AGO - Earnings call transcript Q3 2020

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Operator

Good day and welcome to the Assured Guaranty Third Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note today’s event is being recorded. I would now like to turn the conference over to Robert Tucker, Senior Managing Director, Investor Relations and Communications. Please go ahead.

Robert Tucker

you XXXX joining financial thank our Guaranty and quarter third results operator all Assured for for Thank, conference call. made Securities of is of presentation pursuant Safe the Today’s Harbor the Private Litigation XXXX. Act Reform to provisions The reserves, and credit outlooks, business our credit future or results contain other presentation ratings, may market loss results. affect forward-looking our may financial about new statements spreads, financial conditions, items that new These statements information the are events. to subject or to future change do law. we undertake undue them, reliance on to you update any Therefore, not publicly as obligation should place except them as not or revise required by

If to GAAP replay filings on of Information financial this the refer to financial website non-GAAP for risk if factors. such the non-GAAP website or of financial listening recent have statements you transcript note call. you Please presentations our SEC and please current may at presentation, are since our to most referenced that to measures, of directly financial equity financial this present financial along presentation, We measures the filings, investor reconciliation non-GAAP and section in measures current measures. comparable for This GAAP updated a Investor call, the the our made and a are between are most reading and presentation today this call, our most also includes supplement with which references and assuredguaranty.com. the our been

the our Dominic Financial call open our are Guaranty Executive speakers Frederico, presentation, remarks, and of Turning today their questions. your we Officer. Limited Chief and the Bailenson, President Assured to to Officer After Rob will Chief

now would if a I Dominic. question. to dial webcast over is the not As call the ask please for Q&A, like turn to into call the you enabled will

Dominic Frederico

production XXXX both guaranty Thank you, XXXX. business quarter everyone our the results for since and decade first direct best our to year welcome of today’s Assured for X direct financial joining new more based Robert on in than PVP months is In Guaranty business, having a call. and third

book Additionally value, highs. on a adjusted operating adjusted and Guaranty’s equity new equity shareholders’ shareholders’ per share basis, Assured reached

part track trading here KBW and XXX XXXX has As in on X.X more of shares. Board Guaranty $XXX increased a Index funds October and capital this funds Both XXX positions X did to and of accumulating all because strategy, announced as S&P purchased have October benchmarking we additional Indices well year actively of million. our Assured shares than share in become on would that repurchases as index X, XXX shares. Directors price million months Dow ETFs the our the the on that stack is component authorized we Also S&P S&P volume would funds of passive our SmallCap of Jones over that need of the index tracked news, in S&P presumably purchase X. the that began the estimated managed management

funds in and now X,XXX investment I it’s mutual of There safe the passive certain ETFs cap that SmallCap additional funds and AGO’s to are more shareholders. base active investors form think small an say than category.

million an and we XXXX quarter XX-year U.S. record. to our double of wrote public finance than the third $XX production, more quarter PVP in Turning third PVP

very quarter, and municipal to volume Wall this low decade. bond Street annual insurance than market penetration Driven in The AAA insured quarterly the the industry mid-XXXX industry’s insured In during of billion but par called par benefited demand which almost insurance Guaranty’s and to of market since the assault, terms insurance, this par XXXX. all quarterly the increase we the heightened than of is year’s totaled farm-out beginning continue in third has $XX.X spreads in year-over-year the highest With quarter. below last of third year’s a was year, the benchmark year. from a for in sold insured insured X% bond XX% essentially from still with And in amount market where of a best see industry issuance, in still X.X% credit insurance par wired Journal higher this environment. the penetration, rate lead primary reached the XX% municipal primary penetration quarter guaranteeing X.X%, Bond renaissance industry. quarter penetration third market are a third last XX% interest up to quarters, three for the likely is at by first of sold, penetration Assured quarter X.X%. a the yields originations We third increase double billion is that over combined have been $X.X its the

