Assured Guaranty Ltd. Reports $85.5M 1Q Income

Assured Guaranty Ltd. Thursday night reported a net income of $85.5 million for the first quarter of 2009, compared to a net loss of $169.2 million in the first quarter of last year.

Assured, parent of bond insurer Assured Guaranty Corp., said the improved net-income results from an improvement of pre-tax underwriting results and an after-tax unrealized gain on credit derivatives of $39.1 million compared to an after-tax unrealized loss of $175.8 million.

Operating income rose to $63.4 million in the first quarter of 2009, compared to $6.2 million in the first quarter of 2008.

The present value of gross written premiums in U.S. public finance increased 3% in the quarter to $126.8 million. Overall gross written premiums increased to $234.8 million from $175.8 million.

Loss and loss adjustment expenses increased to $79.8 million in the first quarter of 2009 from $55.1 million in the first quarter of 2008.

In the first quarter, Assured also gained regulatory approval for its acquisition of Financial Security Assurance Holdings Ltd., which it expects to complete in the second quarter and completed its CIFG reinsurance transaction.

Fitch Ratings earlier this week downgraded Assured Guaranty to AA from AAA, leaving it with just one triple-A rating. Assured Guaranty Ltd. president and chief executive officer Dominic Frederico expressed the company’s concerns with the methodology underlying the downgrade in the statement announcing first-quarter results.

“We believe their actions were premature as the Fitch model, like those of other rating agencies, is extremely sensitive to slight changes in assumptions,” Frederico said. “In addition, Fitch expects the FSA acquisition to be capital accretive. We are experiencing a very volatile real estate and mortgage market and we believe that their analysis would benefit from more seasoning, given the wide difference between actual experience and their projections and the potential benefit of the federal government’s economic stimulus and mortgage programs.”

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER