Assured Guaranty Ltd.

Good morning and welcome to the Assured Guaranteed Limited Second Quarter 2023 Earnings Call. My name is Glenn and I'll be the operator for today's call. All participants will be in a listen-only mode. So you'll need assistance. You need to signal a common specialist by pressing star then zero on the telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on the telephone keypad. With joy of question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference call over to our host, Robert Tutka, Senior Managing Director, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Operator, and thank you all for joining Assured Guarantee for our second quarter 2023 Financial Results Conference Call. Today's presentation is made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The presentation may contain forward-looking statements about our new business and credit outlooks, market conditions, credit spreads, financial ratings, loss reserves, financial results, or other items that may affect our future results. These statements are subject to change due to new information or future events. Therefore, you should not place undue reliance on them as we do not undertake any obligation to publicly update or revise them except as required by law. If you're listening to a replay of this call or if you're reading the transcript of the call, please note that our statements made today may have been updated since this call. Please refer to the investor information section of our website for our most recent presentations and SEC filings, most current financial filings, and for the risk factors. This presentation also includes references to non-GAAP financial measures. We present the GAAP financial measures most directly comparable to the non-GAAP financial measures referenced in this presentation, along with a reconciliation between such GAAP and non-GAAP financial measures in our current financial supplement and equity investor presentation, which are on our website at assuredguarantee.com. Turning to the presentation, our speakers today are Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Limited, and Rob Valentin, our Chief Financial Officer. After their remarks, we will open the call to your questions. As the webcast is not enabled for Q&A, please dial into the call if you'd like to ask a question. I will now turn the call over to Dominic.

Thank you, Robert, and welcome to everyone joining today's call. At the halfway mark of 2023, Assured guarantees adjusted operating shareholders' equity per share and adjusted book value per share are at the highest levels in our history, $95.64 and $144.21, respectively. New business production for the first half remained strong, consistent with recent year's results. It was diversified across U.S. public finance, international infrastructure, and global structure finance. The first half PVP of $203 million is the second-largest amount a total first half PVP since 2009, and the second time that first half PVP exceeded $200 million during that time period. In July, we completed our transaction with SoundPoint Capital Management involving Assured IM, and separately we sold Assured Healthcare Partners. I will discuss both transactions in a few minutes. For the first half of 2023, insured share of the insured primary municipal bond market was 63%, up from 56% in the first half of 2022. We guaranteed 290 new issues totaling $9.8 billion of primary insured parcel. This part amount was fairly consistent with the first half of 2022, despite the total market bar being down by approximately 14% in the first half of 2023, compared with the first half of 2022. Our secondary market par reading for the first half of the year was $280 million, bringing our total insured par sold to $10.1 billion in the primary and secondary markets. We continue to see higher demand for bond insurance than we did before the pandemic. First half 2023 insured market penetration of 9% was higher than the 8.8% in the first half of 2022, and significantly higher than the 5.9% of 2019's first half. Total insured penetration for the second quarter was 10.1% for the highest penetration rate since 2009. Additionally, market demand for bond insurance increased significantly in the second quarter of 2023, up 72% from the first quarter of 2023. Assured guarantees saw an 86% increase in insured parts sold in the second quarter of 2023, compared to the first quarter of 2023, insuring $6.4 billion in the second quarter of 2023, 28% higher than the same period last year. In the second quarter, we also continue to benefit from institutional investor demand for our insurance as we guarantee $4 billion of PAR on 13 transactions that each utilize $100 million or more of insured guaranteed insurance. This brought the total number of such transactions during the first half of 2023 to 21 transactions for a total of $5.5 billion. International public finance produced $36 million of PVP during the first half of 2023, up from $30 million in the first half of 2022. Second quarter activity includes a guarantee on a UK regulated utility. And our pipeline of potential international public finance transactions includes a significant number of transactions that we consider likely to close later in 2023. Global structure finance direct PVP with the largest first half amount since 2009, producing $68 million of PVP. We continue to see opportunities with banks, insurance companies, pension funds, and asset-backed investor clients across sectors, including corporate and fund finance. In July, S&P reaffirmed our AA financial strength rating with stable outlook for our financial guarantee companies, citing both our very strong financial risk profile a very strong business risk profile, and its annual review of Assured Guarantee. Its report describes many strengths supporting our AA ratings, including S&P's view that we have excellent capital and earnings with a meaningful capital adequacy buffer. You can read the entire report on our website at assuredguarantee.com. In July, we completed the transaction with SoundPoint Capital Management, in which we contributed substantially all of Assured IM, and we engaged them as the sole alternative credit manager for AGM and AGC, in return for a 30% interest in the combined entity. As we have said, we are highly optimistic about this new venture with SoundPoint Capital Management, and believe it will be immediately accreted to our bottom line. In July, Assured Guarantee sold all of its equity interests in Assured Healthcare Partners, LLC. Assured Guarantee will remain a strategic investor concern AHP managed funds while retaining its carried interest in existing AHP managed funds and has received other consideration. Regarding the Puerto Rico Electric Power Authority, PREPA, is our last remaining non-paying Puerto Rico exposure. As we have said all along, we remain committed to negotiating a fair and reasonable settlement that will protect and enforce our legal rights as bondholders through litigation and the Title III plan confirmation and appeal process as necessary. Given the uncertainty in this global economic environment, it's good to reflect on the proven resiliency of our company. In the first year of the pandemic, we saw investor appetite for bond insurance increase. That heightened interest has been maintained in development so far this year, continue to remind investors that the future is often volatile. We have succeeded through decades of economic cycles by delivering on our own commitments to reduce borrowing costs for issuers and protecting against shortfalls in investors' principal and interest payments, while proving our resilience for discipline, risk management, and responsible stewardship of capital. This resilience has positioned us to thrive as business and marketing conditions are creating more incentives for the use of financial guarantees. We believe that we have never been better prepared to serve our clients, protect our policy owners, and create value for our shareholders. I'll now turn the call over to Rob.