Assured Guaranty wrapped roughly $3.4 billion of municipal bonds in the first quarter, helping its new-issue par value increase 136% from the first quarter of last year - a number that far outpaces an overall market growth of 72%.
Despite a low interest rate environment, "The first quarter provided an excellent start for 2015," said Assured's president and CEO Dominic Frederico.
"With our diversified business plan and strategy, we a have a broader market opportunity and can be thoughtful about our pricing. Where the market is right now, we returned capital. The nice thing about being a publicly owned company is that you can exchange back and forth with your shareholders as opportunities present themselves."
According to Assured's first quarter earnings, released Thursday, the company was responsible for 276 transactions last quarter, more than double of the 117 transactions they did in the same period last year. Low interest rates did not stop Assured or the bond insurance industry as a whole, as the first quarter saw total insured volume soar to $6 billion - the highest volume since the third quarter of 2010. The first quarter of 2015 also saw 16.9% of all transactions utilize insurance, the highest percentage since the second quarter of 2009.
Assured wrote a significant amount of business in the AA category, as they wrapped 19 transactions for a par amount of $521 million.
"Some of those transactions are split ratings, but it really underscores the improving value of our wrap in the market," said Bill Hogan, senior managing director of public finance at Assured.
Assured's adjusted book value per share reached an all-time high of $54.66, up from $53.66 from Dec. 31, 2014. As of March 31, 2015, the total amount of ABV was $8.4 billion. During the quarter the PVP was $36 million, a 16% increase from the first quarter of last year.
"The adjusted book value per share is our key measure of the company's intrinsic value. In U.S. public finance, where we saw the highest municipal bond insurance penetration in years, Assured Guaranty led the industry in terms of par and the number of transactions insured, and we outpaced our competitors by an even wider margin in PVP. We also saw the benefit of our diversified business strategy, with solid PVP production in structured finance," Frederico said.
On April 1, Assured completed the acquisition of Radian, which will be reflected in Assured's second quarter par outstanding and investment portfolio.
"It is a win-win situation; Radian is able to concentrate on their primary business - mortgage insurance - and we were able to buy their financial guaranty portfolio at a discount," Frederico said.
Frederico also said that as of May 4, 2015, Assured completed substantially all of the $400 million of share repurchases authorized in August 2014 and that this week, the board authorized an additional $400 million of share repurchases.
