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ASSURED GUARANTY LTD – 10-Q – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Form 10-Q comprises data that features or relies upon ahead
wanting statements inside the that means of the Private Securities Litigation
Reform Act of 1995. Forward wanting statements give the expectations or
forecasts of future occasions of Assured Guaranty Ltd. (AGL) and its subsidiaries
(collectively with AGL, Assured Guaranty or the Company). These statements can
be recognized by the truth that they don't relate strictly to historic or
present info and relate to future working or monetary efficiency.

Any or all of Assured Guaranty's ahead wanting statements herein are based mostly on
present expectations and the present financial surroundings and should grow to be
incorrect. Assured Guaranty's precise outcomes might range materially. Among elements
that would trigger precise outcomes to vary adversely are:

•the event, course and period of the COVID-19 pandemic and the
governmental and personal actions taken in response, the effectiveness,
acceptance and distribution of COVID-19 vaccines, and the worldwide penalties of
the pandemic and such actions, together with their affect on the elements listed
beneath;
•adjustments on the earth's credit score markets, segments thereof, rates of interest, credit score
spreads or basic financial circumstances;
•developments on the earth's monetary and capital markets that adversely have an effect on
insured obligors' reimbursement charges, Assured Guaranty's insurance coverage loss or restoration
expertise, investments of Assured Guaranty or belongings it manages;
•discount within the quantity of accessible insurance coverage alternatives and/or within the
demand for Assured Guaranty's insurance coverage;
•the lack of buyers in Assured Guaranty's asset administration methods or the
failure to draw new buyers to Assured Guaranty's asset administration
enterprise;
•the likelihood that funds or pension shortfalls or different elements will consequence
in credit score losses or impairments on obligations of state, territorial and native
governments and their associated authorities and public firms that Assured
Guaranty insures or reinsures;
•insured losses in extra of these anticipated by Assured Guaranty or the failure
of Assured Guaranty to understand loss recoveries which can be assumed in its anticipated
loss estimates for insurance coverage exposures, together with because of the failure to
resolve Assured Guaranty's Puerto Rico publicity in a fashion considerably
in step with the help agreements signed so far;
•elevated competitors, together with from new entrants into the monetary warranty
business;
•poor efficiency of Assured Guaranty's asset administration methods in comparison with
the efficiency of the asset administration methods of Assured Guaranty's
opponents;
•the likelihood that investments made by Assured Guaranty for its funding
portfolio, together with various investments and investments it manages, don't
end in the advantages anticipated or topic Assured Guaranty to diminished
liquidity at a time it requires liquidity or to unanticipated penalties;
•the affect of market volatility on the mark-to-market of Assured Guaranty's
belongings and liabilities topic to mark-to-market, together with sure of its
investments, most of its contracts written in credit score default swap (CDS) type,
and variable curiosity entities (VIEs) in addition to on the mark-to-market of belongings
Assured Guaranty manages;
•ranking company motion, together with a rankings downgrade, a change in outlook, the
placement of rankings on look ahead to downgrade, or a change in ranking standards, at
any time, of AGL or any of its insurance coverage subsidiaries, and/or of any securities
AGL or any of its subsidiaries have issued, and/or of transactions that AGL's
insurance coverage subsidiaries have insured;
•the shortcoming of Assured Guaranty to entry exterior sources of capital on
acceptable phrases;
•adjustments in relevant accounting insurance policies or practices;
•adjustments in relevant legal guidelines or rules, together with insurance coverage, chapter and
tax legal guidelines, or different governmental actions;
•the failure of Assured Guaranty to efficiently combine the enterprise of
BlueMountain Capital Management, LLC (BlueMountain, now often called Assured
Investment Management LLC) and its related entities;
•the likelihood that acquisitions made by Assured Guaranty, together with its
acquisition of BlueMountain (BlueMountain Acquisition), don't consequence within the
advantages anticipated or topic Assured Guaranty to unanticipated penalties;
•difficulties with the execution of Assured Guaranty's enterprise technique;
•lack of key personnel;
•the results of mergers, acquisitions and divestitures;
•pure or man-made catastrophes or pandemics;
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•different danger elements recognized in AGL's filings with the United States (U.S.)
Securities and Exchange Commission (the SEC);
•different dangers and uncertainties that haven't been recognized at the moment; and
•administration's response to those elements.

The foregoing overview of vital elements shouldn't be construed as exhaustive,
and ought to be learn along with the opposite cautionary statements which can be
included on this Form 10-Q, in addition to the chance elements included within the
Company's 2020 Annual Report on Form 10-Okay. The Company undertakes no obligation
to replace publicly or overview any ahead wanting assertion, whether or not in consequence
of recent data, future developments or in any other case, besides as required by legislation.
Investors are suggested, nonetheless, to seek the advice of any additional disclosures the Company
makes on associated topics within the Company's stories filed with the SEC.

If a number of of those or different dangers or uncertainties materialize, or if the
Company's underlying assumptions show to be incorrect, precise outcomes might range
materially from what the Company projected. Any ahead wanting statements in
this Form 10-Q replicate the Company's present views with respect to future occasions
and are topic to those and different dangers, uncertainties and assumptions relating
to its operations, outcomes of operations, development technique and liquidity.

For these statements, the Company claims the safety of the secure harbor for
ahead wanting statements contained in Section 27A of the Securities Act of
1933, as amended (the Securities Act), and Section 21E of the Securities
Exchange Act of 1934, as amended (the Exchange Act).

Available Information

  The Company maintains an Internet site at www.assuredguaranty.com. The
Company makes out there, freed from cost, on its site (below
www.assuredguaranty.com/sec-filings) the Company's Annual Report on Form 10-Okay,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-Okay, and amendments to
these stories filed or furnished pursuant to Section 13 (a) or 15 (d) of the
Exchange Act as quickly as moderately practicable after the Company information such
materials with, or furnishes it to, the SEC. The Company additionally makes out there,
freed from cost, via its site (below www.assuredguaranty.com/governance)
hyperlinks to the Company's Corporate Governance Guidelines, the Company's Global
Code of Ethics, AGL's Bye-Laws and the charters for the committees of its Board
of Directors. In addition, the SEC maintains an Internet website (at www.sec.gov)
that comprises stories, proxy and data statements, and different data
concerning issuers that file electronically with the SEC.

The Company routinely posts vital data for buyers on its site
(below www.assuredguaranty.com/company-statements and, extra typically, below the
Investor Information tab at www.assuredguaranty.com/investor-information and
Businesses tab at www.assuredguaranty.com/businesses). The Company additionally
maintains a social media account on LinkedIn
(www.linkedin.com/company/assured-guaranty/). The Company makes use of its site and
might use its social media account as a way of exposing materials data
and for complying with its disclosure obligations below SEC Regulation FD (Fair
Disclosure). Accordingly, buyers ought to monitor the Company Statements,
Investor Information and Businesses parts of the Company's site as nicely
because the Company's social media account on LinkedIn, along with following the
Company's press releases, SEC filings, public convention calls, displays
and webcasts.

The data contained on, or which may be accessed via, the Company's internet
website or social media account shouldn't be included by reference into, and isn't a
a part of, this report.

Overview

Business

The Company stories its outcomes of operations in two distinct segments,
Insurance and Asset Management, in step with the way by which the
Company's chief working determination maker (CODM) critiques the enterprise to evaluate
efficiency and allocate sources. The Company's Corporate division actions
are introduced individually.

In the Insurance section, the Company supplies credit score safety merchandise to the
U.S. and worldwide public finance (together with infrastructure) and structured
finance markets. The Company applies its credit score underwriting judgment, danger
administration abilities and capital markets expertise primarily to supply credit score
safety merchandise to holders of debt devices and different financial
obligations that defend them from defaults in scheduled funds. If an obligor
defaults on a scheduled cost due on an obligation, together with a scheduled
principal and curiosity (debt service) cost, the Company is required below its
unconditional and irrevocable monetary warranty to pay the quantity of the
shortfall to the holder of the duty. The
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Company markets its credit score safety merchandise on to issuers and
underwriters of public finance and structured finance securities in addition to to
buyers in such obligations. The Company ensures obligations issued
principally within the U.S. and the United Kingdom (U.Okay.), and in addition ensures
obligations issued in different international locations and areas, together with Western Europe,
Canada and Australia. The Company additionally supplies different types of insurance coverage that
are in step with its danger profile and profit from its underwriting
expertise. Premiums are earned over the contractual lives, or within the case of
homogeneous swimming pools of insured obligations, the remaining anticipated lives, of
monetary warranty insurance coverage contracts.

In the Asset Management section, the Company supplies funding advisory
companies, which embrace the administration of collateralized mortgage obligations
(CLOs), alternative and liquid technique funds, in addition to sure legacy hedge
and alternative funds now topic to an orderly wind-down. Assured Investment
Management LLC (AssuredIM LLC) and its funding administration associates
(along with AssuredIM LLC, AssuredIM) have managed structured, public finance
and credit score investments since 2003. AssuredIM supplies funding advisory
companies whereas leveraging a know-how-enabled danger platform, which goals to
maximize returns for its shoppers. The institution, within the fourth quarter of
2019, of the Asset Management section diversifies the chance profile and income
alternatives of the Company. As of September 30, 2021, AssuredIM had $17.6
billion of belongings below administration (AUM), together with $1.3 billion that's managed
on behalf of the Company's U.S. insurance coverage subsidiaries.

Fees in respect of funding advisory companies are the most important part of
revenues for the Asset Management section. AssuredIM is compensated for its
funding advisory companies typically via administration charges that are based mostly
on AUM, and might also earn efficiency charges calculated as a share of internet
income or based mostly on an inside charge of return referencing distributions made to
buyers, in every case, in respect of funds, CLOs and/or accounts which it
advises.

