ASSURED GUARANTY LTD

Previous wording

(i) significant changes in inflation, interest rates, the world’s credit markets or segments thereof, credit spreads, foreign exchange rates, tariff regimes or general economic conditions, including the possibility of a recession or stagflation; (ii) geopolitical risk, terrorism and political violence risk, including those arising out of Russia’s invasion of Ukraine and intentional or accidental escalation between The North Atlantic Treaty Organization and Russia, conflict in the Middle East, confrontation over Iran’s nuclear program, the polarized political environment in the United States (U.S.), and strategic competition and tensions between the U.S. and China; (iii) cybersecurity risk and the impacts of artificial intelligence, machine learning and other technological advances, including potentially increasing the risks of malicious cyber attacks, dissemination of misinformation, and disruption of markets, including the markets in which the Company participates; (iv) the possibility of a U.S. government shutdown, payment defaults on the debt of the U.S. government or instruments issued, insured or guaranteed by related institutions, agencies or instrumentalities, and downgrades to their credit ratings; (v) developments in the world’s financial and capital markets, including stresses in the financial condition of banking institutions in the U.S. and the possibility that increasing participation of unregulated financial institutions in these markets results in losses or lower valuations of assets, reduced liquidity and credit and/or contraction of these markets, that adversely affect repayment rates of insured obligors, Assured Guaranty’s insurance loss or recovery experience, or investments of Assured Guaranty; (vi) reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty’s insurance; (vii) the possibility that budget or pension shortfalls, difficulties in obtaining additional financing, changes in applicable laws or regulations or other factors will result in credit losses or liquidity claims on obligations of state, territorial and local governments, their related authorities, public corporations and other obligors that Assured Guaranty insures or reinsures; (viii) insured losses, including losses with respect to related legal proceedings, in excess of those expected by Assured Guaranty or the failure of Assured Guaranty to realize loss recoveries that are assumed in its expected loss estimates for insurance exposures, including below-investment-grade (BIG) healthcare, United Kingdom (U.K.) regulated utility, European renewable energy, and Puerto Rico Electric Power Authority (PREPA) exposures; (ix) the impact of Assured Guaranty satisfying its obligations under insurance policies with respect to legacy insured Puerto Rico bonds; (x) the possibility that underwriting insurance in new jurisdictions and/or covering new sectors or classes of business does not result in the benefits anticipated or su…

Excerpt shortened here; the source contains the full paragraph.

Current wording

(i) significant changes in inflation, interest rates, the world’s credit markets or segments thereof, credit spreads, foreign exchange rates, tariff regimes or general economic conditions, including the possibility of a recession or stagflation; (ii) geopolitical risk, terrorism and political violence risk, including those arising out of Russia’s invasion of Ukraine and intentional or accidental escalation between The North Atlantic Treaty Organization and Russia, conflict in the Middle East, confrontation over Iran’s nuclear program, the polarized political environment in the United States (U.S.), and strategic competition and tensions between the U.S. and China; (iii) cybersecurity risk and the impacts of artificial intelligence, machine learning and other technological advances, including potentially increasing the risks of malicious cyber attacks, dissemination of misinformation, and disruption of markets, including the markets in which the Company participates; (iv) the impact of a U.S. government shutdown and/or the possibility of payment defaults on the debt of the U.S. government or instruments issued, insured or guaranteed by related institutions, agencies or instrumentalities, and downgrades to their credit ratings; (v) developments in the world’s financial and capital markets, including stresses in the financial condition of banking institutions in the U.S. and the possibility that increasing participation of unregulated financial institutions in these markets results in losses or lower valuations of assets, reduced liquidity and credit and/or contraction of these markets, that adversely affect repayment rates of insured obligors, Assured Guaranty’s insurance loss or recovery experience, or investments of Assured Guaranty; (vi) reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty’s insurance; (vii) the possibility that investments made by Assured Guaranty for its investment portfolio, including alternative investments, do not result in the benefits anticipated or subject Assured Guaranty to reduced liquidity at a time it requires liquidity, or to other negative or unanticipated consequences; (viii) the possibility that Assured Guaranty’s mergers, acquisitions, divestitures and other strategic transactions, including the transactions with Sound Point Capital Management, LP (Sound Point, LP) and certain of its investment management affiliates (together with Sound Point, LP, Sound Point) and/or Assured Healthcare Partners LLC (AHP), do not result in the benefits anticipated and/or subject Assured Guaranty to negative consequences; (ix) the inability to control the business, management or policies of entities in which Assured Guaranty holds a minority interest; (x) the impact of market volatility on the fair value of Assured Guaranty’s assets and liabilities subject to mark-to-market, including certain of its investments, contracts accounted for as derivatives, its committed capital securit…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

