%	1
		Total	$	973	35.7	%	4.2	%	21.4	%	30.0	%	19

U.S. Subprime First Lien



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	196	33.6	%	17.3	%	9.2	%	27.6	%	4
	2006		2,583		17.9	%	61.8	%	20.1	%	31.7	%	4
	2007		2,194		40.7	%	9.8	%	27.5	%	40.7	%	13
	2008		74		52.5	%	16.1	%	22.7	%	31.1	%	1
		Total	$	5,047	28.9	%	36.8	%	22.9	%	35.4	%	22

Please refer to the Glossary for an explanation of changes in the Company's presentation of net par outstanding and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Direct U.S. Commercial Real Estate Profile

As of September 30, 2013

(dollars in millions)

Distribution of Direct U.S. CMBS Insured January 1, 2005 or Later by Exposure Type, Internal Rating, Average Pool Factor, Subordination, Cumulative Losses and 60+ Day Delinquencies

U.S. CMBS



Rating:			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	AAA		$	3,348	71.6	%	39.9	%	3.2	%	8.4	%	159
	AA		—		—	%	—	%	—	%	—	%	—
	A		33		14.6	%	45.4	%	2.8	%	4.0	%	1
	BBB		—		—	%	—	%	—	%	—	%	—
	BIG		—		—	%	—	%	—	%	—	%	—
		Total exposures	$	3,381	71.0	%	40.0	%	3.2	%	8.3	%	160

CDOs of U.S. Commercial Real Estate⁽¹⁾



		Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement
CDOs of commercial real estate		$	361	100.0	%	52.2	%	56.3	%
	Total exposures	$	361	100.0	%	52.2	%	56.3	%


1)	Represents other U.S. Commercial Real Estate not included in the table above.

Please refer to the Glossary for a description of net par outstanding, performance indicators and sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (1 of 5)

(dollars in millions)

BIG Exposures by Asset Exposure Type



			BIG Net Par Outstanding⁽¹⁾
			September 30, 2013		December 31, 2012
U.S. public finance:
	Infrastructure finance		$	1,711	$	1,695
	General obligation		1,103		1,122
	Municipal utilities		967		596
	Tax backed		267		476
	Transportation		242		245
	Healthcare		51		58
	Housing		17		2
	Higher education		14		18
	Other public finance		256		353
		Total U.S. public finance	4,628		4,565
Non-U.S. public finance:
	Infrastructure finance		1,255		1,923
	Other public finance		371		370
		Total non-U.S. public finance	1,626		2,293
Total public finance			$	6,254	$	6,858

U.S. structured finance:
	RMBS		$	7,938	$	9,839
	Pooled corporate obligations		1,996		2,873
	Insurance securitizations		623		753
	Consumer receivables		394		421
	Commercial receivables		161		182
	Structured credit		63		198
	Other structured finance		132		132
		Total U.S. structured finance	11,307		14,398
Non-U.S. structured finance:
	Pooled corporate obligations		768		805
	RMBS		220		220
	Commercial receivables		8		16
		Total non-U.S. structured finance	996		1,041
Total structured finance			$	12,303	$	15,439
Total BIG net par outstanding			$	18,557	$	22,297


1)	Under the terms of certain credit derivative contracts, the referenced obligations in such contracts have been delivered to the Company and recorded in invested assets in the consolidated balance sheets. Such amounts totaled $218 million and $220 million in gross par outstanding as of September 30, 2013 and December 31, 2012, respectively.

Please refer to the Glossary for an explanation of changes in the Company's presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (2 of 5)

(dollars in millions)

Net Par Outstanding by BIG Category⁽¹⁾



				Financial Guaranty Insurance and Credit Derivatives Surveillance Categories⁽²⁾
				September 30, 2013		December 31, 2012
Category 1
	U.S. public finance			$	3,154	$	3,290
	Non-U.S. public finance			1,001		2,293
	U.S. structured finance			3,884		4,253
	Non-U.S. structured finance			947		984
		Total Category 1		8,986		10,820
Category 2
	U.S. public finance			629		500
	Non-U.S. public finance			625		—
	U.S. structured finance			3,502		4,060
	Non-U.S. structured finance			49		57
		Total Category 2		4,805		4,617
Category 3
	U.S. public finance			845		775
	Non-U.S. public finance			—		—
	U.S. structured finance			3,921		6,085
	Non-U.S. structured finance			—		—
		Total Category 3		4,766		6,860
			BIG Total	$	18,557	$	22,297

Assured Guaranty's surveillance department is responsible for monitoring our portfolio of credits and maintains a list of BIG credits. In third quarter 2013, the Company refined the definitions of its BIG surveillance categories to be consistent with its new approach to assigning internal credit ratings. BIG Category 1: Below-investment-grade transactions showing sufficient deterioration to make future losses possible, but for which none are currently expected. BIG Category 2: Below-investment-grade transactions for which future losses are expected but for which no claims (other than liquidity claims which is a claim that the Company expects to be reimbursed within one year) have yet been paid. BIG Category 3: Below-investment-grade transactions for which future losses are expected and on which claims (other than liquidity claims) have been paid.


2)	Under the terms of certain credit derivative contracts, the referenced obligations in such contracts have been delivered to the Company and recorded in other invested assets in the consolidated balance sheets. Such amounts totaled $218 million and $220 million in gross par outstanding as of September 30, 2013 and December 31, 2012, respectively.