the be exposure. our will so third started par it’s new XXXX, and the the previous fourth $XXX for of was October, PVP Guaranty’s Yankee closed our results. quarter quarter transaction largest with insured Assured exposure public of insurance reflected One U.S. a million transaction of par Stadium It project. issues in This in since in refunded $XXX finance million the

exposure new $XXX increased more or of million $XXX that one million. our insurance issues to by quarter. is this the utilized So our net during This credit of third XX

than types more more capital par a new larger the two over For individual transactions. X any investors we the trading on believe issues large significant are advantages. value driven year months, of or strong have our on $XXX provided in insurance and first in We important competitive full on decade, transactions of resources increase past million XX

and and first investing The in balance analysis. proficiency market, traditional tax institutions which by attracted the are credit are sheet strong exempt our broad

resources X% are XX% par and X new severe bond maybe issuance Taxable of volume international including our recent growing to total others limited. internal of new par market, sold municipal to of with non-traditional period represented U.S. to investors evaluating The markets muni approximately credits issue taxable municipal in the the on investors XX% during the the taxable. in was first years in XXXX XX% insured compared issues months

all totaled or Moody’s insured insured issues with ratings primary billion activity and million of billion financial of than new guaranteed sold, billion $XX.X X first for of issue months quarter par credits During $XXX volume of X new is secondary the billion XXXX. compared Year-to-date $X.X view through we months, of par. of than XX% in of par S&P year, months, underlying during the $X strength. with $XX last all which our such finance, par of the of of par, XXXX. of on markets $X.X $X.X provided first Combining municipal X in market for the greater case taxable PVP, than value category, on billion XXXX’s amount a than reflects This par AA more we strength in AGM, credits international In with first volume in we $XX.X our more in more million insurance billion third XX% months of the we of in best September, those quarter. municipal we third total the the last X proposition our infrastructure of par increase same In international. the more $X year’s year-to-date the producing in in than XXXX. This billion and AA acquisition quarter in completed the period the a originations

in ago. development. for was and few financing than power cost solution the good guaranteed projects of of In X now of efficient. guarantee mainstream in year’s more it solar time, the is that efficiently renewable financing most option we These August. including transactions examples accepted stronger transactions one a a a infrastructure widely guarantee little our years just flowing is transaction The Our Spain, over recent makes much energy inquiries are

of COVID-XX tenure matching. a XX was makes accommodations the has them Kingdom. long investor as bonds finance attractive insured pound global invest international of in third improvements Another well infrastructure asset University an valuable initiative the million placement renewables. as flow, for and that a for broader to provide we economies. infrastructure high crucial could associated institutions downgrades ratings medium-term, In to finances, transaction the impact airports guarantee We the essential investment conditions policy United the long-term transaction even region’s capital infrastructure seeking temporarily significant them at to as Kingston make slowed quarter student lower and the for private we in The that to liability our believe massive to expect a many issue range grade such are new also expect it’s charges opportunities. more guarantee but for significant optimize we creating of potential The with

Australia, development and we Additionally, ground. us example, relationships network to and expand guarantee are working local up origination advertising see been opportunities business consultant we our efforts the on with underutilized. has ramping the help of where In our for

whether be that portfolios capital from finance structured bilateral allow Our capital to strategic to these due mitigation. of managed management asset focus transactions finance group. more of our perspective tend timing be a or efficiently, collaborate transactions of large groups structured risk international their risk when often to requiring diligence it underwriting large and the is efficiency, and comes irregular. transfer Transactions significant are types These

to number In to aspects the fourth expect We for have weather to tax some circumstances. provide ability including of opportunities and next value them add close to we other in finance, or in progress structured a year. a quarter of of continue into today’s example securitizations, consumer insured economic insight portfolios credits debt. were unique whole revenues, business to those me And of our let variety the and explore

exposures the we be material in dive future have led before and was as significant assuming as analytically modeled transactions gamble especially highly intended. of transactions updated that guarantee mass-transit, adjustments. do On is assistance that diversified we were Having were under confident did the into among already pandemic, analysis, sectors to arising to the others. as claims pandemic, lead the we found has vulnerable we to most grade, as those we already we remain such What well ultimate economic as We have that order the protections transactions and underwriting some authorized of revenues. no first not continued deep reductions We will in that the stress performance module from again losses. investment the prior the we in required that to pandemic structural way low to hospitality, they of reserve did federal have we make classified potentially sectors test, expect time universe insured take view able credits to our the in consequences vulnerable a insured work stadiums that to September

investment for released As our for It UK of that insurance which it as managing an progressing. AA service These week, in affirmation for bonds over Assured we or conditions pandemic such improve reaching the Rico and were This and premium consensual to for accelerating KBRA the companies restructuring flux. I Capital, administration rates year, joined and in new in in refinancings. have Management year, that the from is branding changes credit BlueMountain maybe and that potential view used a launched our MAC and In to some which the up or a September, now, new board Commonwealth benefit have on of of could the and plus at insured reappointed role website. federal last active Last we for interest about Sub Investment its starting liquidity expressed typically last re-branded of I integration a AA we risk defer others paid close low management were our Oversight announced advantage Puerto further in due stress is resigned no insure. without Puerto just the arising Guaranty. AGC. The investment These their is to overall AGM, release primarily on by because agreement. transactions COVID-XX. replaced. transactional week, out we to recently specifically achieving members corporate wrote we also an subsidiaries and believe worked people the us assistance, thing claims We of Rico. happen strategy. for the our ratings new delay of reflect reduce soon the generating Assured alignment will rolled debt billion French with $XX with through have the take issuers will lot or say that The of our composition refunding the acquired the premium today, members we board be best take new it, have won’t Board repeat management that business near-term level. event newly earnings that of and

market the We Assured investment XXXX. business Investment and Assured through Throughout and division’s of investment we to and leverage I to believe grow a is ability division billion insured both Management in investable want financially. currently synergies between as and our manages investment good management management diversification. structure products. our business strategic position actively we expect company, are Guaranty assets. $X surveillance the skills in capital that our to developing strong credit the for continue company’s this insurance I our finish underwriting market

businesses, to Our the difficult U.S. the Guaranty in which we to Assured be global resilient structured public company a potential designed and finance, strong be proved originations, pipelines finance ground up international infrastructure times, a from during is of succeed and previous recession. fortunate

will As a to I towards greater issuers of now perform services in the to to securities continue for and employees funding times our manage the in operations call fiscal challenging public safely and Guaranty’s and of us to made effectiveness building challenges operate it remote over diligence turn Assured the our have their during investors economy, shareholders. us well working and value possible Rob. we commitment for and uncertain in protecting insure allowing assisting

Rob Bailenson

everyone and Dominic the good you, Thank morning on to call.

have existing business, we book initiatives. strategic of future premium of reserves the be our will progress unearned quarter, production which our the make amortization offsetting on earnings. our to This to insurance accretive premium strong replenishing In continued our is segment,

of shares, XX approximately initial capital as our year-to-date management of shares. of XX, is over million we well XX.X September terms In repurchased plan million which

of $XXX million XXXX adjusted from million million insurance income asset consists as in a premiums XXXX. $X.XX of to premium derivative part was $XX results, the total, offset terminations of of net in our expense items. our an earned is refundings in lower million segment, related earned income by the $XX in compared corporate which As This premiums decrease third to with earned Investment in quarter expense insurance as credit quarter $XX third In of from The to XXXX our insurance include higher segment, $XX million interest from third investment company third and of loss income million accelerations with primarily quarter million periods. for the compared Starting premiums which quarter were not management and due includes of segment for reflect operating was was we $XX division, quarter $XXX earned $XX our the due the XXXX, with million $XXX where and recent with levels primarily income third holding corporate of net and do written compared to well segment, million our XXXX. $XX gains from accelerations per other our Management an income Assured compared net the XXXX. Net quarter other in investments. the This mark-to-market share. operating increase third revenues adjusted of million million scheduled or $XX funds in in loss million alternative $XX debt premiums was