On April 2, 2025, the U.S. government announced a “reciprocal tariff” strategy entailing extensive global tariff increases, with the objective of rectifying trade practices that contribute to large and persistent annual U.S. goods trade deficits. The announcement of global tariffs disrupted international trade, sent shocks through the global economy, and heightened volatility in the financial markets. The U.S. subsequently postponed newly announced reciprocal tariffs to August 7, 2025. As of August 7, 2025, the U.S. has reached agreements with several countries while lifting its pause on “reciprocal tariffs” for other countries as significant uncertainty remains. U.S. tariffs can add to inflation, and the Company believes that ongoing uncertainty may increase volatility in U.S. equities and other risk assets, curb corporate capital and consumer spending and raise the risk of recession. Market volatility and the risk of recession may impact the Company in different ways. The Company believes that a recession may make it more likely that obligors whose obligations it guarantees will default. However, market volatility may also cause credit spreads to widen as investors seek security, which tends to create new business opportunities for the Company.

Current wording

On April 2, 2025, the U.S. government announced a “reciprocal tariff” strategy under the authority of the International Emergency Economic Powers Act (IEEPA) entailing extensive global tariff increases, with the objective of rectifying trade practices that contribute to large and persistent annual U.S. goods trade deficits. The announcement of global tariffs disrupted international trade, sent shocks through the global economy, and heightened volatility in the financial markets. The U.S. subsequently postponed newly announced reciprocal tariffs, which took effect on August 7, 2025, as significant uncertainty remains. On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit ruled that the U.S. government had exceeded its authority under the IEEPA but permitted the tariffs to remain in effect to provide time for the government to appeal. The U.S. Supreme Court granted certiorari on September 9, 2025, and heard oral arguments on the case on November 5, 2025; as of November 6, 2025, a decision is pending. U.S. tariffs can add to inflation, and the Company believes that ongoing uncertainty may increase volatility in U.S. equities and other risk assets, curb corporate capital and consumer spending and raise the risk of recession. Market volatility and the risk of recession may impact the Company in different ways. The Company believes that a recession may make it more likely that obligors whose obligations it guarantees will default. However, market volatility may also cause credit spreads to widen as investors seek security, which tends to create new business opportunities for the Company.

Previous wording

At the end of June 2025, the U.S. unemployment rate, seasonally adjusted, stood at 4.1%, the same as where it started the year. According to the second quarter 2025 advance estimate released by the U.S. Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 3.0% in second quarter 2025, compared to a real GDP decrease of 0.5% in the first quarter of 2025.

Current wording

At the end of August 2025, the latest published data available, the U.S. unemployment rate, seasonally adjusted, stood at 4.3%, higher than the 4.1% where it started the year. As of November 6, 2025, the U.S. Bureau of Economic Analysis (BEA) had not released the three-month period ended September 30, 2025 (third quarter 2025) gross domestic product (GDP) estimate due to the 2025 U.S. federal government shutdown. According to the BEA’s third estimate of second quarter 2025 GDP, the latest BEA data available, GDP increased at an annual rate of 3.8%, compared to a real GDP decrease of 0.6% in the first quarter of 2025.

Previous wording

According to the U.S. Bureau of Labor Statistics, the inflation rate in the U.S. before seasonal adjustment for the 12-month period ending June 2025, as measured by the Consumer Price Index for All Urban Consumers, was 2.7%, as compared to 3.0% for the 12-month period ending June 2024. According to the U.K. Office for National Statistics, the Consumer Prices Index including owner occupiers’ housing costs rose 4.1% for the 12 months through June 2025, as compared to 2.8% for the 12 months through June 2024. The Company believes that higher inflation may put pressure on the budgets of obligors whose obligations it guarantees and make defaults more likely. In addition, consumer price inflation in the U.K. increases reported net par outstanding for certain U.K. exposures with approximately $25.8 billion of net par outstanding as of June 30, 2025, and also increases projected future installment premiums on the portion of such exposure that pays at least a portion of the premium on an installment basis over the term of the exposure.

Current wording

According to the U.S. Bureau of Labor Statistics, the inflation rate in the U.S. before seasonal adjustment for the 12-month period ending September 2025, as measured by the Consumer Price Index for All Urban Consumers, was 3.0%, as compared to 2.4% for the 12-month period ending September 2024. According to the U.K. Office for National Statistics, the Consumer Prices Index including owner occupiers’ housing costs rose 4.1% for the 12 months through September 2025, as compared to 2.6% for the 12 months through September 2024. Generally, inflation reduces the real value of money over time. For obligors whose payments the Company insures, inflation can mean that the real value of their fixed debt payments decreases, potentially making it relatively easier for obligors to service these fixed-rate debts and less likely for them to default. However, if inflation increases operating expenses and revenues or incomes do not keep pace, obligors may find it more difficult to make their payment obligations, even if nominal debt payments remain unchanged. Higher inflation can also lead to tighter monetary policies, which are actions taken by sovereign central banks to reduce the amount of money circulating in the economy, including raising interest rates, which can make refinancing or servicing debt more difficult. In addition, consumer price inflation in the U.K. affects reported net par outstanding for certain U.K. exposures with $25.1 billion of net par outstanding as of September 30, 2025, and also affects projected future installment premiums on the portion of such exposure that pays at least a portion of the premium on an installment basis over the term of the exposure.

Previous wording

At its September 17-18, 2024 meeting, the Federal Open Market Committee (FOMC) decided to lower the federal funds rate, which was a reversal of the rate increases it had initiated in March 2022 to combat inflation. The federal funds rate is the rate at which banks lend to and borrow from each other, is the benchmark for most interest rates, and tends to influence mortgage rates. As the federal funds rate decreases, interest rates, including mortgage rates, tend to decrease. From September 2024 through December 2024, the FOMC lowered the federal funds rate from a target range of 5.25% to 5.50% to a range of 4.25% to 4.50%. At the FOMC’s first five meetings of 2025, including most recently at its July 29-30, 2025 meeting, it held the federal funds rate at a range of 4.25% to 4.50%, stating that it seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the FOMC has indicated it will carefully assess incoming data, the evolving outlook, and the balance of risks. These assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Current wording

At its September 2024 meeting, the Federal Open Market Committee (FOMC) decided to lower the federal funds rate, which was a reversal of the rate increases it had initiated in March 2022 to combat inflation. The federal funds rate is the rate at which banks lend to and borrow from each other, is the benchmark for most interest rates, and tends to influence mortgage rates. As the federal funds rate decreases, interest rates, including mortgage rates, tend to decrease. From September 2024 through December 2024, the FOMC lowered the federal funds rate from a target range of 5.25% to 5.50% to a range of 4.25% to 4.50%. At the FOMC’s first five meetings of 2025, it held the federal funds rate at a target range of 4.25% to 4.50%, before deciding at its September 2025 meeting to further lower the federal funds rate to a target range of 4.00% to 4.25%, stating that it is strongly committed to maximum employment and returning inflation to its 2% objective. Most recently, at its October 2025 meeting, the FOMC lowered the federal funds rate to a target range of 3.75% to 4.00%. In considering additional adjustments to the target range for the federal funds rate, the FOMC has indicated it will carefully assess incoming data, the evolving outlook, and the balance of risks. These assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Previous wording

