AGO - Earnings call transcript Q1 2024

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Operator

Good morning, and welcome to the Assured Guaranty Limited First Quarter 2024 Earnings Conference Call. My name is Carla, and I will be your operator for today's call. [Operator Instructions] Please note that today's event is being recorded. I would now like to turn the conference call over to your host, Robert Tucker, Senior Managing Director, Investor Relations and Corporate Communications. Please go ahead.

Robert Tucker

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

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

the presentation. to Turning

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

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

Dominic Frederico

Thank everyone today's and you, welcome to call. joining Robert,

the the Last by that dividends our $X little note, XXXX, Exchange S&P first improved a Stock Composite adjusted over XXX These of through price the corporate our its the shareholders S&P with circumstances. increase the our occurrence Industrial financial as begin Financials, the its adjusted cumulative of of our resilience and in by through Since net of income returned bankruptcies and IPO. those XXX%, pandemic and York effects. and with global well difficult history. the end of prudence Jones and the and XXX, time, book Index. Average billion the anniversary business We we New increase operating of produced in include strategy exceeded almost month, $X many our model effectiveness as period with the increase celebrated XXXX the unerring COVID-XX high-profile let's quarter with we our So crisis, of XXth price billion, share far-reaching to the value that increased municipal our scale global XXX%. Of of share natural to disasters Dow impacts

to and those we new ratings During maintained claim-paying [indiscernible] high our at levels continue and business. resources periods,

than more and insured the and returning through buybacks dividends our our share our leverage excess and while single significant exposures, same billion Capital. $X reduced at also risk time, S&P to We shareholders maintaining

commonly and outstanding up million we year. of to X.X% investments. While which since quarter then, shares not shares of our positions repurchased alone, total level buybacks repurchased $XXX have that our And expectations reach target appropriating first for to equals May a XXXX. million share $XXX the of we this about the our time. This prevailed of do earlier XXXX. per are of In of shareholders' reserve in began year we we were We sufficient at program ramping we need bought years on sight our capital, XX% year, repurchase in that saw year, when generally in lose that returns back the for share the the for us shares their common we $XXX XXXX, the through million when outstanding excess X began

on Directors compared which of income $XXX our other last Board of an the repurchases, our quarter. Adjusted with results quarter in to in for authorized us line million year. $X.XX the quarter $X.XX first X, brings of additional in came impressive of May Additionally, target, share per first the operating share XXXX at with

basis shareholders' end non-GAAP in the was at key reached year at than on ago. Shareholders' equity also record. per higher $XXX.XX, also compared new with book quarter valuation $XX Our value share operating $XXX.XX of first of share highs with a a measures $XX $XX.XX $XXX.XX, higher, and a equity adjusted again per adjusted quarter XXXX at

quarter the Rob strong, give in details moment. in you let I'll more production business New was and a

through approach and fee-based interest our to investment strategic asset to our consistent generating our Sound expectations our Our in Sound is is Point. investments with management XX% earnings benefiting from on Point alternative returns portfolio

our net discussed, of Puerto the As Authority sole all Electric exposure. of currently is par nonpaying with million previously have $XXX exposures resolved of we which exception we Power the Rico PREPA

the PREPA, of the stronger exposures we and our and on possible, how strategies, our issuers the below we'll and just insured our approach fair claims. oppose consensually the years par protected development come different conditions planned portfolio our net far a has all When business plus constitute for optimistic extremely both process other Today, fact, served future current only our I X.X% reflect way our shareholders. I'm the but vigorously outstanding. We policyholders PREPA rest not financial perverted ever. if strategic and to legal the I year not about has that firmly the In of of believe of to investors, best come. proactive great also included continue treatment than to our but value and have are evolution for company create running of company and bond for any our use adjustment