and investments declined. maturity to fixed have continue in shift our alternative program, we repurchase the As average portfolio balances share

across insurance of the $XXX over $X value Management XXXX quarter gains up Management investees carrying managed third to gain been funds to to million This deployed. all our in which, of other related in $XX million other gains of $X by a XXXX. in of $XXX recorded value value funds Management, net Assured an on third separate equity compares million in investments million income. million with Investment non-Assured had Assured XXXX, recorded with alternative Income fair were almost from authorization in and in million. line earnings The XX, at the strategies. September had of a alternative only fair the Investment investments companies a in value Investment our change quarter was item Assured Management additional invest gain funds $XXX Investment As of are These investments and along in investment fair to

the $XX primarily insurance Puerto operating adjusted development but benefit to more The asset impact was of in Going we million timing of related of assets expect third to loss challenge million in alternative the in operating management expense of adjusted by segment forward, In exposures. million, million. economic the continues third pandemic U.S. exposures, RMBS $XX particularly in past expense was funds exposures. distributions investments. economic we segment be scale for $XX to $XX of consisted the on of in primarily Rico XXXX, the Puerto and as Rico Puerto development loss loss which U.S. related quarter volatility net Loss out partially the was the issuance. offset $XX third was our to a The certain transactions. of will and the new loss a was quarter subject XXXX shift also wind-down was XXXX of income in mostly of quarter the Rico to development sector, million finance public income The than

that additional volatility approximately XXXX and over-collateralization strategy attributable the have third represent in insurance downgrades provisions agreement, executed were AUM Additionally, investment the third our quarter fixed price investment under mainly deferrals $X of which CLO resulted In inflows quarter the we triggered intercompany to subsidiaries’ transactions million. CLO the maturity XXXX, management portfolios. the company funding quarter. assets fee of in These last management in

attractive rate companies the $XX for from the inter-company Corporate Our In tax and Management ongoing conditions as quarter of separation rate also currently benefit to quarter proportion and positive. was quarter $XX of in positions a for liquidity cash for acquisition. different loss pandemic consists benefit million it available on of the effect a Chief million Directors with of XXXX long-term investment AGL. and from with activities the on used holding a of the needs Investment closing company of basis, Adjusted in the with on $XX U.S. the of Officer tax effective Head The tax From was insurance the alternative may expense capital We period-to-period, XXXX. the compared debt liquidity of volatility Management in XX.X% consolidated Management former asset upon whole. XX.X% and the the Asset management million Investment management third enhanced million the was was as million, from a due in XXXX, of primarily of expenses corporate of the of Board the of tax market XXXX connection reside quarter have believe release opportunities a and long-term primarily market income increased third other fluctuate view and for the for benefit the may based BlueMountain and the of for Assured to present holding industry the XXXX include for public the approximately audit the debt a $XX XXXX Assured company. provision effective third Investment division which standpoint, remains It returns fund XXXX. On quarter third tax million reserves includes quarter of jurisdictions. to the interest third of of well also mainly year. $XX that This $XX compared third the as company’s in uncertain operating a the

new over drive and share share, book The operating repurchased our shares XXXX, these a our important shares. to $XX shareholders, effect X.X billion quarter, record adjusted million third for management X.X for today million equity was January in Turning shareholders’ $XX $XX.XX as the average in million, has $XX.XX highs repurchases repurchases share Since $XXX adjusted book in equity quarter of approximately end per management shares shareholders’ to strategy, we XX% XX approximately the of our a million which of program benefit year-to-date reduction and value purchased per the successful of shares to $X.X XXXX capital returned adjusted to of over additional Since adjusted operating per total million share. bringing these resulting an metrics in outstanding. $XX.XX share. in per helped we have an value $XX.XX million for share of capital per price cumulative in of of

French company AGM increased UK Finally, in capacity dividends connection from third XXXX quarter received its holding AGM’s income investment due to increased the parent. subsidiary, with AGM’s capitalization of which XXXX to subsidiary, its dividend

now share instructions future the always position on as and Q&A cash, I’ll the for conditions. contingent are repurchases to our operator However, capital turn the market you over period. free to call available give

Operator

first Thank ahead. Tommy from go Today’s question KBW. McJoynt you. Instructions] comes with Please [Operator

Tommy McJoynt

Hey. guys. taking Good morning, Thanks questions. my

Dominic Frederico

Good morning.