The level and direction of change of interest rates and credit spreads impact the Company in numerous ways. On the one hand, lower interest rates may increase the fair value of fixed-maturity securities currently held in the Company’s investment portfolio, encourage municipal bond issuance and positively impact the finances of some of the obligors whose payments the Company insures. On the other hand, lower interest rates may decrease the base on which the Company charges up-front premium on most new U.S. municipal bond transactions and may also decrease amounts the Company can earn on fixed maturity securities newly acquired for its investment portfolio. Lower interest rates also are often accompanied by narrower credit spreads, which may also decrease the level of premiums the Company can charge for those products.

Current wording

The level and direction of change of interest rates and credit spreads impact the Company in numerous ways. On the one hand, lower interest rates may increase the fair value of fixed-maturity securities currently held in the Company’s investment portfolio, encourage municipal and infrastructure bond issuance and positively impact the finances of some of the obligors whose payments the Company insures. On the other hand, lower interest rates may decrease the base on which the Company charges up-front premium on most new municipal and infrastructure bond transactions and may also decrease amounts the Company can earn on fixed-maturity securities newly acquired for its investment portfolio. Lower interest rates also are often accompanied by narrower credit spreads, which may also decrease the level of premiums the Company can charge for transactions.

Previous wording

Meanwhile, the difference, or credit spread, between the 30-year BBB-rated general obligation relative to the 30-year AAA MMD averaged 90 basis points (bps) for the quarter ended June 2025, which is the same as the 90 bps average for the quarter ended March 2025 and the quarter ended June 2024. The Company believes that wider spreads could permit it to increase its premium rates on new business.

Current wording

The 30-year AAA Municipal Market Data (MMD) rate is a measure of interest rates in the Company’s largest financial guaranty insurance market, U.S. public finance. The MMD rate averaged 4.52% for the quarter ended September 2025, higher than the 4.47% average for the quarter ended June 2025 and higher than the 3.60% average for the quarter ended September 2024. Meanwhile, the difference, or credit spread, between the 30-year BBB-rated general obligation relative to the 30-year AAA MMD averaged 90 basis points (bps) for the quarter ended September 2025, which is the same as the 90 bps average for the quarter ended June 2025 and the quarter ended September 2024. The Company believes that wider spreads could permit it to increase its premium rates on new business.

Previous wording

According to Freddie Mac, the 30-year fixed-rate mortgage rate averaged 6.77% for the week ending June 26, 2025, lower than the 30-year mortgage rate average of 6.86% from one year ago. The Company believes that restricted housing inventory continues to influence home prices where demand outpaces supply. Higher housing prices may benefit distressed residential mortgage-backed securities (RMBS) the Company insures. The National Association of Realtors reported that there was no change in year-over-year existing-home sales from June 2024 to June 2025, and that the median existing-home sales price increased from June 2024 ($426,900) to June 2025 ($435,300), a 2% increase.

Current wording

According to Freddie Mac, the 30-year fixed-rate mortgage rate averaged 6.30% for the week ending September 25, 2025, higher than the 30-year mortgage rate average of 6.08% from one year ago. The National Association of Realtors reported that there was a 4.1% increase in year-over-year existing-home sales from September 2024 to September 2025, and that the median existing-home sales price increased 2.1% from September 2024 ($406,700) to September 2025 ($415,200). Higher housing prices may benefit distressed residential mortgage-backed securities (RMBS) the Company insures.

Previous wording

The Company seeks to grow the insurance business through new business production in established sectors and jurisdictions and by entering into new markets and classes of business. The Company also furthers its insurance strategy by mitigating losses in its insured portfolio.

Current wording

The Company seeks to grow the insurance business through new business production in established sectors and jurisdictions and by entering into new markets and lines and classes of business. The Company also furthers its insurance strategy by mitigating losses in its insured portfolio.

