Assured Guaranty Ltd. Responds to Moody’s Ratings Downgrade of Assured Guaranty Corp. to Aa3 and Affirmation of Aa3 Rating of Assured Guaranty Municipal Corp.

HAMILTON, Bermuda--(BUSINESS WIRE)--In response to the downgrade by Moody’s Investors Service of the insurance financial strength rating of bond insurer Assured Guaranty Corp. (AGC) to Aa3 from Aa2 and Moody’s affirmation of the Aa3 insurance financial strength rating of Assured Guaranty Municipal Corp. (AGM), Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Ltd. (NYSE:AGO) (“the Company”), today made the following statement:

“We are pleased that AGC and AGM have both maintained Moody’s ratings in the double-A rating category, a rating that connotes significant financial strength in today’s economic environment. In assigning these ratings, Moody’s has put our insured residential mortgage exposures through a revised stress loss scenario, which is based on an extremely pessimistic view of the future performance of residential mortgage exposures. Even under Moody’s stressful scenario, the Assured companies’ combined $12.5 billion of claims-paying resources were more than sufficient to meet all projected obligations. We are committed to maintaining the highest possible ratings and plan to implement a capital plan to meet rating agency requirements to maintain double-A ratings. Moreover, these capital initiatives, which entail external reinsurance that has already been negotiated, intercompany capital support and approximately $300 million of additional capital, are to solely support rating agency capital requirements. In the absence of true capital regulation by federal or state authorities, we believe this is in the best interests of the Company.

“In its review, Moody’s noted ‘our strong risk management, which has contributed to much better performance than our peers during the financial crisis’ and ‘our very strong competitive position in the U.S. municipal market.’

“Despite the ratings uncertainty over the past few months, demand for our guaranty products has remained strong in the U.S. municipal market, as demonstrated by our previously announced third quarter 2009 U.S. public finance new issue volume. The two direct bond insurers guaranteed a total of approximately $8.7 billion in U.S. municipal new issue volume, representing 9.6% of total par issued for the third quarter 2009. Through October 2009, both companies combined have guaranteed approximately $32.0 billion in new issues, representing 9.5% of public finance new issuance. We are confident that we will continue to provide value for issuers and investors across our markets.”

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Assured Guaranty Ltd. is a publicly-traded Bermuda-based holding company. Its operating subsidiaries provide credit enhancement products to the U.S. and international public finance, structured finance and mortgage markets. More information on Assured Guaranty Ltd. and its subsidiaries can be found at www.assuredguaranty.com.

Cautionary Statement Regarding Forward-Looking Statements:

Any forward-looking statements made in this press release reflect the current views of Assured Guaranty Ltd. (together with its subsidiaries, “Assured Guaranty”) with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Assured Guaranty’s forward-looking statements could be affected by:

• rating agency action, including a ratings downgrade at any time of Assured Guaranty Ltd. or any its subsidiaries and/or of transactions insured by such subsidiaries, both of which have occurred in the past;
• developments in the world's financial and capital markets that adversely affect issuers’ payment rates, Assured Guaranty’s loss experience, its ability to cede exposure to reinsurers, its access to capital, its unrealized (losses) gains on derivative financial instruments or its investment returns;
• changes in the credit markets, segments thereof or general economic conditions;
• more severe or frequent losses affecting the adequacy of Assured Guaranty’s loss reserve;
• the impact of market volatility on the mark-to-market of its contracts written in credit default swap form;
• reduction in the amount of reinsurance facultative cessions or portfolio opportunities available to Assured Guaranty;
• decreased demand or increased competition;
• changes in applicable accounting policies or practices;
• changes in applicable laws or regulation, including insurance and tax laws;
• other governmental actions;
• difficulties with the execution of Assured Guaranty’s business strategy;
• contract cancellations;
• Assured Guaranty’s dependence on customers;
• loss of key personnel;
• adverse technological developments;
• the effects of mergers, acquisitions and divestitures;
• natural or man-made catastrophes;
• other risks and uncertainties that have not been identified at this time;
• management's response to these factors; and
• other risk factors identified in Assured Guaranty’s filings with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.