The Corporate division consists primarily of curiosity expense on the debt of
Assured Guaranty US Holdings Inc. (AGUS) and Assured Guaranty Municipal Holdings
Inc. (AGMH) (the U.S. Holding Companies), in addition to different working bills
attributed to holding firm actions, together with administrative companies
carried out by sure subsidiaries for the holding firms. In Third Quarter
2021, it additionally included a loss on extinguishment of debt.

See Item 1. Financial Statements, Note 2, Segment Information.

Economic Environment and Impact of COVID-19

The COVID-19 pandemic continues all through the world, whereas the manufacturing,
acceptance, and distribution of vaccines for it are continuing inconsistently throughout
the globe. The emergence of COVID-19 and reactions to it, together with numerous
intermittent closures and capability and journey restrictions, have had a profound
impact on the worldwide financial system and monetary markets. The final measurement, depth,
course and period of the pandemic, and the effectiveness, acceptance, and
distribution of vaccines for it, stay unknown, and the governmental and
non-public responses to the pandemic proceed to evolve. Consequently, and on account of
the character of the Company's enterprise, the entire direct and oblique
penalties of COVID-19 on the Company should not but totally recognized to the Company,
and nonetheless might not emerge for a while.

As a consequence of the onset of the COVID-19 pandemic, financial exercise within the
U.S. and all through the world slowed considerably in early to mid-2020, however
started to get better later within the 12 months and, no less than within the U.S., continued to
broaden within the 9-month interval ended September 30, 2021 (Nine Months 2021). In
October 2021, the U.S. Bureau of Economic Analysis (BEA) reported that actual
Gross Domestic Product (GDP) was estimated to have elevated at an annual charge
of two% within the three-month interval ended September 30, 2021 (Third Quarter 2021),
in comparison with 6.7% for the three-month interval ended June 30, 2021. At the tip of
September 2021, the U.S. unemployment charge, seasonally adjusted, stood at 4.8%,
decrease than the place it began the interval at 5.9%, and down from a pandemic excessive of
14.7% in April 2020.

The degree and route of rates of interest affect the Company in quite a few methods.
For instance, low rates of interest might make the Company's credit score enhancement
merchandise much less enticing out there and scale back the extent of premiums it could
cost for that product, and, over time, additionally scale back the quantity the Company can
earn on its largely fastened-revenue funding portfolio. Specifically, the extent
of rates of interest on the U.S. municipal bonds the Company enhances influences
how excessive a premium the Company can cost for its public finance monetary
warranty insurance coverage product, with decrease rates of interest typically decreasing the
premium charges the Company might cost. On the opposite hand, low rates of interest
improve the quantity of extra unfold out there to help the distressed
residential-mortgage-backed securities the Company insures.

The 30-12 months AAA Municipal Market Data (MMD) charge is a measure of rates of interest
within the Company's largest monetary warranty insurance coverage market, U.S. public
finance. The 30-12 months AAA MMD charge began Third Quarter 2021 at 1.50% and
decreased via the primary few weeks of July 2021. It typically elevated in
the weeks that adopted and reached 1.67% by the tip of Third Quarter 2021.
Despite the rise, the typical for Third Quarter 2021 was 1.47%, barely
decrease than the 1.49% common for a similar quarter final 12 months. The Company
believes that the insurance policies being pursued by the Federal Reserve are designed to
maintain rates of interest low. In its September 2021 assembly, the Federal Open Market
Committee (FOMC) determined to
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maintain the goal vary for the federal funds charge at 0% to 0.25%, noting it
"expects will probably be applicable to keep up this goal vary till labor market
circumstances have reached ranges in step with the Committee's assessments of
most employment and inflation has risen to 2 % and is on observe to
reasonably exceed 2 % for a while." At its November 2-3, 2021 assembly,
the FOMC saved the federal funds charges unchanged.

The distinction, or unfold, between the 30-12 months A-rated General Obligation (GO)
relative to the 30-12 months AAA MMD was nearly flat all through Third Quarter 2021
because it completed the quarter at 29 foundation factors (bps) after beginning the quarter
one foundation level larger. This is down from a mean of 44.2 bps throughout the identical
quarter in 2020. In addition, BBB credit score spreads measured on the identical foundation additionally
remained regular all through the quarter, averaging 60.1 bps for Third Quarter
2021. This is considerably decrease than the 148.4 bps common for a similar
quarter in 2020. Both the A and BBB spreads are at their narrowest ranges in
over a decade. Generally, wider credit score spreads are one issue which will permit the
Company to cost larger premiums for its public finance monetary warranty
insurance coverage product.

The National Association of Realtors (NAR) reported that "present-dwelling gross sales on
a seasonally adjusted annual charge rose 7% in September from August, with all
areas exhibiting a rise." According to the NAR, the median present-houses
gross sales worth climbed 13.3% 12 months-over-12 months to $352,800. Properties sometimes offered
in 17 days in September, remaining at a report low. The S&P CoreLogic
Case-Shiller U.S. National Home Price NSA Index, protecting all 9 U.S. census
divisions, reported a 19.8% annual acquire in August 2021 (the most recent knowledge
out there), remaining the identical because the earlier month. The 20-City Composite
posted a 19.7% 12 months-over-12 months acquire, down from 20.0% within the earlier month. Home
costs within the U.S. affect the efficiency of the Company's insured residential
mortgage-backed securities (RMBS) portfolio. Improved dwelling costs typically
end in fewer losses or extra reimbursements with respect to the Company's
distressed insured RMBS dangers.