Previous wording

In certain segments of the non-U.S. infrastructure and global structured finance markets, the Company believes its financial guaranty product is competitive with other financing options. In the infrastructure market, the Company's financial guaranty can enhance the insured obligation's rating, lower the cost of long-term funding, and enhance the liquidity and transferability of debt obligations. Certain investors may receive advantageous capital requirement treatment with the addition of the Company’s financial guaranty. The Company considers its involvement in both infrastructure and structured finance transactions to be beneficial because such transactions diversify both the Company’s business opportunities and its risk profile beyond U.S. public finance. The timing of new business production in the infrastructure and structured finance sectors is influenced by typically long lead times and therefore may vary from period to period.

Current wording

In certain segments of the non-U.S. infrastructure and global structured finance markets, the Company believes its financial guaranty product is competitive with other financing options. In the infrastructure market, the Company's financial guaranty can enhance the insured obligation's rating, lower the cost of long-term funding, and enhance the liquidity and transferability of debt obligations. Certain investors may receive advantageous capital requirement treatment with the addition of the Company’s financial guaranty. The Company considers its involvement in both infrastructure and structured finance transactions to be beneficial because such transactions diversify both the Company’s business opportunities and its risk profile beyond U.S. public finance. The timing of new business production in the infrastructure and structured finance sectors is influenced by typically long lead times and therefore production may vary from period to period.

Previous wording

The Company seeks to expand its financial guaranty business geographically by entering new markets; in 2024, the Company opened new offices in Australia and Singapore. The Company also intends to broaden its insurance lines of business, including recent efforts to pursue opportunities with subscription finance facilities, specialty insurance products with risk profiles similar to structured finance exposures offered in financial guaranty form, and life and annuity reinsurance.

Current wording

The Company seeks to expand its financial guaranty business geographically by entering new markets; in 2024, the Company opened new offices in Australia and Singapore. The Company has recently undertaken, and continues to undertake, several initiatives to broaden its insurance lines, classes of business, and improve the efficiency of its secondary market execution. For example, the Company has expanded its structured finance new business production with guaranties of subscription finance facilities and specialty insurance products executed in non-financial guaranty form. In addition, the Company is pursuing life and annuity reinsurance business strategies through organic and/or inorganic growth opportunities.

Previous wording

On August 1, 2024, the Company reorganized its U.S. corporate structure and Assured Guaranty Municipal Inc. (AGM) merged with and into Assured Guaranty Inc. (AG, formerly known as Assured Guaranty Corp.), with AG as the surviving company. Upon the merger all liabilities of AGM, including insurance policies issued or assumed by AGM, became obligations of AG.

Current wording

On August 1, 2024, the Company reorganized its U.S. corporate structure and Assured Guaranty Municipal Corp. (AGM) merged with and into Assured Guaranty Inc. (AG, formerly known as Assured Guaranty Corp.), with AG as the surviving company. Upon the merger all liabilities of AGM, including insurance policies issued or assumed by AGM, became obligations of AG.

Previous wording

The Company will also, where appropriate, participate in litigation to enforce or defend its rights. For example, the Company initiated a number of legal actions to enforce its rights with respect to obligations of the Commonwealth of Puerto Rico and various obligations of its related authorities and public corporations. In addition, the Company successfully defended claims brought by Lehman Brothers International (Europe) (in administration) (LBIE) and prevailed in its counterclaim against LBIE; following the exhaustion of LBIE’s appeals, the Company recognized a realized gain on credit derivatives in the first quarter of 2025 of $103 million, which represents the full satisfaction of the judgment it was awarded and its claims for attorneys’ fees, expenses and interest in connection with this litigation. See Item 1, Financial Statements, Note 6, Contracts Accounted for as Credit Derivatives, for additional information. Also, in July 2025, the Company’s largest Loss Mitigation Security with a carrying value of $408 million as of June 30, 2025 reached its final resolution after many years of negotiation and was paid down after liquidation of the trust assets.