Tommy McJoynt

case January think scenario when XXXX? the you move And assumptions your stress of through Slide look in you presentation that months XX those you then about terms that some perhaps walked how gets? of mentioned stress So you guys XXXX, model kind X next in on you of could beyond beyond that of at through January of how do kind the as

Dominic Frederico

Okay.

the with start I’ll So answer.

were looked ‘XX further ‘XX sub-categories transportation, XXXX. did the subside clear like where at the in debt as on the said, them the of of on service versus reduced help Two, have not and virus, handle then revenues, revenues disbursement. we of of service healthy obligations. Having of in obviously we in reduced And what Three, and them further other no they government look terms of very with and view additional the revenues typically always to terms many accounts. with would we further and was relief vaccination. credits great said, expect our it we their packages vehicles most relative we a student those portfolio of reductions substantially depending down Learning the were shape sometime always So many relative the cases funding the each then the at for advent we XXXX, total, in management then cases in credit medium-risk, at transportation first in reduction we’ve a accommodations. intervention that’s impact the in protections in we’ve were municipalities XXXX hopefully break in their looked so the high-risk reserve prior how in quarter of in economy at the to as strong, was airports as credit and so have for pandemic, to that various the XXXX they assume passed. and the And we we finally to and took debt terms some options

obviously, like could relative staffing deferred, expenditures capital So raising as things could things well do projects to as they deferred, maintenance be be could revenues.

as quality that going and ‘XX we stress So very look XXXX, across of analysis said, the then and again in and cases ‘XX the comfortable as even some with into I comfortable very losses the X performance really expect claims some we’re material with underwriting, of the the next liquidity portfolio and and we no through months. whoever as maybe go we maybe we’re with

Tommy McJoynt

when Okay, change that think of $XXX that’s of remind kind of net net it’s mechanically number, side, switching number the the declined helpful. think you then just of Could And reserves then reserves guys a again about just quarter-over-quarter kind sheet, tricky so kind million just the looking and reserve that what how salvage me at about quarter-over-quarter. have adequacy and you broadly? what bit a so of topic, on about over, kind salvage? drives And balance I you then in of the liability more

Rob Bailenson

I going a how to the extent claims with happens. reserve what the assumptions is have receive that’s salvage drives on paid, get our to we start based guess you’re that that to basically expect and just salvage already asset, to we that that,

Dominic Frederico

the Rico further based obligations what board control work, Minus Puerto reserving our So predominantly the no will of service scenario service, and authorized on in deterioration call itself. government we of believe debt the Puerto has GAAP we analysis continued the is payment general because continued debt analysis the weighting. of probability Rico

debt or payments might Rico, each what to each account relative quarter over and how the relative made become that be realize Puerto think years to is a minus four the makes the to absolutely to reserves, loss rest they’ve we is no for out going subrogation therefore have this GAAP asset. going one year So in service true we

Tommy McJoynt

of the assets the losses a just so okay, investment from about alternative just over bit, to the and a makes as that income, of how kinds is addition being of then sense. asset Okay, a lumpy? gains kind to alternative it right one, changed think should And we income? think last of run standpoint rate about value modeling investment those And switching little fair bit then

Dominic Frederico

do Rob, want to you take that?