Please refer to the Glossary for an explanation of changes in the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (3 of 5)

As of September 30, 2013

(dollars in millions)

Public Finance BIG Exposures Greater Than $50 Million



			Net Par Outstanding (excluding loss mitigation bonds)		Internal Rating
Name or description
U.S. public finance:
		Skyway Concession Company LLC	$	1,134	BB
		Jefferson County Alabama Sewer	464		D
		Puerto Rico Aqueduct & Sewer Authority	384		BB+
		Louisville Arena Authority Inc.	337		BB
		Detroit (City of) Michigan	321		C+
		San Joaquin Hills California Transportation	242		BB-
		GMAC Military Housing Trust XVIII (Hickam Air Force Base)	215		BB
		Lackawanna County, Pennsylvania	180		BB-
		Woonsocket (City of), Rhode Island	148		BB
		Guaranteed Student Loan Transaction	143		B
		Stockton City, California	119		D
		Orlando Tourist Development Tax - Florida	118		B+
		Harrisburg (City of) Pennsylvania General Obligation	92		B-
		Xenia Rural Water District, Iowa	79		B
		Rockland County New York	73		BB+
		Guaranteed Student Loan Transaction	52		CCC
		Bridgeview Village Illinois General Obligation	50		BB+
	Total		$	4,151

Non-U.S. public finance:
		Reliance Rail Finance Pty. Limited	$	623	BB
		M6 Duna Autopalya Koncesszios Zartkoruen Mukodo Reszvenytarsasag	379		BB
		Valencia Fair	259		BB-
		Autovia de la Mancha, S.A.	146		BB-
		Alte Liebe I Limited (Wind Farm)	80		BB
		Metropolitano de Porto Lease and Sublease of Railroad Equipment	56		B+
	Total		$	1,543
Total			$	5,694

Please refer to the Glossary for an explanation of changes in the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (4 of 5)

As of September 30, 2013

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million



			BIG Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		BIG Net Par Outstanding (excluding loss mitigation bonds)		Internal Rating	Current Credit Enhancement	60+ Day Delinquencies
Name or description
U.S. structured finance:
	U.S. RMBS:
		Deutsche Alt-A Securities Mortgage Loan 2007-2	$	568	$	—	$	568	CCC	0.0%	24.9%
		MABS 2007-NCW	495		53		442		CCC	15.3%	53.2%
		Option One 2007-FXD2	340		—		340		CCC	3.6%	29.2%
		Private Residential Mortgage Transaction	332		—		332		CCC	2.9%	25.7%
		Countrywide HELOC 2006-I	311		—		311		CCC	0.0%	2.8%
		Deutsche Alt-A Securities Mortgage Loan 2007-3	292		—		292		B	0.1%	20.5%
		Private Residential Mortgage Transaction	290		—		290		B	13.7%	24.9%
		MortgageIT Securities Corp. Mortgage Loan 2007-2	278		—		278		B	3.2%	19.1%
		Private Residential Mortgage Transaction	278		—		278		CCC	—	29.2%
		Nomura Asset Accept. Corp. 2007-1	249		1		248		CCC	9.6%	25.6%
		Private Residential Mortgage Transaction	220		—		220		B	0.0%	5.5%
		Countrywide Home Equity Loan Trust 2007-D	193		—		193		CCC	0.0%	5.4%
		Countrywide HELOC 2005-D	185		—		185		CCC	—%	60.3%
		Countrywide Home Equity Loan Trust 2005-J	183		—		183		CCC	0.0%	4.1%
		Soundview 2007-WMC1	177		—		177		CCC	0.0%	3.1%
		Countrywide HELOC 2006-F	241		73		168		CCC	0.0%	3.1%
		Countrywide HELOC 2007-B	150		—		150		CCC	0.0%	0.0%
		Countrywide HELOC 2007-A	164		15		149		CCC	13.2%	27.8%
		New Century 2005-A	147		—		147		CCC	5.4%	34.2%
		GMACM 2004-HE3	146		—		146		CCC	19.3%	29.2%
		AAA Trust 2007-2	264		127		137		CCC	0.0%	39.0%
		Private Residential Mortgage Transaction	136		—		136		BB	0.0%	44.4%
		IndyMac 2007-H1 HELOC	119		—		119		CCC	0.0%	2.4%
		CSAB 2006-3	111		—		111		CCC	0.0%	6.2%
		FHABS 2006-HE2 HELOC	98		—		98		BB	16.1%	31.1%
		Countrywide HELOC 2005-C	87		—		87		CCC	0.0%	34.8%
		Soundview Home Loan Trust 2008-1	75		2		73		CCC	0.0%	39.3%
		American Home Mortgage Assets Trust 2007-4	68		—		68		CCC	—%	27.0%
		CSAB 2006-2	70		10		60		CCC	0.0%	21.7%
		MASTR Asset-Backed Securities Trust 2005-NC2	64		—		64		CCC	0.0%	33.9%
		Taylor Bean & Whitaker 2007-2	79		22		57		CCC	—%	25.5%
		Terwin Mortgage Trust 2005-16HE	57		—		57		CCC	0.3%	30.2%
		CSMC 2007-3	59		8		51		CCC	—	5.0%
		Terwin Mortgage Trust 2006-10SL	182		138		44		CCC	0.0%	6.2%
		Renaissance (DELTA) 2007-3	144		131		13		CCC	0.0%	4.7%
		Terwin Mortgage Trust 2007-6ALT	51		50		1		CCC	0.0%	34.6%
		Total U.S. RMBS	$	6,903	$	630	$	6,273

Please refer to the Glossary for an explanation of changes in the Company's internal rating approach, presentation of net par outstanding and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (5 of 5)

As of September 30, 2013

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million (continued)



