ASSURED GUARANTY LTD

The Company’s principal objectives in managing its investment portfolio are to support the highest possible ratings for each operating company, manage investment risk within the context of the underlying portfolio of insurance risk, maintain sufficient liquidity to cover unexpected stress in the insurance portfolio and maximize after-tax net investment income. As of December 31, 2024, the Company had $7,590 million of available-for-sale fixed-maturity and short-term investments, of which

$5,452 million were managed by three investment managers who are required to, in accordance with the Company’s investment guidelines, maintain their portion of the Company’s investment portfolio with an overall credit quality rated at a minimum of A+/A1/A+ by S&P/Moody’s/Fitch Ratings Inc. In addition, $277 million of available-for-sale fixed-maturity securities were CLO equity tranches managed by Sound Point.

Changes in interest rates affect the value of the Company’s fixed-maturity securities. As interest rates fall, the fair value of fixed-maturity securities generally increases, and as interest rates rise, the fair value of fixed-maturity securities generally decreases. The Company’s portfolio of fixed-maturity securities primarily consists of investment-grade, liquid instruments. Other invested assets include other alternative investments, which are generally less liquid. For more information about the investment portfolio and a detailed description of the Company’s valuation of investments, see Item 8, Financial Statements and Supplementary Data, Note 7, Investments and Cash, and Note 9, Fair Value Measurement.

Carrying Value

(1) Includes primarily CVIs received under the 2022 Puerto Rico Resolutions, which are not rated.

(2) Excludes investments in Sound Point funds that are consolidated. See Item 8, Financial Statements and Supplementary Data, Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

The Company’s available-for-sale fixed-maturity securities had a duration of 4.3 years as of December 31, 2024 and 3.9 years as of December 31, 2023, respectively.

Available-for-Sale Fixed-Maturity Securities By Rating

The following table summarizes the ratings distributions of the Company’s available-for-sale fixed-maturity securities as of December 31, 2024 and December 31, 2023. Ratings generally reflect the lower of Moody’s and S&P classifications, except for (i) Loss Mitigation Securities, which use Assured Guaranty’s internal ratings classifications, rated BIG, and (ii) CLO equity tranches, which are not rated. See Item 8, Financial Statements and Supplementary Data, Note 7, Investments and Cash, for additional information.

Distribution of Available-for-Sale Fixed-Maturity Securities by Rating

Portfolio of Obligations of State and Political Subdivisions

The Company’s fixed-maturity available-for-sale securities include issuances by a wide number of municipal authorities across the U.S. and its territories. The following table presents the components of the Company’s $1,940 million (fair value) of obligations of state and political subdivisions included in the Company’s available-for-sale fixed-maturity securities investment portfolio as of December 31, 2024.

Fair Value of Available-for-Sale Fixed-Maturity Securities Investment Portfolio

of Obligations of State and Political Subdivisions

As of December 31, 2024 (1)

(1) Excludes $116 million as of December 31, 2024 of pre-refunded bonds, at fair value.

The revenue bond portfolio primarily consists of essential service revenue bonds issued by transportation authorities, utilities and universities.

Revenue Bonds

Sources of Funds

Other Investments

Other invested assets, which are generally less liquid than fixed-maturity securities, primarily consist of the ownership interest in Sound Point and alternative investments across a variety of strategies.

The Insurance segment reports the Company’s percentage ownership of Sound Point funds and AHP funds as equity method investments with changes in NAV included in the Insurance segment adjusted operating income. As of December 31, 2024, one active fund in which the Company invests was accounted for as a CIV and the remaining are accounted as equity method investments in the Company’s consolidated financial statements. See “— Commitments” below.

Ownership Interest in Sound Point and Alternative Investments

(1) Include CLO equity tranches distributed from the CLO fund in the fourth quarter of 2024.

Ownership Interest in Sound Point and Alternative Investments

Income from Ownership Interest in Sound Point and Alternative Investments

(1) Includes CLO equity tranches distributed from the CLO fund in the fourth quarter of 2024.

Income from Ownership Interest in Sound Point and Alternative Investments

Income from Alternative Investments

Beginning in the third quarter of 2023, the Company records an equity method ownership interest in Sound Point pursuant to the Sound Point Transaction described in Item 8, Financial Statements and Supplementary Data, Note 1, Business and Basis of Presentation.

Commitments

The Company has agreed to invest an aggregate amount of $1.5 billion in alternative investments, including $1 billion in Sound Point managed investments. Unfunded commitments for alternative investments as of December 31, 2024 were $610 million. See Part II, Item 8, Financial Statements and Supplementary Data, Note 1, Business and Basis of Presentation, for a description of the Sound Point Transaction.

Restricted Assets

Based on fair value, fixed-maturity securities, short-term investments and cash that are either held in trust for the benefit of third-party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements, or otherwise pledged or restricted, totaled $79 million and $234 million as of December 31, 2024 and December 31, 2023, respectively. The investment portfolio also contains securities that are held in trust by certain AGL subsidiaries or otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements with a fair value of $1,135 million and $1,154 million as of December 31, 2024 and December 31, 2023, respectively.