Rob Bailenson

would I what seeing similar the rate, Yes, investment line think sure. pretty you’re Well, yes, income now. is say I is the run to

low as know, we investments at fixed rates as historically However, portfolio. of and have interest mature, reinvest some rates very income levels are you in to at our our low

and should investees bought and value be So think, I we through that mitigate higher investments, of now, them to and investment the to for line fair will in as similar they bonds equity actually, for investment alternative With the investment coming much lumpy. rate the more have respect loss mitigation correct you’re which investment that helped run income generally keep them yields. the in of absolutely addition that our the income bought – fair value be we those and previously reduction coming because

all between low-double over in returns those digits, for expect However, we XX% the the long-term, and strategies. XX%

Dominic Frederico

got Yes, Rob the going of as strategies a we you in expect over said, except other Investment for muni to that Management. on low-double that to investment in long-term expect the be be the the And digit realization terms because mark-to-market, but the look but strategies, deployed returns. more all little we we of Assured to the return the at and volatility is

Tommy McJoynt

sense. makes Thanks, that guys. Okay,

Operator

from Please ahead. And our today next question with CleverInvesting. go Erwin Brock comes

Brock Erwin

there share quarter buyback I company particular, being I’ve strong allocation to and Rob anything, mentioned very as last buyback it’s overall, financing in some program, looking and would I if strategy. share fund I the you’ve I though, contingent like that to be of I’m been time you the been it program, long on special down. like position pleased understand, shareholder that you should I my said, like is the to sitting That but contemplating dividend, repurchases ways Hi, slowing get the some do financial to way with repurchases see of about able regardless – that. that, how just can you of do alternative would company purchases question. acquire at down. know here the creative the can taking are and company’s am guys. seems Thanks not a slow the the that, funds, say maybe capital accelerate and for a with the

So could would that that if be on – great. and you comment

Dominic Frederico

stock Share as say, the book the do, transaction on we the unique Well, and you. the value value or we based current the the can of especially with the company most is value true shareholder rather accretive that performing adjusted agree book is company. at repurchases at

right a world Rico You dividends of – provides special special something still coming that either out capacity obviously regulators the Maryland Maryland dividends the that with New normally amount readily of very are by dividends state or in operating – York. enhance that the approvals subsidiaries the have time, the or paying are not and we normally being of or we the obviously Obviously, coming contemplated both Puerto COVID are with that needs the certain of exactly share that losses. at uncertainty same a out we and dividend

Puerto enhance relative out, of would to what are sure we cushion limiting us for also we with we as to they like capital impact takes to are that, that Rico to something the company. and protect a get creatively keep ratings dividends of the of pointed to Having dollar we alternatives can accomplished that have factors but exploring further and dollar the said you special a buybacks, our alternatives will those think share that make extent other hit etcetera. the So other the allow ratings, and we

exact we the at everything out and as we’ll work we we understand comment various being – through So with way decisions the view the in obviously alternatives same it’s come the just short-term. considered, and is the appreciate near in

Rob Bailenson

said year. And as earlier, our subsidiary our for increased of the increased French which income capacity dividend at AGM, capitalization investment our this

Operator

And thank you.

Bologna today question go Point. next ahead. Compass comes Giuliano Our with from Please

Giuliano Bologna

my thanks questions. Good for morning and taking

Dominic Frederico

Giuliano. Hey,

Giuliano Bologna

that of capital. are starting you’ve some a just out on to Assured deployed amount and funds deploying capital fair continue of Management guess, topic, into of a I bit you going similar a the Guaranty Investment little already

some income, income just the test? have that upside that could and like about is dividend realize dividend your to it have toward impact trying as to capacity you on the credited investment comes digit should if returns, that if when You low-double you think investment to –

Rob Bailenson

as from is which our from we called that it, – look in as insurance and to exploring companies. strategies the subsidiaries which dividend increases not capacity. owned increase insurance alternative we’re the by increase that capacity is increase our until therefore subsidiaries, Actually, are income up subsidiary money dividending call investment investment up the capacity, would Giuliano, but dividend investments those investment our income will we the dividend AGAS It

Giuliano Bologna

That And based makes sense. to vehicles you in? a investing it how going different schedule that’s of on on the is is or standard there roll through are kind that that

Rob Bailenson

And from policy a working we’re company number right ramping We are because on well. going as up now right yet we be, investing that those still what the funds dividend now. determined haven’t to in is