			BIG Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		BIG Net Par Outstanding (excluding loss mitigation bonds)		Internal Rating	Current Credit Enhancement
Name or description
U.S. structured finance:
	Other:
		Orkney Re II, Plc	$	423	$	—	$	423	CCC	N/A
		Taberna Preferred Funding IV, LTD	292		—		292		B-	22.1%
		Taberna Preferred Funding III, LTD	268		—		268		CCC	16.8%
		Alesco Preferred Funding XVI, LTD.	227		—		227		B+	15.5%
		Taberna Preferred Funding II, LTD.	209		—		209		CCC	20.7%
		Ballantyne Re Plc	500		300		200		CC	N/A
		Alesco Preferred Funding XVII, LTD.	173		—		173		BB	25.8%
		Trapeza CDO XI	153		—		153		BB-	39.8%
		Taberna Preferred Funding VI, LTD	150		—		150		B-	15.4%
		Attentus CDO I Limited	144		—		144		BB	40.3%
		US Capital Funding IV, LTD	136		—		136		CCC	5.0%
		Alesco Preferred Funding VII	125		—		125		BB+	39.4%
		Alesco Preferred Funding VI	119		—		119		BB+	45.4%
		NRG Peaker¹	116		—		116		B	N/A
		National Collegiate Trust Series 2007-4	73		—		73		CCC	N/A
		National Collegiate Trust Series 2006-2	68		—		68		B	N/A
		Conseco Finance Manufactured Housing Series 2001-2	67		—		67		CCC	15.3%
		CAPCO - Excess SIPC Excess of Loss Reinsurance	63		—		63		BB	N/A
		GreenPoint 2000-4	52		—		52		CCC	4.1%
		National Collegiate Trust Series 2007-3	50		—		50		CCC	0.0%
		Private Whole Business Securitization	121		121		0		B	N/A
		Subtotal other	$	3,529	$	421	$	3,108
		Subtotal U.S. structured finance	$	10,432	$	1,051	$	9,381

Non-U.S. structured finance:

		Gleneagles Funding LTD (1st Issue)	$	229	$	—	$	229	BB	N/A
		FHB 8.95% 2016	126		—		126		BB	N/A
		OTP 10% 2012	88		—		88		BB+	N/A
		Augusta Funding Limited 07 Perpetual Note Issue	80		—		80		BB	N/A
		Private Pooled Corporate Transaction	81		—		81		BB	N/A
		Augusta Funding Limited 05 Perpetual Note Issue	79		—		79		BB	N/A
		Private Pooled Corporate Transaction	64		—		64		BB	N/A
		Private Pooled Corporate Transaction	56		—		56		BB	N/A
		Subtotal Non-U.S. structured finance	$	803	$	—	$	803
	Total		$	11,235	$	1,051	$	10,184


1)	Under the terms of this credit derivative contract, the referenced obligation was delivered to the Company and recorded in invested assets in the consolidated balance sheets. Net par shown is net of $72 million of ceded par. The Company holds 100% of the bonds referenced in this transaction and reports them in the investment portfolio.

Please refer to the Glossary for an explanation of changes in the Company's internal rating approach, presentation of net par outstanding and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (1 of 4)

As of September 30, 2013

(dollars in millions)

50 Largest U.S. Public Finance Exposures



Credit names:	Net Par Outstanding		Internal Rating
Credit names:	Net Par Outstanding		Internal Rating
New Jersey (State of)	$	4,139	A+
California (State of)	3,357		A-
New York (City of) New York	3,112		AA-
Chicago (City of) Illinois	2,648		A-
Massachusetts (Commonwealth of)	2,552		AA
New York (State of)	2,408		A+
Miami-Dade County Florida Aviation Authority - Miami International Airport	2,159		A
Puerto Rico (Commonwealth of)	2,120		BBB-
Illinois (State of)	2,006		A-
Houston Texas Water and Sewer Authority	1,983		AA-
Los Angeles California Unified School District	1,947		AA-
Port Authority of New York and New Jersey	1,946		AA-
Wisconsin (State of)	1,838		A+
Philadelphia (City of) Pennsylvania	1,830		BBB
Pennsylvania (Commonwealth of)	1,745		AA-
Washington (State of)	1,716		AA
Chicago-O'Hare International Airport	1,661		A
New York MTA Transportation Authority	1,634		A
Chicago Illinois Public Schools	1,628		A-
Michigan (State of)	1,621		A+
New York City Municipal Water Finance Authority	1,569		AA
Illinois Toll Highway Authority	1,499		AA
Long Island Power Authority	1,481		A-
Miami-Dade County Florida School Board	1,461		A-
Arizona (State of)	1,436		A+
Atlanta Georgia Water & Sewer System	1,415		A-
Los Angeles California Department of Water & Power - Electric Revenue Bonds	1,319		AA-
Georgia Board of Regents	1,308		A
Massachusetts (Commonwealth of) Water Resources	1,304		AA
Metro Washington Airport Authority	1,271		A+
Philadelphia School District, Pennsylvania	1,248		A
Puerto Rico Highway and Transportation Authority	1,231		BBB
Pennsylvania Turnpike Commission	1,173		A-
Skyway Concession Company LLC	1,134		BB
California State University System Trustee	1,123		A+
North Texas Tollway Authority	1,095		A
District of Columbia	1,083		A+
Kentucky (Commonwealth of)	1,066		A+
Detroit Michigan Sewer	1,020		BBB
New York State Thruway Authority	1,015		A
New York State Thruway - Highway Trust Fund	1,000		AA-
San Diego County, California Water	974		AA
Louisiana (State of) Gas and Fuel Tax	971		AA
Garden State Preservation Trust, New Jersey Open Space & Farmland	965		AA
San Diego Unified School District, California	927		AA
Broward County Florida School Board	910		A+
Hartfield Atlanta International Airport	897		A
University of California Board of Regents	893		AA
Orlando-Orange County Expressway Authority, Florida	891		A+
Connecticut (State of)	876		A+
Total top 50 U.S. public finance exposures	$	78,605

Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (2 of 4)

As of September 30, 2013

(dollars in millions)