From shortly after the pandemic reached the U.S. via early 2021, the
Company's surveillance division performed supplemental periodic surveillance
procedures to watch the affect on its insured portfolio of COVID-19 and
governmental and personal responses to COVID-19, with emphasis on state and native
governments and entities that had been already experiencing vital funds
deficits and pension funding and income shortfalls, in addition to obligations
supported by income streams most impacted by numerous closures and capability and
journey restrictions or an financial downturn. Given vital federal funding
to state and native governments in 2021 and the efficiency it noticed, the
Company's surveillance division has diminished the supplemental procedures.
However, it's nonetheless monitoring these sectors it recognized as most in danger for
any developments associated to COVID-19 which will affect the flexibility of issuers to
make upcoming debt service funds. The Company's inside rankings and loss
projections, together with these for RMBS, Puerto Rico and sure different distressed
public finance exposures, replicate its supplemental COVID-19 surveillance
exercise. For details about how the COVID-19 pandemic has impacted the
Company's loss projections, see Item 1, Financial Statements, Note 4, Expected
Loss to be Paid (Recovered). Through November 4, 2021, the Company has paid much less
than $10 million in first-time insurance coverage claims it believes are due no less than in
half to credit score stress arising particularly from COVID-19. The Company at the moment
tasks practically full reimbursement of those claims.

The Company believes its monetary warranty enterprise mannequin is especially
nicely-suited to face up to world financial disruptions. If an insured obligor
defaults, the Company is required to pay solely any shortfall in curiosity and
principal on scheduled cost dates; the Company's insurance policies forbid acceleration
of its obligations with out its consent. In addition, most of the obligations the
Company insures profit from debt service reserve funds or different funding sources
from which curiosity and principal could also be paid throughout restricted intervals of stress,
offering the obligor with a possibility to get better. While the Company believes
its warranty might help the market worth of an insured obligation compared
to an analogous uninsured obligation, the Company's final loss on a defaulted
insured obligation shouldn't be a operate of that underlying obligation's market
worth. Rather, the Company's final loss is the sum of all principal and
curiosity funds it makes below its coverage much less the sum of all reimbursements,
subrogation funds and different recoveries it receives from the obligor or any
different sources in reference to the duty. For contracts accounted for as
insurance coverage, its anticipated losses equal the discounted worth of all declare funds
it tasks making much less the discounted worth of all recoveries it expects to
obtain, on a likelihood-weighted foundation. See Item 1, Financial Statements, Note
4, Expected Loss to be Paid (Recovered).

The nature of the monetary warranty enterprise mannequin, which requires the Company
to pay solely any shortfall in curiosity and principal on scheduled cost dates,
together with the Company's liquidity practices, scale back the necessity for the Company to
promote funding belongings in intervals of market misery. As of September 30, 2021,
the Company had $694 million of brief-time period investments and $101 million of money,
together with proceeds from the issuance of debt in 2021. See Item 1, Financial
Statements, Note 14, Long-Term Debt. In addition, the Company's funding
portfolio generates money over time via curiosity and principal receipts.

The Company started working remotely in accordance with its enterprise continuity
plan in March 2020, instituting necessary work-from-dwelling insurance policies in its
Bermuda, U.S., U.Okay. and French workplaces. While such insurance policies should not at the moment
necessary in a few of the jurisdictions the place it has workplaces, the vast majority of its
workforce remains to be working remotely. Some of its
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workforce has returned to the workplace, and the Company is planning for the
reopening of all its workplaces in November 2021. In response to worker suggestions
and as a part of its dedication to offering a secure and wholesome office for
staff and guests, the Company intends to implement a hybrid distant and
workplace work mannequin, amongst different security measures based mostly on regional governmental
steerage and beneficial practices for reopening its workplaces. The Company is
offering the companies and communications it usually would, and continues to
shut new insurance coverage transactions and make insurance coverage declare funds and, in its
asset administration enterprise, make trades and lift funds.

Key Business Strategies

  The Company regularly evaluates its enterprise methods. For instance, with
the institution of AssuredIM the Company has elevated its deal with asset
administration and various investments. Currently, the Company is pursuing the
following key enterprise methods in three areas: (1) Insurance, (2) Asset
Management and Alternative Investments, and (3) Capital Management.

Insurance

The Company seeks to develop the insurance coverage enterprise via new enterprise
manufacturing, acquisitions of remaining legacy monoline insurers or reinsurance of
their insured portfolios, and to proceed to mitigate losses in its present
insured portfolio.