Current wording

The Company will also, where appropriate, participate in litigation to enforce or defend its rights. For example, the Company initiated a number of legal actions to enforce its rights with respect to obligations of the Commonwealth of Puerto Rico and various obligations of its related authorities and public corporations. In addition, the Company successfully defended claims brought by Lehman Brothers International (Europe) (in administration) (LBIE) and prevailed in its counterclaim against LBIE; following the exhaustion of LBIE’s appeals, the Company recognized a realized gain on credit derivatives in the first quarter of 2025 of $103 million, which represents the full satisfaction of the judgment it was awarded and its claims for attorneys’ fees, expenses and interest in connection with this litigation. See Item 1, Financial Statements, Note 6, Contracts Accounted for as Credit Derivatives, for additional information.

Previous wording

The Company may also purchase attractively priced obligations, including BIG obligations, that it has insured and for which it had expected losses to be paid, in order to mitigate the economic effect of insured losses (Loss Mitigation Securities). The fair value of Loss Mitigation Securities as of June 30, 2025 (excluding the value of the Company’s insurance) was $503 million.

Current wording

The Company may also purchase attractively priced obligations, including BIG obligations, that it has insured and for which it had expected losses to be paid, in order to mitigate the economic effect of insured losses (Loss Mitigation Securities). The fair value of Loss Mitigation Securities as of September 30, 2025 (excluding the value of the Company’s insurance) was $140 million.

Previous wording

The Company participates in the asset management business through its ownership interest in Sound Point, and no longer directly manages investments for third parties. The Company’s ownership interest in Sound Point furthers its strategy of participating in a fee-based earnings stream independent of the risk-based premiums generated by its financial guaranty business. The Sound Point business was strengthened by the addition of assets under management (AUM) transitioned from the Company (excluding AUM relating to AHP). See Item 1, Financial Statements, Note 1, Business and Basis of Presentation, for a description of the Company’s participation in the asset management business through its ownership interest in Sound Point.

Current wording

The Company participates in the asset management business through its ownership interest in Sound Point, and no longer directly manages investments for third parties. The Company’s ownership interest in Sound Point furthers its strategy of participating in a fee-based earnings stream independent of the risk-based premiums generated by its financial guaranty business. The Sound Point business was strengthened by the addition of assets under management (AUM) transitioned from the

Previous wording

From 2013 through August 6, 2025, the Company has repurchased 154 million common shares for approximately $5.7 billion, representing approximately 79% of the total shares outstanding at the beginning of the repurchase program in 2013. On August 6, 2025 the Board authorized the repurchase of an additional $300 million of the Company’s common shares. As of August 6, 2025, the remaining amount the Company was authorized to purchase was approximately $356 million of its common shares. Shares may be repurchased from time to time in the open market or in privately negotiated transactions. The timing, form and amount of the share repurchases under the program are at the discretion of management and will depend on a variety of factors, including funds available at the parent company, other potential uses for such funds, market conditions, the Company’s capital position, legal requirements and other factors. The repurchase program may be modified, extended or terminated by the Board at any time and it does not have an expiration date. See Item 1, Financial Statements, Note 12, Shareholders’ Equity, for additional information about the Company’s repurchases of its common shares.

Current wording

From 2013 through November 5, 2025, the Company has repurchased 155 million common shares for $5.8 billion, representing 80% of the total shares outstanding at the beginning of the repurchase program in 2013. On August 6, 2025 and November 5, 2025, the Board authorized the repurchase of an additional $300 million and $100 million, respectively, of the Company’s common shares. As of November 5, 2025, the remaining amount the Company was authorized to purchase was $332 million of its common shares. Shares may be repurchased from time to time in the open market or in privately negotiated transactions. The timing, form and amount of the share repurchases under the program are at the discretion of management and will depend on a variety of factors, including funds available at the parent company, other potential uses for such funds, market conditions, the Company’s capital position, legal requirements and other factors. The repurchase program may be modified, extended or terminated by the Board at any time and it does not have an expiration date. See Item 1, Financial Statements, Note 12, Shareholders’ Equity, for additional information about the Company’s repurchases of its common shares.