50 Largest U.S. Structured Finance Exposures



Credit Name		Net Par Outstanding (excluding loss mitigation bonds)		Internal Rating	Credit Enhancement
	Fortress Credit Opportunities I, LP.	$	1,328	AA	30.1%
	Synthetic Investment Grade Pooled Corporate CDO	1,188		AAA	13.4%
	Stone Tower Credit Funding	994		AAA	29.5%
	Synthetic High Yield Pooled Corporate CDO	978		AAA	40.6%
	Synthetic Investment Grade Pooled Corporate CDO	767		AAA	14.8%
	Synthetic Investment Grade Pooled Corporate CDO	763		AAA	29.0%
	Synthetic Investment Grade Pooled Corporate CDO	745		AAA	28.0%
	Synthetic Investment Grade Pooled Corporate CDO	744		AAA	22.5%
	Synthetic High Yield Pooled Corporate CDO	734		AAA	37.4%
	Synthetic Investment Grade Pooled Corporate CDO	655		AAA	15.8%
	Ares Enhanced Credit Opportunities Fund	594		AAA	34.4%
	Deutsche Alt-A Securities Mortgage Loan 2007-2	568		CCC	0.0%
	Eastland CLO, LTD	532		AAA	39.3%
	Synthetic Investment Grade Pooled Corporate CDO	516		AAA	14.3%
	Denali CLO VII, LTD.	503		AAA	19.5%
	Private US Insurance Securitization	500		AA	N/A
	Synthetic High Yield Pooled Corporate CDO	496		AAA	46.7%
	Shenandoah Trust Capital I Term Securities	484		A+	15.3%
	Churchill Financial Cayman	467		AAA	N/A
	SLM Private Credit Student Trust 2007-A	450		BBB-	36.2%
	MABS 2007-NCW	442		CCC	16.6%
	LIICA Holdings, LLC	428		AA	N/A
	Orkney Re II, Plc	423		CCC	N/A
	Private Other Structured Finance Transaction	400		AA	N/A
	Phoenix CLO II	400		AAA	21.5%
	Grayson CLO	399		AAA	29.6%
	SLM Private Credit Student Loan Trust 2007-6	392		AAA	4.1%
	Synthetic Investment Grade Pooled Corporate CDO	380		AAA	29.2%
	Synthetic Investment Grade Pooled Corporate CDO	379		AAA	14.2%
	KKR Financial CLO 2007-1	379		AAA	51.7%
	Fortress Credit Funding III	374		AAA	55.7%
	Ares Enhanced Credit Opportunities Fund	369		AAA	34.4%
	Symphony Credit Opportunities Fund	364		AAA	24.5%
	Stone Tower CLO V	362		AAA	28.7%
	SLM Private Credit Student Loan Trust 2006-C	356		BBB-	15.9%
	Muir Grove CLO	345		AAA	21.6%
	Synthetic Investment Grade Pooled Corporate CDO	343		AAA	16.3%
	Option One 2007-FXD2	340		CCC	3.6%
	Private Residential Mortgage Transaction	332		CCC	2.9%
	Countrywide HELOC 2006-I	311		CCC	0.0%
	Cent CDO 15 Limited	307		AAA	18.1%
	Centurion CDO 9	302		AAA	24.2%
	Private Other Structured Finance Transaction	300		A+	N/A
	Private Residential Mortgage Transaction	294		BBB	4.3%
	Cent CDO 12 Limited	293		AAA	23.7%
	Taberna Preferred Funding IV, LTD	292		B-	22.1%
	Deutsche Alt-A Securities Mortgage Loan 2007-3	292		B	0.1%
	Private Residential Mortgage Transaction	290		B	13.7%
	Synthetic Investment Grade Pooled Corporate CDO	283		AAA	30.3%
	MortgageIT Securities Corp. Mortgage Loan 2007-2	278		B	3.2%
	Private Residential Mortgage Transaction	278		CCC	—
	Total top 50 U.S. structured finance exposures	$	24,733

Please refer to the Glossary for an explanation of changes in the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (3 of 4)

As of September 30, 2013

(dollars in millions)

25 Largest Non-U.S. Exposures



Credit Name		Net Par Outstanding		Internal Rating
	Quebec Province	$	2,385	A+
	Thames Water Utility Finance PLC	1,452		A-
	Sydney Airport Finance Company	1,403		BBB
	Channel Link Enterprises Finance PLC	956		BBB
	Southern Gas Networks PLC	871		BBB
	Societe des Autoroutes du Nord et de l'Est de France S.A.	798		BBB+
	Capital Hospitals (Issuer) PLC	784		BBB-
	Campania Region - Healthcare receivable	748		BBB-
	Southern Water Services Limited	707		A-
	Essential Public Infrastructure Capital II	705		AAA
	International Infrastructure Pool	685		A-
	International Infrastructure Pool	685		A-
	International Infrastructure Pool	685		A-
	Reliance Rail Finance Pty. Limited	623		BB
	Central Nottinghamshire Hospitals PLC	557		BBB
	Synthetic Investment Grade Pooled Corporate CDO	555		AAA
	Verbund - Lease and Sublease of Hydro-Electric equipment	512		AAA
	Scotland Gas Networks Plc (A2)	510		BBB
	NewHospitals (St Helens & Knowsley) Finance PLC	509		BBB
	Envestra Limited	502		BBB
	A28 Motorway	497		BBB
	The Hospital Company (QAH Portsmouth) Limited	489		BBB
	Integrated Accomodation Services PLC	480		BBB+
	Octagon Healthcare Funding PLC	433		BBB
	Taberna Europe CDO II PLC	427		BBB-
	Total top 25 non-U.S. exposures	$	18,958

Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (4 of 4)

As of September 30, 2013

(dollars in millions)

10 Largest U.S. Residential Mortgage Servicer Exposures



Servicer:		Net Par Outstanding (excluding loss mitigation bonds)
	Ocwen Loan Servicing, LLC ¹	$	4,063
	Bank of America, N.A. ²	3,124
	Wells Fargo Bank NA	2,401
	Specialized Loan Servicing, LLC	2,205
	Select Portfolio Servicing, Inc.	668
	JPMorgan Chase Bank	657
	OneWest Bank Group LLC	338
	Carrington Mortgage Services, LLC	327
	First Horizon National Corporation	219
	Doral Bank	95
	Total top 10 U.S. residential mortgage servicer exposures	$	14,097

10 Largest U.S. Healthcare Exposures



Credit Name:		Net Par Outstanding		Internal Rating	State
	MultiCare Health System	$	464	AA-	WA
	CHRISTUS Health	421		A+	TX
	Methodist Healthcare, TN	420		A	TN
	Catholic Health Initiatives	347		AA-	CO
	Children's National Medical Center (DC)	342		A-	DC
	Bon Secours Health System Obligated Group	323		A-	MD
	Carolina HealthCare System	319		AA-	NC
	Virtua Health - New Jersey	315		A+	NJ
	Iowa Health System	313		A+	IA
	Catholic Health Partners	313		A+	OH
	Total top 10 U.S. healthcare exposures	$	3,577


1)	Includes Homeward Residential Inc.