Growth of the Insured Portfolio

  The Company seeks to develop its insurance coverage portfolio via new enterprise
manufacturing in every of its three markets: U.S. public finance, worldwide
infrastructure and world structured finance. The Company believes excessive-profile
defaults by municipal obligors, similar to Puerto Rico, Detroit, Michigan and
Stockton, California in addition to occasions such because the COVID-19 pandemic have led to
elevated consciousness of the worth of bond insurance coverage and stimulated demand for the
product. The Company believes there will probably be continued demand for its insurance coverage
on this market as a result of, for these exposures that the Company ensures, it
undertakes the duties of credit score choice, evaluation, negotiation of phrases,
surveillance and, if obligatory, loss mitigation. The Company believes that its
insurance coverage:

•encourages retail buyers, who sometimes have fewer sources than the
Company for analyzing municipal bonds, to buy such bonds;
•allows institutional buyers to function extra effectively; and
•permits smaller, much less nicely-recognized issuers to achieve market entry on a extra
price-efficient foundation.

  On the opposite hand, the persistently low rate of interest surroundings and
comparatively tight U.S. municipal credit score spreads have dampened demand for bond
insurance coverage in comparison with the degrees earlier than the 2008 monetary disaster. The Company
believes that a few of the U.S. federal tax will increase lately proposed might, if
enacted, make municipal obligations extra enticing to each institutional and
retail buyers.

  In sure segments of the worldwide infrastructure and structured finance
markets the Company believes its monetary warranty product is aggressive with
different financing choices. For instance, sure buyers might obtain advantageous
capital requirement therapy with the addition of the Company's warranty. The
Company considers its involvement in each worldwide infrastructure and
structured finance transactions to be helpful as a result of such transactions
diversify each the Company's enterprise alternatives and its danger profile past
U.S. public finance. The timing of recent enterprise manufacturing within the worldwide
infrastructure and structured finance sectors is influenced by sometimes lengthy
lead instances and subsequently might range from interval to interval.

While volatility and dislocation within the municipal finance market within the U.S.
resulted within the Company issuing a diminished variety of new insurance coverage insurance policies in
late March and into April 2020 in comparison with the prior 12 months, the Company started
writing a better quantity of recent insurance coverage enterprise as 2020 progressed. The $17.4
billion of municipal new challenge par offered with the Company's insurance coverage in Nine
Months 2021 was essentially the most the Company insured within the first 9 months of a 12 months
since 2010. See "- Results of Operations by Segment - Insurance Segment" beneath.
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      U.S. Municipal Market Data and Bond Insurance Penetration Rates (1)
                               Based on Sale Date
                                                                                                                    Year Ended
                                                        Nine Months 2021                Nine Months 2020         December 31, 2020
                                                                ({dollars} in billions, besides variety of points and %)
Par:
New municipal bonds issued                             $        343.4                  $        330.4           $       451.8
Total insured                                          $         29.1                  $         25.4           $        34.2
Insured by Assured Guaranty                            $         17.4                  $         15.1           $        19.7
Number of points:
New municipal bonds issued                                      9,125                           8,536                  11,857
Total insured                                                   1,714                           1,605                   2,140
Insured by Assured Guaranty                                       826                             734                     982
Bond insurance coverage market penetration based mostly on:
Par                                                               8.5   %                         7.7   %                 7.6     %
Number of points                                                 18.8   %                        18.8   %                18.0     %
Single A par offered                                                27.2   %                        27.3   %                28.3     %
Single A transactions offered                                       56.4   %                        54.3   %                54.3     %
$25 million and below par offered                                   21.6   %                        22.0   %                20.9     %
$25 million and below transactions offered                          21.9   %                        21.9   %                21.0     %


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(1)  Source: The quantities within the desk are these reported by Thomson Reuters. The
desk excludes Corporate-CUSIP transactions insured by Assured Guaranty, which
the Company additionally considers to be public finance enterprise.

  The Company additionally considers alternatives to amass monetary warranty
portfolios, whether or not by buying monetary guarantors who're now not actively
writing new enterprise or their insured portfolios. These transactions allow the
Company to enhance its future earnings and deploy extra capital.

Loss Mitigation

In an effort to keep away from, scale back or get better losses and potential losses in its
insurance coverage portfolio, the Company employs various methods.

  In the general public finance space, the Company believes its expertise and the
sources it's ready to deploy, in addition to its potential to supply bond
insurance coverage or different contributions as a part of an answer, end in extra favorable
outcomes in distressed public finance conditions than could be the case with out
its participation. This has been illustrated by the Company's position within the
Detroit, Michigan; Stockton, California; and Jefferson County, Alabama monetary
crises, and extra lately by the Company's position in negotiating numerous
agreements in reference to the restructuring of obligations of the
Commonwealth of Puerto Rico (Commonwealth) and numerous obligations of its
associated authorities and public firms. The Company will even, the place
applicable, pursue litigation to implement its rights. For instance, it initiated
various authorized actions to implement its rights with respect to obligations of
the Commonwealth and numerous obligations of its associated authorities and public
firms.