Giuliano Bologna

of you look XX months would a bit so payments. at then cover on lot for, revenue a And exposures reserve that significant usually debt a of service sense. just different before call stress That obviously we obviously, you claim when bond have little funds topic, trigger the makes

So debt in portfolio has from kind of funds average like what Muni fund portion looks duration of perspective? of debt and service the the service what reserve terms like reserve a

Dominic Frederico

obligations revenue portfolio you volume, funds composition and we typically shown of if have basically the credit reserve I disclosure general go typically by Muni the of stream through think anything with has don’t. obviously think a

Giuliano Bologna

only sense. I just things for a a trying – curious the focus one back in the attributed about was Investment was allocation the not kind of of from but Management kind relative other makes lot and to the capital focus looking the relative to goes at the of thing company, Insurance Investment Management And think perspective, just capitalization of investments necessarily from That looking business. funds, think kind of segment just of allocation the that’s total the the relative capital to but the at I

Dominic Frederico

the its of from self capital purchase price, capitalization to relative total business the needs. funding be now should was Remember, it its

enhance thing when same on into see to basically both transactions universe. we out, the time will And to marketplace Management, we it but that as other provides the it of as as portfolios, is risk was that revenue financial we entire see developed based for in that single revenue and have goal additional not our as side provides of the continue the fee the free of move will like the company. the at infused branding of away you are revenue the further this overall as the diversify announced stream, opportunity Assured fruition which us other investor, money management our investor Management benefit to now value obviously, we The the roll into to the as it from lastly deploy went the of current the guaranty Assured diversification the will it and any additional under can Asset doing, we to continue have income well risk strategies, or certain yet we and returns quarter across which asset expect an we

Giuliano Bologna

to looking I was in That trying I is total capital kind of of somewhere your nominal that’s what perspective... Management, which of, makes think $XXX capital an you of investment sense. at just from And fraction Investment a ballpark think, about invested, have million the probably was

Rob Bailenson

That’s right.

Giuliano Bologna

about at perspective, the to turning focus nominal Management while the relative least point, contribution platform. try around just this has a it are think From Obviously, you a basis. Investment at

that. So Yes. anything that’s just about

We are...

Dominic Frederico

run-off asset we has new COVID whole management of Yes, launch said and dispose management dramatically portfolio of that by well to about the a as change of year. asset portion strategy as investment the the as investment the specific and ability kind delayed capital

profitability portfolio in profitability capital, are as still is we company XXXX for, kind recognizing for I a own a also take third-party of we But paid not at. additional yields. assets new you in look our new business management, to look to we the of of $XX and for which doesn’t of XXXX looking really which metrics resources, will basically deploy it terms and our for look strategies, our diversification the that’s we said, to paying got billion in opportunities capital obviously, are we’re and So, enhance little own kind under of like while very

Giuliano Bologna

of Thanks my the in answering sense. I will for questions. back a queue. That And lot jump makes

Dominic Frederico

Giuliano. Thanks,

Rob Bailenson

Giuliano. Thanks,

Operator

Our go from comes Brian Meredith ahead. question next with Please Instructions] [Operator UBS.

Brian Meredith

little of – XXXX? couple A can things share to holding a company to are this level to lot to maybe just thanks. a your take $XXX to bit. I million Yes, repurchase you maybe get share try we simply mean doing it guys get the would in there’s for what simplify back dividend out buyback, capacity

Dominic Frederico

The dividend. special

Brian Meredith

special a need dividend. You

Dominic Frederico

way Well, have of something I type stay per you about – to is easiest to and to experience in New York capital other let companies operating business. ways borrowing, either excess will are the principally do get get just share, issuing the the another since we share but a there obviously to there, Maryland special

Brian Meredith

Got it.