2)	Includes Countrywide Home Loans Servicing LP.

Please refer to the Glossary for an explanation of changes in the Company's internal rating approach and presentation of net par outstanding.

Assured Guaranty Ltd.

Rollforward of Net Expected Loss and LAE to be Paid

(dollars in millions)

Rollforward of Net Expected Loss and LAE to be Paid for the Three Months Ended September 30, 2013



Financial Guaranty Insurance Contracts and Credit Derivatives				Net Expected Loss to be Paid as of June 30, 2013			Economic Loss Development During 3Q-13⁽¹⁾			(Paid) Recovered Losses During 3Q-13			Net Expected Loss to be Paid as of September 30, 2013
U.S. RMBS
	First lien:
		Prime first lien		$	18		$	3		$	—		$	21
		Alt-A first lien		288			(85		)	3			206
		Option ARMs		(20		)	25			2			7
		Subprime first lien		274			38			(9		)	303
			Total first lien	560			(19		)	(4		)	537
	Second lien:
		Closed end seconds		(14		)	—			1			(13		)
		HELOC		(97		)	(42		)	10			(129		)
			Total second lien	(111		)	(42		)	11			(142		)
Total U.S. RMBS				449			(61		)	7			395
TruPS				33			9			8			50
Other structured finance				158			(13		)	(17		)	128
U.S. public finance				71			44			68			183
Non-U.S. public finance				66			(1		)	(12		)	53
			Subtotal	777			(22		)	54			809
Other				(3		)	—			—			(3		)
Total				$	774		$	(22	)	$	54		$	806

Rollforward of Net Expected Loss and LAE to be Paid for the Nine Months Ended September 30, 2013



Financial Guaranty Insurance Contracts and Credit Derivatives				Net Expected Loss to be Paid as of December 31, 2012			Economic Loss Development During 2013⁽¹⁾			(Paid) Recovered Losses During 2013			Net Expected Loss to be Paid as of September 30, 2013
U.S. RMBS
	First lien:
		Prime first lien		$	6		$	16		$	(1	)	$	21
		Alt-A first lien		315			(83		)	(26		)	206
		Option ARMs		(131		)	(92		)	230			7
		Subprime first lien		242			86			(25		)	303
			Total first lien	432			(73		)	178			537
	Second lien:
		Closed end seconds		(39		)	7			19			(13		)
		HELOC		(111		)	(76		)	58			(129		)
			Total second lien	(150		)	(69		)	77			(142		)
Total U.S. RMBS				282			(142		)	255			395
TruPS				27			7			16			50
Other structured finance				312			(39		)	(145		)	128
U.S. public finance				7			138			38			183
Non-U.S. public finance				52			13			(12		)	53
			Subtotal	680			(23		)	152			809
Other				(3		)	(10		)	10			(3		)
Total				$	677		$	(33	)	$	162		$	806


1)	Includes the effect of changes in the Company's estimate of future recovery on representations and warranties ("R&W").

Assured Guaranty Ltd.

Financial Guaranty Insurance and Credit Derivative U.S. RMBS R&W Benefit Development

(dollars in millions)

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Benefit Development for the Three Months Ended September 30, 2013



			Future Net R&W Benefit at June 30, 2013		R&W Economic Loss Development During 3Q-13			R&W Recovered During 3Q-13			Future Net R&W Benefit at September 30, 2013
Financial guaranty insurance:
	Prime first lien		$	4	$	(1	)	$	—		$	3
	Alt-A first lien		160		20			32			212
	Option ARMs		277		39			(80		)	236
	Subprime first lien		108		7			—			115
	Closed end seconds		102		1			(3		)	100
	HELOC		109		2			(56		)	55
		Subtotal	760		68			(107		)	721

Credit derivatives:
	Alt-A first lien		188		17			(48		)	157
	Option ARMs		16		1			—			17
		Subtotal	204		18			(48		)	174

Total			$	964	$	86		$	(155	)	$	895

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Benefit Development for the Nine Months Ended September 30, 2013



			Future Net R&W Benefit at December 31, 2012		R&W Economic Loss Development During 2013			R&W Recovered During 2013			Future Net R&W Benefit at September 30, 2013
Financial guaranty insurance:
	Prime first lien		$	4	$	(1	)	$	—		$	3
	Alt-A first lien		158		30			24			212
	Option ARMs		574		206			(544		)	236
	Subprime first lien		109		6			—			115
	Closed end seconds		138		(11		)	(27		)	100
	HELOC		150		70			(165		)	55
		Subtotal	1,133		300			(712		)	721

Credit derivatives:
	Alt-A first lien		220		(6		)	(57		)	157
	Option ARMs		17		—			—			17
		Subtotal	237		(6		)	(57		)	174

Total			$	1,370	$	294		$	(769	)	$	895

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Policies with R&W Benefit



			Number of Risks as of		Debt Service as of
			September 30, 2013	December 31, 2012	September 30, 2013		December 31, 2012
Financial guaranty insurance:
	Prime first lien		1	1	$	38	$	44
	Alt-A first lien		18	19	1,220		1,467
	Option ARMs		8	9	391		846
	Subprime first lien		5	5	991		989
	Closed end seconds		4	4	164		260
	HELOC		6	7	436		549
		Subtotal	42	45	3,240		4,155

Credit derivatives:
	Alt-A first lien		7	7	2,387		2,706
	Option ARMs		1	1	304		337
		Subtotal	8	8	2,691		3,043

Total			50	53	$	5,931	$	7,198

Please refer to the Glossary for an explanation of changes in the presentation of net debt service outstanding and of the various sectors.

Assured Guaranty Ltd.