Previous wording

As of June 30, 2025, the estimated accretive effect of the cumulative repurchases of common shares since the beginning of 2013 was approximately: $61.77 per share in shareholders’ equity attributable to AGL, $64.07 per share in adjusted operating shareholders’ equity and $107.29 per share in adjusted book value (ABV).

Current wording

As of September 30, 2025, the estimated accretive effect of the cumulative repurchases of common shares since the beginning of 2013 was approximately: $65.18 per share in shareholders’ equity attributable to AGL, $66.70 per share in adjusted operating shareholders’ equity and $111.42 per share in adjusted book value (ABV).

Previous wording

Over the last several years, the Company has received approval from its insurance regulators to redeem a portion of its insurance subsidiaries’ stock and pay extraordinary dividends from its insurance subsidiaries. Most recently, AG received approval from the Maryland Insurance Administration (MIA) to redeem shares of its common stock held by its parent for $250 million, and expects to redeem such shares in exchange for cash and alternative investments in the third quarter of 2025. During 2024, in connection with the merger of AGM with and into AG, the U.S. insurance subsidiaries distributed, in aggregate, $400 million in cash and investments to the Assured Guaranty US Holdings Inc. (AGUS) and Assured Guaranty Municipal Holdings Inc. (AGMH) (the U.S. Holding Companies). See “Merger of the U.S. Insurance Subsidiaries” above for a description of the merger of AGM with and into AG.

Current wording

Over the last several years, the Company has received approval from its insurance regulators to redeem a portion of its insurance subsidiaries’ stock and pay extraordinary dividends from its insurance subsidiaries. Most recently, in third quarter 2025, after receiving approval from the Maryland Insurance Administration (MIA), AG redeemed $250 million of its common stock from AGMH in exchange for $213 million in cash and $37 million in alternative investments. During 2024, in connection with the merger of AGM with and into AG, the U.S. insurance subsidiaries distributed, in aggregate, $400 million in cash and investments to Assured Guaranty US Holdings Inc. (AGUS) and Assured Guaranty Municipal Holdings Inc. (AGMH) (the U.S. Holding Companies). See “Merger of the U.S. Insurance Subsidiaries” above for a description of the merger of AGM with and into AG.

Previous wording

Net income attributable to AGL for second quarter 2025 was higher compared with the three-month period ended June 30, 2024 (second quarter 2024) primarily due to foreign exchange gains on remeasurement of $79 million in second quarter 2025, offset in part by a loss and LAE in second quarter 2025 of $28 million, compared with benefit of $2 million in second quarter 2024.

Current wording

Net income attributable to AGL for third quarter 2025 was lower compared with the three-month period ended September 30, 2024 (third quarter 2024) primarily due to foreign exchange losses on remeasurement of $23 million in third quarter 2025 compared with foreign exchange gains on remeasurement of $55 million in third quarter 2024, and lower loss and LAE benefit in third quarter 2025.

Previous wording

Net income attributable to AGL for six months 2025 was higher compared with six months 2024 primarily due to:

Current wording

Net income attributable to AGL for nine months 2025 was higher compared with nine months 2024 primarily due to:

Previous wording

•a fair value gain on credit derivatives related to the resolution of the LBIE litigation of $103 million in six months 2025, and

Current wording

•a fair value gain on credit derivatives related to the resolution of the LBIE litigation of $103 million in nine months 2025,

Previous wording

•foreign exchange gains on remeasurement of $116 million in six months 2025, compared with losses of $12 million in six months 2024,

Current wording

•foreign exchange gains on remeasurement of $93 million in nine months 2025, compared with of $43 million in nine months 2024,

Previous wording

•higher equity in earnings of investees in six months 2025, primarily generated by the Company’s investments in Sound Point, healthcare funds and legacy alternative investments.