On February 22, 2021, Assured Guaranty Municipal Corp. (AGM) and Assured
Guaranty Corp. (AGC) entered right into a revised Puerto Rico General Obligation (GO)
and Public Buildings Authority (PBA) plan help settlement (PSA) (GO/PBA PSA)
with sure different stakeholders, the Commonwealth, and the Financial Oversight
and Management Board for Puerto Rico (FOMB). Then, on May 5, 2021, AGM and AGC
entered right into a PSA (HTA/CCDA PSA) with sure different stakeholders, the
Commonwealth, and the FOMB with respect to the Puerto Rico Highways and
Transportation Authority (PRHTA) and the Puerto Rico Convention Center District
Authority (PRCCDA). More lately, on July 28, 2021, AGC joined the PSA (PRIFA
PSA) signed on July 27, 2021 by sure different stakeholders, the Commonwealth,
and the FOMB with respect to the Puerto Rico Infrastructure Financing Authority
(PRIFA). Previously, on May 3, 2019, AGM and AGC entered right into a restructuring
help settlement (PREPA RSA; along with the GO/PBA PSA, HTA/CCDA PSA, and
PRIFA PSA, the Support Agreements) with the Puerto Rico Electric Power Authority
(PREPA) and different stakeholders, together with a gaggle of uninsured PREPA
bondholders, the Commonwealth and FOMB, that's meant to, amongst different issues,
present a framework for the consensual decision of the therapy of the
Company's insured PREPA income bonds.

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With AGM and AGC agreeing to the HTA/CCDA PSA, GO/PBA PSA, and (within the case of
AGC) PRIFA PSA, 95% of Assured Guaranty's internet par excellent to Puerto Rico
credit as of September 30, 2021, is now coated by a Support Agreement. Each
Support Agreement consists of various circumstances and the associated debtor's plan
of adjustment should be authorised by the Title III court docket, so there may be no
assurance that the consensual resolutions embodied within the Support Agreements
will probably be achieved of their present type, or in any respect. Even if the consensual
resolutions embodied within the Support Agreements are authorised and documented as
contemplated, they might be topic to additional authorized problem or the events to
the authorized paperwork might not reside as much as their obligations. Both financial and
political developments, together with these associated to the COVID-19 pandemic, might
affect implementation of the consensual resolutions contemplated by the Support
Agreements and the quantity the Company realizes below the Support Agreements and
associated debtors' plans of adjustment, in addition to the efficiency or decision
of the Puerto Rico exposures not topic to a Support Agreement. Nevertheless,
the Company believes these developments mark a milestone in its Puerto Rico loss
mitigation efforts. For extra details about developments in Puerto Rico and
associated restoration litigation being pursued by the Company, see Item 1, Financial
Statements, Note 3, Outstanding Exposure and the Insured Portfolio part
beneath.

  The Company is at the moment working with the servicers of a few of the RMBS it
insures to encourage the servicers to supply options to distressed
debtors that may encourage them to proceed making funds on their loans to
assist enhance the efficiency of the associated RMBS.

  In some cases, the phrases of the Company's coverage give it the choice to pay
principal on an accelerated foundation on an obligation on which it has paid a declare,
thereby decreasing the quantity of assured curiosity due sooner or later. The
Company has at instances exercised this selection, which makes use of money however reduces
projected future losses. The Company might also facilitate the issuance of
refunding bonds, by both offering insurance coverage on the refunding bonds or
buying refunding bonds, or each. Refunding bonds might present the issuer with
cost reduction.

Asset Management and Alternative Investments

  AssuredIM is a diversified asset supervisor that serves as funding adviser to
CLOs, alternative and liquid technique funds, in addition to sure legacy hedge and
alternative funds now topic to an orderly wind-down. As of September 30, 2021,
AssuredIM is a high-25 CLO supervisor by AUM, as revealed by Creditflux Ltd.
AssuredIM is actively pursuing alternative methods centered on healthcare and
asset-based mostly lending and liquid methods referring to municipal obligations.

Over time, the Company seeks to broaden and additional diversify its Asset
Management section resulting in elevated AUM and a price-producing platform. The
Company intends to leverage the AssuredIM infrastructure and platform to develop
its Asset Management section each organically and thru strategic
combos.

  The Company screens sure working metrics which can be widespread to the asset
administration business. These working metrics embrace, however should not restricted to,
funded AUM and unfunded capital commitments (collectively, AUM) and funding
advisory administration and efficiency charges. The Company considers the
categorization of its AUM by product sort to be a helpful lens in monitoring the
Asset Management section. AUM by product sort assists in measuring the period
of AUM for which the Asset Management section has the potential to earn
administration charges and efficiency charges. For a dialogue of the metric AUM, please
see "- Results of Operations by Segment - Asset Management Segment."

Additionally, the Company believes that AssuredIM supplies the Company an
alternative to deploy extra capital at enticing returns enhancing the
danger-adjusted return on a portion of the funding portfolio and doubtlessly
growing the quantity of dividends sure of its insurance coverage subsidiaries are
permitted to pay below relevant rules. The Company allotted $750
million of capital to put money into funds managed by AssuredIM plus $550 million of
basic account belongings now managed by AssuredIM below an Investment Management
Agreement (IMA). The Company is utilizing these allocations to (a) launch new
merchandise (CLOs, alternative funds and liquid technique funds) on the AssuredIM
platform and (b) improve the returns of its personal funding portfolio.