Losses Incurred

As of September 30, 2013

(dollars in millions)



Financial Guaranty Insurance Contracts and Credit Derivatives				Total Net Par Outstanding for BIG Transactions (1)		3Q-13 Losses Incurred			2013 Losses Incurred			Net Reserve and Credit Impairment			Net Salvage and Subrogation Assets			Net Expected Loss to be Expensed
U.S. RMBS
	First lien:
		Prime first lien		$	417	$	3		$	16		$	19		$	—		$	—
		Alt-A first lien		2,801		(39		)	(18		)	175			52			70
		Option ARMs		632		26			(40		)	42			38			40
		Subprime first lien		1,983		38			87			213			1			94
			Total first lien	5,833		28			45			449			91			204
	Second lien:
		Closed end seconds		150		2			21			3			47			34
		HELOC		1,955		(28		)	(43		)	6			141			129
			Total second lien	2,105		(26		)	(22		)	9			188			163
Total U.S. RMBS				7,938		2			23			458			279			367
TruPS				1,996		7			3			35			—			2
Other structured finance				2,369		(9		)	(41		)	98			5			36
U.S. public finance				4,628		44			119			178			48			57
Non-U.S. public finance				1,626		12			13			31			—			20
			Subtotal	18,557		56			117			800			332			482
Other				—		—			(10		)	2			5			—
			Subtotal	18,557		56			107			802			337			482
Effect of consolidating FG VIEs				—		(10		)	(25		)	(96		)	(88		)	(109		)
Total				$	18,557	$	46		$	82		$	706		$	249		$	373



		Insurance Reserves		Credit Impairment on Credit Derivative Contracts ⁽²⁾		Reserve and Credit Impairment		Salvage and Subrogation Recoverable			Net
Gross		$	601	$	167	$	768	$	275		$	493
Ceded		59		3		62		26		(3)	36
	Net	$	542	$	164	$	706	$	249		$	457


1)	Under the terms of certain credit derivative contracts, the referenced obligations in such contracts have been delivered to the Company and recorded in other invested assets in the consolidated balance sheets. Such amounts totaled $218 million and $220 million in gross par outstanding as of September 30, 2013 and December 31, 2012, respectively.


2)	Credit derivative assets and liabilities recorded on the balance sheet considers estimates of expected losses.


3)	Recorded in "reinsurance balances payable, net" on the consolidated balance sheets.

Please refer to the Glossary for an explanation of changes in the presentation of net par outstanding and of the various sectors.

Assured Guaranty Ltd.

Summary Financial and Statistical Data

(dollars in millions, except per share amounts)



						Year Ended December 31,
			As of and for Nine Months Ended September 30, 2013			2012			2011		2010		2009
GAAP Summary Income Statement Data
	Net earned premiums		$	570		$	853		$	920	$	1,187	$	930
	Net investment income		286			404			396		361		262
	Realized gains and other settlements on credit derivatives		(44		)	(108		)	6		153		164
	Total expenses		306			822			776		776		808
	Income (loss) before income taxes		653			132			1,029		534		109
	Net income (loss) attributable to Assured Guaranty Ltd.		459			110			773		484		82
	Net income (loss) attributable to Assured Guaranty Ltd. per diluted share		2.43			0.57			4.16		2.56		0.63

GAAP Summary Balance Sheet Data
	Total investments and cash		$	10,866		$	11,223		$	11,314	$	10,849	$	11,013
	Total assets		16,354			17,242			17,709		19,370		16,449
	Unearned premium reserve		4,676			5,207			5,963		6,973		8,381
	Loss and LAE reserve		601			601			679		574		300
	Long-term debt		819			836			1,038		1,053		1,066
	Shareholders’ equity attributable to Assured Guaranty Ltd.		4,834			4,994			4,652		3,670		3,455
	Book value attributable to Assured Guaranty Ltd. per share		26.53			25.74			25.52		19.97		18.76

Non-GAAP Financial Measures
	Operating income		$	475		$	535		$	601	$	655	$	278
	Operating income per diluted share		2.51			2.81			3.24		3.46		2.15
	Adjusted book value		9,029			9,151			8,987		8,989		8,887
	PVP		74			210			243		363		640

Other Financial Information (GAAP Basis)
	Net debt service outstanding (end of period)		$	709,643		$	780,356		$	844,447	$	926,698	$	958,037
	Gross debt service outstanding (end of period)		757,578			833,098			939,914		1,029,540		1,094,809
	Net par outstanding (end of period)		473,370			518,772			556,830		616,686		640,194
	Gross par outstanding (end of period)		502,848			550,908			613,124		680,803		726,701

Other Financial Information (Statutory Basis)⁽¹⁾
	Net debt service outstanding (end of period)		$	684,240		$	756,044		$	828,327	$	904,686	$	941,965
	Gross debt service outstanding (end of period)		730,497			807,420			916,501		1,003,651		1,072,811
	Net par outstanding (end of period)		449,795			496,237			541,882		598,398		626,046
	Gross par outstanding (end of period)		477,728			527,126			593,072		659,320		709,558

	Consolidated qualified statutory capital		6,015			5,943			5,688		4,915		4,841
	Consolidated policyholders' surplus and reserves		10,288			10,288			10,626		10,247		10,409

	Ratios:
		Net par outstanding to qualified statutory capital	75		:1	83:1			95:1		122:1		129:1
		Capital ratio⁽²⁾	114		:1	127:1			145:1		184:1		195:1
		Financial resources ratio⁽²⁾	57		:1	61:1			65:1		72:1		72:1

	Gross debt service written:
		Public finance - U.S.	$	9,731		$	25,252		$	26,630	$	48,990	$	87,940
		Public finance - non-U.S.	477			40			208		51		894
		Structured finance - U.S.	297			623			1,731		2,962		2,501
		Structured finance - non-U.S.	—			—			—		—		—
	Total gross debt service written		$	10,505		$	25,915		$	28,569	$	52,003	$	91,335

	Net debt service written		$	10,342		$	25,915		$	28,569	$	52,003	$	91,335
	Net par written		6,485			16,816			16,892		30,759		49,759
	Gross par written		6,485			16,816			16,892		30,759		49,921


1)	Statutory amounts prepared on a consolidated basis. The NAIC Annual Statements for U.S. Domiciled Insurance Subsidiaries are prepared on a stand-alone basis.