Rob. to over call the turn I'll Now

Robert Bailenson

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

written of though production $XX insurance by of Moody's. up growth even closed double sold of which corresponding noting year, closed par XX% we of overall first investors last gross market market, PVP. insurance business to the with A category penetration sold. was of million Supported transactions par underlying continued par exceed and quarter first value in municipal its from new target in that since total as U.S. utilizing sold transactions million the XXXX unpredictable in guarantee of in volumes way rating market with S&P of has the finance financial penetration led Our PVP, generally similar. was the public quarter our the strong approximately bond for primary pandemic in the of was was quarter X% first XX% an of PVP year-over-year. Primary or number COVID-XX insurance Insurance XXXX world. It's XX% the it worth of reminded when the bond ratings and $XX sold,

of the in with insured first approximately insurance, issue par was billion par of the primary XXXX. A XX% all market leader in sold Assured municipal par than our XX% during insurance the during sold quarter XXXX. new ensuring first quarter U.S. remain Guaranty market quarter of $X.X the higher

for investor benefit on We short transactions. larger institutional insurance from guarantees demand continue to

billion, Expressway insured we system Authority of including in tardy. insured the bonds million during Colorado River more with balances for X the quarter, $X.X the par the $XXX or approximately par insured largest the totaling insured of During North the sold Carolina Triangle $XXX and insured quarter. The amounts Turnpike with million the Lower $XXX million X revenue transactions revenue transactions for

in financial risk. believe to also such investors credits proposition, par an of on We downgrade understanding exhibiting deals. a of insured XX We value in AA as and continue mitigation add strength we first quarter our value of both high are these range benefits for on potential the the during million regard including our of $XXX transactions

amount XXX-mile the century. great senior the is we and rail private strength. bright off exceeding be more half demonstrates guarantee's over representing This between Orlando investors line bonds a the second participation and rail States to start built extensive and is a the underwriting system high-speed Miami to a project senior a X value short high-speed on diligence, billion expected experience Florida's ensure May issued. The United our to transaction in due $X.X first rail will place passenger billion system financial of underlying $X.X than of quarter where close including bonds of The refinancing on in an

have guarantee municipal capacity to investment-grade bonds transaction and large-scale We experience and unrivaled infrastructure financings.

well We perform expect public to much-needed in environment our current as infrastructure to municipalities prioritize the continue business finance and development. repair

will them business during the $XX renewals continue further X their Our facilities a business other develop public an no to bond million product application first subscription various across the expanded optimize more finance executions significant made can our XX transactions Structured quarter, new lower and of product of community sectors a accomplish I they Non-U.S. financial help insurance into of applications finance our support group PVP Finance above burden. guarantee has $X exposure. and believe than Global increase additional they additional insurance from primarily financing of securitization with our million contribution from the sectors. This can growth. produced liquidity In to to so

U.S., of we to hard Kingdom call United this second of expect turn PVP, personnel I'll business opportunities. on France, to half with extend especially working we additional focused and the Spain the large a We over transactions of new in infrastructure Australia, the certain beyond broadly our now reach more in the Ben. international have pipeline transactions, year. Outside to significant and generate are

Benjamin Rosenblum

in increase. of had in This and per million adjusted $XX first $X.XX year-over-year $XXX Thank income morning. the or XX%. million in of component period you, basis, of $X.XX of report operating is and $XXX XXXX. On with a quarter largest the million first the share segment few share of Dominic, this good year. income compared same quarter to Insurance million last per a operating or Rob XXXX represents first adjusted pleased $XXX The notable am driving operating a share per quarter-over-quarter the segment and items I increase of income compared quarter XXXX with adjusted contributed the

of First, net $XX transaction. the with year, earned large last premiums to due higher refunding one were compared primarily million

on in $X the Rico million were contingent XXXX. loss instruments value first Second, a Puerto mark-to-market with $XX gains of of quarter compared million

the of a And million a our of XX, Our of Investments gain operating alternative equity the remaining periods. Fair with from investment of a and component value the cause alternative quarter equity last, compared $XX changes million gain were assets fair March in investment income have in of XXXX. as primary underlying volatility $XXX million from $XX the of XXXX. CBIs both investments first may quarter-to-quarter. value in in gains alternative was tranches of earnings adjusted CLO