As of September 30, 2021, AG Asset Strategies LLC (AGAS) had dedicated $659
million to funds managed by AssuredIM (AssuredIM Funds), together with $279 million
that has but to be funded. This capital was dedicated to a number of funds, every
devoted to a single technique together with CLOs, asset-based mostly finance, healthcare
structured capital and municipal bonds.

Under the IMA with AssuredIM, AGM and AGC have collectively invested $250 million to
municipal obligation methods and $300 million to CLO methods. All of those
methods are in step with the funding strengths of AssuredIM and the
Company's plans to proceed to develop its funding methods.

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Capital Management

The Company has developed methods to effectively handle capital inside the
Assured Guaranty group.

From 2013 via November 4, 2021, the Company has repurchased 129.8 million
widespread shares for about $4,044 million, representing roughly 67%
of the full shares excellent at first of the repurchase program in
2013. On August 4, 2021, the Board of Directors (the Board) licensed the
repurchase of a further $350 million of
widespread shares. Under this and former authorizations, as of November 4, 2021,
the Company was licensed to buy $220 million of its widespread shares. Shares
could also be repurchased every now and then within the open market or in privately
negotiated transactions. The timing, type and quantity of the share repurchases
below this system are on the discretion of administration and can depend upon a
number of elements, together with funds out there on the guardian firm, different
potential makes use of for such funds, market circumstances, the Company's capital
place, authorized necessities and different elements, a few of which elements could also be
impacted by the direct and oblique penalties of the course and period of
the COVID-19 pandemic and evolving governmental and personal responses to the
pandemic. The repurchase program could also be modified, prolonged or terminated by the
Board at any time and it doesn't have an expiration date. See Item 1, Financial
Statements, Note 15, Shareholders' Equity, for extra details about the
Company's repurchases of its widespread shares.

                          Summary of Share Repurchases
                                                                                                       Average worth
                                                        Amount             Number of Shares              per share
                                                                   (in tens of millions, besides per share knowledge)
2013 - 2020                                          $   3,662                   121.5               $        30.14
2021 (First Quarter)                                        77                     2.0                        38.83
2021 (Second Quarter)                                       88                     1.9                        46.63
2021 (Third Quarter)                                       140                     2.9                        47.76
2021 (via November 4)                                   77                     1.5                        51.90
Cumulative repurchases because the starting of 2013   $   4,044                   129.8                        31.16




                 Accretive Effect of Cumulative Repurchases (1)
                                                     Third Quarter                                   As of September
                                                         2021               Nine Months 2021             30, 2021
                                                                               (per share)
Net revenue (loss) attributable to AGL               $       0.01          $            0.66
Adjusted working revenue                                   0.16                       1.25
Shareholders' fairness attributable to AGL                                                             $       36.81
Adjusted working shareholders' fairness                                                                      33.26
Adjusted ebook worth                                                                                          58.68


_________________

(1) Represents the estimated accretive impact of cumulative repurchases since
the start of 2013.

  The Company considers the suitable mixture of debt and fairness in its capital
construction. On May 26, 2021, the Company issued $500 million of three.15% Senior
Notes, due in 2031 for internet proceeds of $494 million. On July 9, 2021, a portion
of the proceeds from the issuance of the three.15% Senior Notes had been used to redeem
$200 million of AGMH debt as follows: all $100 million of AGMH's 6 7/8%
Quarterly Interest Bonds due in 2101, and $100 million of the $230 million of
AGMH's 6.25% Notes due in 2102. See "- Liquidity and Capital Resources - AGL and
its U.S. Holding Companies" for the U.S. Holding Companies' anticipated debt
service for its lengthy-time period debt.

On August 20, 2021, the Company issued $400 million of three.6% Senior Notes, due in
2051 for internet proceeds of $395 million. On September 27, 2021, the entire
proceeds from the issuance of the three.6% Senior Notes had been used to redeem $400
million of AGMH and AGUS debt as follows: all $100 million of AGMH's 5.60% Notes
due in 2103, the remaining $130 million of AGMH 6.25% Notes due in 2102, and
$170 million of the $500 million of AGUS 5% Senior Notes due in 2024.

In Third Quarter 2021, because of these redemptions, the Company acknowledged
a loss on extinguishment of debt of roughly $175 million on a pre-tax
foundation ($138 million after-tax) which represents the distinction between the
quantity paid

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to redeem the debt and the carrying worth of the debt. The carrying worth of the
debt included the unamortized honest worth changes that had been recorded upon the
acquisition of AGMH in 2009.

Proceeds from the debt issuances that weren’t used to redeem debt are being
used for basic company functions, together with share repurchases.

Since the second quarter of 2017, AGUS has bought $154 million in principal
of AGMH's excellent Junior Subordinated Debentures. The Company might select to
redeem or make extra purchases of this or different Company debt sooner or later.
See Item 1. Financial Statements, Note 14, Long-Term Debt.