2)	See page 7 for additional detail on claims paying resources.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Please refer to the Glossary for an explanation of changes in the presentation of net debt service and net par outstanding and of the various sectors.

Glossary

Net Par Outstanding and Internal Ratings

Net par outstanding is insured par exposure net of reinsurance cessions. Unless otherwise indicated, net par outstanding amount excludes loss mitigation bonds. See below for additional information.

Internal Rating for the Company’s ratings scale is similar to that used by the nationally recognized statistical rating organizations; however, the ratings in the tables may not be the same as ratings assigned by any such rating agency.

In third quarter 2013, the Company changed the manner in which it presents par outstanding and debt service in two ways. First, the Company had included securities purchased for loss mitigation purposes both in its invested assets portfolio and its financial guaranty insured portfolio. Beginning with third quarter 2013, the Company will be excluding such loss mitigation securities from its disclosure about its financial guaranty insured portfolio (unless otherwise indicated) because it manages such securities as investments and not insurance exposure. It has taken this approach as of both September 30, 2013 and December 31, 2012. This reduces its BIG net par as of September 30, 2013 by $264 million from what it would have been without the change. Second, the Company refined its approach to its internal credit ratings and surveillance categories, which resulted in the upgrade of $25 million from BIG to investment grade. Please refer to "Refinement of Approach to Internal Credit Ratings and Surveillance Categories" in note 3, Outstanding Exposure, of the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 for additional information.

Performance Indicators

The performance information described below is obtained from third parties and/or provided by the trustee and may be subject to restatement or correction:

60+ Day Delinquencies are defined as loans that are greater than 60 days delinquent and all loans that are in foreclosure, bankruptcy or real estate owned divided by current collateral balance.

Average Credit Enhancement is intended to provide a measure of the amount of equity and/or subordinated tranches that are junior in the capital structure to Assured Guaranty’s exposure, expressed as a percentage of the total transaction size, and reflects any reduction of that credit support resulting from defaults or other factors. For transactions where excess spread may be available to absorb certain losses, the amounts shown do not include any benefit from excess spread. The calculation methodologies differ for the various asset classes to reflect differences in transaction structures in order to provide a measure that management believes is comparable across asset classes.

Cumulative Losses are defined as net charge-offs on the underlying loan collateral divided by the original collateral balance.

Pool Factor is the percentage of the current collateral balance divided by the original collateral balance of the transactions at inception.

Subordination represents the sum of subordinate tranches and overcollateralization, expressed as a percentage of total transaction size, and does not include any benefit from excess spread collections that may be used to absorb losses. Many of the closed-end second lien RMBS transactions insured by the Company have unique structures whereby the collateral may be written down for losses without a corresponding write-down of the obligations insured by the Company. Many of these transactions are currently undercollateralized, with the principal amount of collateral being less than the principal amount of the obligation insured by the Company. The Company is not required to pay principal shortfalls until legal maturity (rather than making timely principal payments), and takes the undercollateralization into account when estimating expected losses for these transactions.

Sectors

Below are brief descriptions of selected types of public and structured finance obligations that the Company insures and reinsures. For a more complete description, please refer to Assured Guaranty Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2012.

Public Finance:

General Obligation Bonds are full faith and credit bonds that are issued by states, their political subdivisions and other municipal issuers, and are supported by the general obligation of the issuer to pay from available funds and by a pledge of the issuer to levy ad valorem taxes in an amount sufficient to provide for the full payment of the bonds.

Tax-Backed Bonds are obligations that are supported by the issuer from specific and discrete sources of taxation. They include tax-backed revenue bonds, general fund obligations and lease revenue bonds. Tax-backed obligations may be secured by a lien on specific pledged tax revenues, such as a gasoline or excise tax, or incrementally from growth in property tax revenue associated with growth in property values. These obligations also include obligations secured by special assessments levied against property owners and often benefit from issuer covenants to enforce collections of such assessments and to foreclose on delinquent properties. Lease revenue bonds typically are general fund obligations of a municipality or other governmental authority that are subject to annual appropriation or abatement; projects financed and subject to such lease payments ordinarily include real estate or equipment serving an essential public purpose. Bonds in this category also include moral obligations of municipalities or governmental authorities.

Municipal Utility Bonds are obligations of all forms of municipal utilities, including electric, water and sewer utilities and resource recovery revenue bonds. These utilities may be organized in various forms, including municipal enterprise systems, authorities or joint action agencies.

Glossary (continued)

Sectors (continued)

Transportation Bonds include a wide variety of revenue-supported bonds, such as bonds for airports, ports, tunnels, municipal parking facilities, toll roads and toll bridges.

Healthcare Bonds are obligations of healthcare facilities, including community-based hospitals and systems, as well as of health maintenance organizations and long-term care facilities.

Higher Education Bonds are obligations secured by revenue collected by either public or private secondary schools, colleges and universities. Such revenue can encompass all of an institution’s revenue, including tuition and fees, or in other cases, can be specifically restricted to certain auxiliary sources of revenue.

Infrastructure Bonds include obligations issued by a variety of entities engaged in the financing of infrastructure projects, such as roads, airports, ports, social infrastructure and other physical assets delivering essential services supported by long-term concession arrangements with a public sector entity.

Investor-Owned Utility Bonds are obligations primarily backed by investor-owned utilities, first mortgage bond obligations of for-profit electric or water utilities providing retail, industrial and commercial service, and also include sale-leaseback obligation bonds supported by such entities.

Housing Revenue Bonds are obligations relating to both single and multi-family housing, issued by states and localities, supported by cash flow and, in some cases, insurance from entities such as the Federal Housing Administration.

Regulated Utilities Obligations are issued by government-regulated providers of essential services and commodities, including electric, water and gas utilities. The majority of the Company's international regulated utility business is conducted in the United Kingdom.

