Assured Guaranty Ltd., the largest municipal bond insurer, announced a quarterly dividend of $0.1425 per common share, an increase of nearly 10% from the payout it declared on Nov. 2.
In a press release issued on Wednesday morning, Assured said it has raised the quarterly dividend for six consecutive years, bringing the total increase to 217% since November 2011. The dividend is payable on March 22, to shareholders of record at the close of business on March 8.
"Assured has a great deal of excess capital, and that amount is only increasing as the portfolios at the company's subsidiaries run off and the capital associated with the related insured exposures is freed up," said Mark Palmer, an analyst at BTIG LLC. "We don't think Assured's robust capital return is a function of the level of demand for bond insurance, and we expect the company to continue to aggressively return capital even if interest rates rise and demand for the credit enhancement it offers increases meaningfully."
Palmer also told The Bond Buyer via email that BTIG anticipates that Assured will continue to gradually increase its dividend, though it also believes the best use of the company's capital is share buybacks which remain highly accretive given the discount at which the stock trades.
Assured will hold a conference call on Friday morning at 8 a.m. eastern time to report its full year and fourth quarter financial results.