Municipal Assurance Corp. Merger

On April 1, 2021, Municipal Assurance Corp. (MAC) merged with and into AGM, with
AGM because the surviving firm. Upon the merger all direct insurance coverage insurance policies
issued by MAC turned direct insurance coverage obligations of AGM. As a consequence, the
Company wrote off the $16 million carrying worth of MAC's insurance coverage licenses in
the primary quarter of 2021. This restructuring of the Company's U.S. insurance coverage
subsidiaries will simplify the organizational and capital construction, scale back
prices, and is anticipated to extend the longer term dividend capability of the U.S.
insurance coverage subsidiaries.

Executive Summary

This govt abstract of administration's dialogue and evaluation highlights
chosen data and should not comprise the entire data that's
vital to readers of this Quarterly Report. For a extra detailed description
of occasions, traits and uncertainties, in addition to the capital, liquidity, credit score,
operational and market dangers and the important accounting insurance policies and estimates
affecting the Company, this Quarterly Report ought to be learn in its entirety and
along with the Company's 2020 Annual Report on Form 10-Okay.

Several major drivers of volatility in internet revenue or loss should not essentially
indicative of credit score impairment or enchancment, or final financial beneficial properties or
losses similar to: adjustments in credit score spreads of insured credit score by-product
obligations, adjustments in honest worth of belongings and liabilities of VIEs and
dedicated capital securities (CCS), adjustments in honest worth of credit score derivatives
associated to the Company's personal credit score spreads, and adjustments in danger-free charges used
to low cost anticipated losses (recoveries).

  Other elements that drive volatility in internet revenue embrace: adjustments in anticipated
losses and recoveries, the quantity and timing of the refunding and/or termination
of insured obligations, realized beneficial properties and losses on investments (together with
credit score impairment), adjustments in international change charges, the results of huge
settlements, commutations, acquisitions, the results of the Company's numerous
loss mitigation methods, and adjustments within the honest worth of investments in
AssuredIM Funds. Changes within the honest worth of AssuredIM Funds have an effect on the quantity
of administration and efficiency charges earned. Changes in legal guidelines and rules,
amongst different elements, might also have a big impact on reported internet revenue
or loss in a given reporting interval.
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Financial Performance of Assured Guaranty

                               Financial Results
                                                           Third Quarter                          Nine Months
                                                       2021               2020              2021               2020
                                                                 (in tens of millions, besides per share quantities)
GAAP
Net revenue (loss) attributable to AGL             $        17          $     86          $    126          $     214
Net revenue (loss) attributable to AGL per diluted
share                                             $      0.22          $   1.02          $   1.66          $    2.43
Weighted common diluted shares                          73.6              83.8              75.7               88.0

Non-GAAP

Adjusted working revenue (loss) (1) (2) $ 34 $

  48          $    197          $     200
Adjusted working revenue per diluted share (2)   $      0.45          $   0.58          $   2.60          $    2.28
Weighted common diluted shares                          73.6              83.8              75.7               88.0

Components of whole adjusted working revenue
(loss)
Insurance section                                 $       214          $     81          $    445          $     320
Asset Management section                                   (7)              (12)              (16)               (30)
Corporate division                                       (169)              (18)             (232)               (83)
Other                                                      (4)               (3)                -                 (7)
Adjusted working revenue (loss)                  $        34          $    

48 $ 197 $ 200

Insurance Segment
Gross written premiums (GWP)                      $       106          $    121          $    277          $     334
Present worth of recent enterprise manufacturing (PVP)
(1)                                                        96               117               263                264
Gross par written                                       8,561             7,432            20,170             16,477
Asset Management Segment
Inflows - third celebration                             $       843          $      1          $  2,082          $     466
Inflows - intercompany                                     73               167               182                931



                                                As of September 30, 2021                    As of December 31, 2020
                                               Amount              Per Share              Amount              Per Share
                                                              (in tens of millions, besides per share quantities)
Shareholders' fairness attributable to AGL  $       6,300          $     88.42          $      6,643          $     85.66
Adjusted working shareholders' fairness
(1)                                               5,906                82.89                 6,087                78.49
Adjusted ebook worth (1)                           8,727               122.50                 8,908               114.87
Gain (loss) associated to the impact of
consolidating VIEs (VIE consolidation)
included in adjusted working
shareholders' fairness                                  -                    -                     2                 0.03
Gain (loss) associated to VIE consolidation
included in adjusted ebook worth                      (9)               (0.12)                   (8)               (0.10)
Common shares excellent (3)                      71.2                                       77.5


____________________

(1)  See "-Non-GAAP Financial Measures" for a definition of the monetary
measures that weren't decided in accordance with accounting ideas
typically accepted in the United States of America (GAAP), a reconciliation of
the non-GAAP monetary measure to essentially the most instantly comparable GAAP measure, if
out there, and for extra particulars.
(2)  "Adjusted working revenue" is the Company's section measure.
(3)  See "- Overview- Key Business Strategies - Capital Management" above for
data on widespread share repurchases.


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