Pooled Infrastructure Obligations are synthetic asset-backed obligations that take the form of CDS obligations or credit‑-linked notes that reference either infrastructure finance obligations or a pool of such obligations, with a defined deductible to cover credit risks associated with the referenced obligations.

Other Public Finance primarily includes government insured student loans, government-sponsored project finance and structured municipal transactions, which includes excess of loss reinsurance on portfolios of municipal credits.

Structured Finance:

Pooled Corporate Obligations are securities primarily backed by various types of corporate debt obligations, such as secured or unsecured bonds, bank loans or loan participations and trust preferred securities. These securities are often issued in ‘‘tranches,’’ with subordinated tranches providing credit support to the more senior tranches. The Company’s financial guaranty exposures generally are to the more senior tranches of these issues.

Residential Mortgage-Backed Securities (‘‘RMBS’’) and Home Equity Securities are obligations backed by closed-end first mortgage loans and closed- and open-end second mortgage loans or home equity loans on one-to-four family residential properties, including condominiums and cooperative apartments. First mortgage loan products in these transactions include fixed rate, adjustable rate (‘‘ARM’’) and option adjustable-rate (‘‘Option ARM’’) mortgages. The credit quality of borrowers covers a broad range, including ‘‘prime’’, ‘‘subprime’’ and ‘‘Alt-A’’. A prime borrower is generally defined as one with strong risk characteristics as measured by factors such as payment history, credit score, and debt-to-income ratio. A subprime borrower is a borrower with higher risk characteristics, usually as determined by credit score and/or credit history. An Alt-A borrower is generally defined as a prime quality borrower that lacks certain ancillary characteristics, such as fully documented income.

Additional insured obligations within RMBS include Home Equity Lines of Credit (“HELOCs”), which refers to a type of residential mortgage-backed transaction backed by second-lien loan collateral consisting of home equity lines of credit. U.S. Prime First Lien is a type of residential mortgage-backed securities transaction backed primarily by prime first-lien loan collateral plus an insignificant amount of other miscellaneous RMBS transactions.

CBOs/CLOs (collateralized bond obligations and collateralized loan obligations) are asset-backed securities largely backed by non-investment grade/high yield collateral.

Commercial Mortgage-Backed Securities (‘‘CMBS’’) are obligations backed by pools of commercial mortgages. The collateral supporting CMBS include office, multifamily, retail, hotel, industrial and other specialized or mixed-use properties.

Financial Products is the guaranteed investment contracts ("GICs") portion of the former Financial Products Business of AGMH. AGM has issued financial guaranty insurance policies on the GICs and in respect of the GICs business that cannot be revoked or cancelled. Assured Guaranty is indemnified against exposure to the former financial products business by Dexia SA and certain of its affiliates. In addition, the French and Belgian governments have issued guaranties in respect of the GICs portion of the financial products business. The financial products business is currently being run off.

Glossary (continued)

Sectors (continued)

Consumer Receivables Securities are obligations backed by non-mortgage consumer receivables, such as automobile loans and leases, credit card receivables and other consumer receivables.

Commercial Receivables Securities are obligations backed by equipment loans or leases, fleet auto financings, business loans and trade receivables. Credit support is derived from the cash flows generated by the underlying obligations, as well as property or equipment values as applicable.

Insurance Securitization Securities are obligations secured by the future earnings from pools of various types of insurance/reinsurance policies and income produced by invested assets.

Structured Credit Securities include program-wide credit enhancement for commercial paper conduits in the U.S., and securities issued in whole business securitizations and intellectual property securitizations. Program-wide credit enhancement generally involves insuring against the default of ABS in a bank-sponsored commercial paper conduit. Securities issued in whole business and intellectual property securitizations are backed by revenue-producing assets sold to a limited-purpose company by an operating company, including franchise agreements, lease agreements, intellectual property and real property.

Other Structured Finance Securities are obligations backed by assets not generally described in any of the other described categories. One such type of asset is a tax benefit to be realized by an investor in one of the Federal or state programs that permit such investor to receive a credit against taxes (such as Federal corporate income tax or state insurance premium tax) for making qualified investments in specified enterprises, typically located in designated low-income areas.

Non-GAAP Financial Measures

The Company references financial measures that are not in accordance with accounting principles generally accepted in the United States of America (“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 within this financial supplement. 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 Assured Guaranty Ltd., 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 committed capital securities. 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 Assured Guaranty Ltd. , 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.

Non-GAAP Financial Measures (continued)

Operating Shareholders’ Equity (continued):

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.

Operating return on equity (‘‘Operating ROE’’): Operating ROE represents operating income for a specified period divided by the average of operating shareholders’ equity at the beginning and the end of that period. Management believes that operating ROE is a useful measure to evaluate the Company’s return on invested capital. Many investors, analysts and members of the financial news media use operating ROE to evaluate Assured Guaranty Ltd.’s share price and as the basis of their decision to recommend, buy or sell the Assured Guaranty Ltd. common shares. Quarterly and year-to-date operating ROE are calculated on an annualized basis.

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 the 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 Assured Guaranty 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 premium on existing contracts as 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.

Assured Guaranty Ltd.

30 Woodbourne Avenue

Hamilton HM 08

Bermuda

(441) 279-5705

www.assuredguaranty.com

Contacts:

Equity and Fixed Income Investors:

Robert Tucker

Managing Director, Investor Relations and Corporate Communications

(212) 339-0861

rtucker@assuredguaranty.com

Michael Walker

Managing Director, Fixed Income Investor Relations

(212) 261-5575

mwalker@assuredguaranty.com

Ross Aron

Vice President, Equity Investor Relations

(212) 261-5509

raron@assuredguaranty.com

Glenn Alterman

Associate, Investor Relations

(212) 339-0854

galterman@assuredguaranty.com

Media:

Ashweeta Durani

Vice President, Corporate Communications

(212) 408-6042

adurani@assuredguaranty.com

ASSURED GUARANTY LTD - FORM 8-K - EX-99.2 - FINANCIAL SUPPLEMENT - November 12, 2013

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