Assured Guaranty Ltd.

Assured Guaranty reported second-quarter 2026 adjusted operating income of $55 million, or $1.23 per share, up 22% from the second quarter of last year; adjusted operating income increased from $50 million to $55 million. Loss expense declined to $4 million from $28 million year over year. In the first half of 2026, PVP was $152 million versus $103 million in the first half of 2025, a 48% increase, with U.S. public finance at $106 million and global structured finance at $35 million. The company also said it insured $9.6 billion of new issue par sold across 423 transactions in U.S. public finance, and over $10.1 billion including primary and secondary market par. For the third quarter to date, management said policies or commitments already in hand are expected to generate $42 million of PVP. Forward-looking commentary remained positive: management expects demand to continue for core products, sees attractive prospects for annuity reinsurance, and said it is off to a strong start in the third quarter.

Dominic Frederico emphasized that the first half was strong, with record shareholders’ equity, adjusted operating shareholders’ equity, and adjusted book value per share at quarter end. He highlighted growth in the annuity reinsurance platform, a 12% inception-to-date annualized IRR on alternative investments, and the company’s push to expand internationally while maintaining leadership in U.S. bond insurance. His tone was constructive and confident, but he also repeatedly stressed disciplined underwriting, risk management, and capital optimization.

Benjamin Rosenblum focused on the quarter’s operating improvement and capital deployment. He cited adjusted operating income of $55 million, or $1.23 per share, and said the improvement was driven by premium income and lower loss expense; he also noted a $19 million mark-to-market loss in alternative investments due to a CLO equity fund, reported on a one-quarter lag. On capital returns, he said the company repurchased 554,000 shares for $45 million at an average price of $80.68, paid $17 million in dividends, and ended with about $179 million of holding company liquidity, including $60 million at AGL. He also said adjusted operating shareholders’ equity per share was $129.94 and adjusted book value per share was $189.72 at quarter end.

Analysts pressed management on the CLO marks, asking whether the volatility changes the alternative investment strategy and whether the quarter-lagged losses would reverse next quarter. Management said the portfolio is diversified beyond CLOs, some marks are already reversing, and they remain comfortable with the strategy and its roughly 12% IRR. Questions also focused on capital deployment and buybacks, including the annuity reinsurance business and the soft capital facility exploration; management said Life Re could require more day-one capital if bookings accelerate, but capital allocation will remain opportunistic and depend on comparing growth returns with buybacks. On Brightline, management said the key issue is liquidity pressure, but they do not expect category 3 surveillance unless claims payments begin; they said they remain committed to the exposure and believe it has time to work itself out.