Moody’s Upgrades Assured Guaranty Corp.’s Rating and Affirms Assured Guaranty Municipal’s Rating

Assured Guaranty Ltd. (NYSE:AGO) (together with its subsidiaries, Assured Guaranty) announced that Moody’s Investors Service (Moody’s) upgraded to A1 from A2 the insurance financial strength (IFS) rating of Assured Guaranty Corp. (AGC). Moody’s affirmed the A1 ratings of Assured Guaranty Municipal Corp. (AGM) and its subsidiary Assured Guaranty UK Limited (AGUK). The outlooks are stable.

In its rating action, Moody’s cited as part of its ratings upgrade rationale for AGC the following:

• “The upgrade of AGC’s IFS rating to A1 reflects the company’s strong risk-adjusted capital adequacy, the significant improvement in the credit quality of its insured portfolio over the past several years and an increased strategic role within the Assured Guaranty group of companies as evidenced by higher new business production.”
• “During 2023, AGC wrote or assumed nearly $11 billion of gross par exposure, which bolsters the company’s flow of embedded earnings associated with its unearned premium base.”

With regard to the affirmation of AGM’s rating, Moody’s cited AGM’s “strong capital profile, conservative underwriting of US municipal and international infrastructure finance risks and leading market position in the financial guaranty sector…AGM’s ability to organically generate significant capital through premium and investment earnings make its credit profile resilient to a broad range of stress scenarios.”

“We are pleased that Moody’s has upgraded AGC’s rating and recognized the improved credit quality of its insured portfolio and strategic position within Assured Guaranty. Moody’s also acknowledged AGM’s leading position in the bond insurance market, strong capital profile, ability to generate ‘significant capital’ through our premium and investment earnings, and the resolution of a large majority of the firm’s Puerto Rico exposures,” said Dominic Frederico, President and CEO of Assured Guaranty, in response to the upgrade. “Assured Guaranty is poised to continue growing its insured portfolio to sustain and increase its store of unearned premiums, its future earnings power and its financial strength. Assured Guaranty continues to offer a uniquely beneficial value proposition to both issuers and fixed income investors.”