the generated XX.X%. income release first included which quarter However, they a offset These internal in annualized year-over-year an of by the to were basis, in in benefit segment have XXXX. nonrecurring the increases rate other a an of partially inception-to-date Insurance return decline on of litigation a of accrual related

deferred Our which premium segment billion. credit earnings and at $X.X of the the represents future storehouse strong revenue, in Insurance derivative remained

in Asset the distribution Management XX% interest $XX received segment, was In our and partnership the Sound million was Point in from XXXX. XXXX ownership

On share. of $XX.XX we price shares million the the first of bought quarter capital XXXX, management front, at for back $XXX million average X.X an in per

We our continue is to believe that of strategies. accretive most this one

Board to remaining authorization share a $XXX million. Directors authorized of last additional brings our repurchases, As result, of current million approximately which $XXX week an our

$XXX per share In adjusted new terms for new AGL. share approximately along of adjusted per collectively resides equity and we to adjusted business $XXX. share production over with have of operating shareholders' our and of over of income operating liquidity company value which repurchase million, of records $XX The $XXX book holding position, million investments contributed and cash in program,

over of period, key both the Moody's with over the of within credit our to strong operating our financial improvement rating About of In call for these profile risk-adjusted adjusted Moody's Moody's compared AGC's term. One strong book instructions varies I'll of strategic a increased guarantee the outlook. how on initiatives, role report, metrics long financial adequacy, upgraded the income the insurance other Assured you While cited the AGM, April AGM's to and noted value strength stable leading positive turn the the in the an successful and in the position now period. sector. the rating affirmed Guaranty. the strategic significant capital in give build increases consistent market development Q&A reflect note to insured quarterly quality AGC shareholder capital execution and the to portfolio value XX, AGM, operator

Operator

question first Our KBW. Instructions] [Operator McJoynt from from Tommy comes

Thomas Mcjoynt-Griffith

The net first on line. question income the investment is

and rate averaging takes through last you run then in -- walk million, insurance been puts million forward? So the it third looks the it like decline? had that to in at segment going the think about for we that looking of some quarter year, it from second the can And dropped half $XX should what and sequentially around how $XX of drove

Benjamin Rosenblum

question. Thanks Tommy. for Sure, the

is this So Ben speaking.

you'll came we answer observing couple was you're expect had a bonds mitigation is X rate income relatively last of it the consistent through. end at last will probably think if quarter the a quarters I this look the the a from back and I of I lower, year. see is before, the quarters, you would happen would little that that some what loss what say of run throughout year,

Thomas Mcjoynt-Griffith

the Okay. the of that of with how the couple And and investees, other equity what last Got of quarters. the you -- me large then is kind negative can in it. for segment net terms remind it in of mechanically happening earnings works

what's the on think mechanically can that's some happening of remind CIBs. you But there? I offsetting just fair us value gains the

Benjamin Rosenblum

Sure.

looking way and any coming CBIs a some line of those There's of the the of the some of through looking think at consolidation. you're through on are it, the it. impact volatility coming bottom I SGA at consolidation with you're impact

Thomas Mcjoynt-Griffith

that's it Yes, looked what like.

Okay. just And last then question.

still there? there status any a update request on dividend want there's AGM. share York New think anything or for pending you special to Is in that I

Dominic Frederico

Sure.

we York of We dividend. to know, request process a filed the have expectation back issues. fall going any its New last through and in you As year approve don't is

just it's Hope them process through at we near in hear will something their the point in So time. future. going this

Operator

for the closing like concludes to conference I This host, remarks. Tucker the to session. your Instructions] Robert would [Operator over back question-and-answer turn now

Robert Tucker

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

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

Operator

This concludes for today's attending. all conference call. Thank you

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

Assured Guaranty (AGO) 8 May 242024 Q1 Earnings call transcript