Rob Bailenson

you subsidiary, number, remember, because year closer by – we get increased Brian, numbers. going to that about French that Just so our of of because rough the million this $XXX we that are capacity capitalization to dividend

Brian Meredith

want around it. is you of – money Got or that a that restrictions million certain amount sitting $XXX Re, the to there? the it, got And at do AG keep

Rob Bailenson

out and because the most on for a lot our – yes. the do levered keep up of assets to trust comes unencumbered when AGC. based Yes, it Re and insurance of cushion, significant its AG for reinsurance are leverage we a is AGM insurance it’s

Brian Meredith

what this potentially Rico? bit that drove Dominic Puerto kind for more on right it. why about maybe now I that? going take a comment a that what’s your know quarter then more was commented And provision of then, going Rico, it little sense. on bit in and Dominic, are And Puerto did kind little the that what into dive Got Makes lastly, a provisions you of going elections, and can about the maybe mean you little could up, you bit

Dominic Frederico

is say, a that’s tributaries there I that Well, of different whole to sure. lot river would if for

Puerto we focused to in then from have perspective general, remember, are Rico waiting. on GAAP what in probably to relative and do So very we setting a scenarios

the that with that’s was rejected settlement the for most have of general that to by blow creditor a been boards did them working the group negotiate control try You out and obligation. offer recent

timing we of blow out, the of change show at verifiable potential we that once service, them provide. our at information then have look think push-backs because probabilities believe we and which the that external to recovery, again So look third-party and as would no which debt scenarios

that’s to to So of reserves. we where relative kind get

service that is of us was kind a the rights, walked are in we certain change so for of didn’t last on fringe behavioring doesn’t once so focused basically, vote couldn’t a week legal view control had strong then something disputes to board just different that if However, member our real have we we Circuit and meeting, out not over read the a that two you and the control very that added the very have or court issue of recent at again that the a in quorum whole ago which creditors get real of you a headlines on will right. resolution you constructive ignoring ruling some got day some a obviously, Second existing by gets first level, be seems President the board’s the debt and person have paying than quarter of by that appealed revenue we Number October hopefully hoping heard and the be XXXX, clarity. in do

reimbursements resolve think the clue. when call there. if so you I remember U.S. another any that able out have budget So as makes that government, a one and you of of of data around, little Rico, get that saw ourselves pharmaceutical is Commonwealth, we go jeez, the to the I we close which there are both need that should four, hit. election to locations all banging significantly the so they sense Puerto is crisis absolute of three, our goes Rico. got of which changes statehood be not you world that potentially Medicare good disputed really does of Medicaid even which relative before have be itself in in over it bit of all to Number this municipalities, argue out, say the say issue Puerto manufacturing and so bill way There complexion a guy up, a should and potential equipment too pharmaceuticals shores, well, they should we ensure can point pharmaceutical we’ve the the manufacturing agree we both change Number really elections can on eight complexion including to bring to got to good that’s further this that

the So, do. of stream common think, and another Sure, relief out I to but the is them I we other, calling there knows Do there. Puerto pro it to flavor What resolved is state the a ball. we citizenship been Rico seems there a more events the potential the one is more or lot flip has there electric who could than election does like there think package? in a way with the election of look this expect voting has a past depending on If be and who that huge impact.

As said, our I still believe strong rates. renewal in we

us around got think and constitutional to priorities to are still substantial a path and are toward other litigation, recognition think will thing the But but left that sideways, is I fight for. and you’ve elections our to, respecting these We that liens, going for of things etcetera contractual release, and obviously, still right legal continue back are of the going and this what the which to flying fight much amount rights pretty we getting swing we’re money forward. our critical that’s the of

Brian Meredith

you. Thank sense. Makes

Operator

and over any like the to session. for to Robert gentlemen, turn I concludes this ladies conference And question-and-answer final Tucker the would remarks.

Robert Tucker

on Thank call. to joining would for us like you, operator. I everyone thank today’s

free If very feel you have a questions, call. please you additional give Thank us much. to

Operator

you And conference today’s attending thank you, thank We presentation. call. for this concludes all today’s

day. disconnect now wonderful a Have may your lines. You

Assured Guaranty (AGO) 6 Nov 202020 Q3 Earnings call transcript