Current wording

•higher equity in earnings of investees in nine months 2025, primarily generated by the Company’s investments in Sound Point, healthcare funds and legacy alternative investments, and

Previous wording

•a loss and LAE in six months 2025 of $68 million, compared with a benefit of $3 million in six months 2024,

Current wording

•a loss and LAE in nine months 2025 of $38 million, compared with a benefit of $54 million in nine months 2024,

Previous wording

•lower fair value gains on trading securities, which primarily consists of Puerto Rico CVIs, in six months 2025,

Current wording

•lower fair value gains on trading securities, which primarily consist of Puerto Rico contingent value instruments (CVIs) in nine months 2025,

Previous wording

•net realized investment losses in six months 2025 primarily due to a change in the allowance for credit losses for Loss Mitigation Securities and realized losses on sales of securities, compared with gains in six months 2024, and

Current wording

•net realized investment losses in nine months 2025 primarily due to changes in the allowance for credit losses for alternative investments and Loss Mitigation Securities and realized losses on sales of securities, and

Previous wording

•lower net earned premiums in six months 2025, compared with six months 2024 due to lower refundings of financial guaranty insurance exposures.

Current wording

•lower net earned premiums in nine months 2025, compared with nine months 2024 due to lower refundings of financial guaranty insurance exposures.

Previous wording

The Company’s effective tax rate reflects the proportion of income recognized by each of the Company’s operating subsidiaries, with U.S. subsidiaries generally taxed at the U.S. marginal corporate income tax rate of 21%, U.K. subsidiaries taxed at the U.K. marginal corporate tax rate of 25%, the French subsidiary taxed at the French marginal corporate tax rate of 25%, and Assured Guaranty Re Ltd. (AG Re) and Cedar Personnel Ltd. taxed at the Bermuda marginal corporate tax rate of 15% starting January 1, 2025 and 0% for 2024. See Item 1, Financial Statements, Note 10, Income Taxes.

Current wording

The Company’s effective tax rate reflects the proportion of income recognized by each of the Company’s operating subsidiaries in the jurisdiction in which they are taxed, with U.S. subsidiaries and foreign subsidiaries that have made an election to be a U.S. taxpayer generally taxed at the U.S. marginal corporate income tax rate of 21%, U.K. subsidiaries taxed at the U.K. marginal corporate tax rate of 25%, the French subsidiary taxed at the French marginal corporate tax rate of 25%, and Assured Guaranty Re Ltd. (AG Re) and Cedar Personnel Ltd. taxed at the Bermuda marginal corporate tax rate of 15% starting January 1, 2025 and 0% for 2024. See Item 1, Financial Statements, Note 10, Income Taxes.

Previous wording

Adjusted operating income in second quarter 2025 was $50 million, compared with $80 million in second quarter 2024. The decrease was primarily due to higher loss expense in U.S. and non-U.S. public finance sectors and lower unrealized gains on the trading portfolio in second quarter 2025, partially offset by certain one-time gains related to a loss mitigation effort. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Current wording

Adjusted operating income in third quarter 2025 was $124 million, compared with $130 million in third quarter 2024. The decrease was primarily due to a lower benefit in loss expense for U.S. RMBS sector in third quarter 2025, partially offset by higher income from investment portfolio. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Previous wording

Adjusted operating income in six months 2025 was $212 million, compared with $193 million in six months 2024. The increase was primarily due to the gain related to the resolution of the LBIE litigation, certain one time gains related to loss mitigation and workout efforts and a higher contribution to adjusted operating income from the Asset Management segment in six months 2025, offset in part by a higher loss expense in U.S. and non-U.S. public finance sectors, lower fair value gains on the trading portfolio and lower earned premiums on refundings of financial guaranty insurance contracts in six months 2025. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Current wording

Adjusted operating income in nine months 2025 was $336 million, compared with $323 million in nine months 2024. The increase was primarily due to the gain related to the resolution of the LBIE litigation in 2025, and higher equity in earnings and net investment income in nine months 2025, offset in part by a higher loss expense in public finance sectors, lower fair value gains on the trading portfolio and lower earned premiums on refundings of financial guaranty insurance contracts in nine months 2025. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Previous wording

The Company’s surveillance and treasury functions have reviewed the Company’s insurance and investment portfolios, respectively, and have identified no material direct exposure to Ukraine or Russia. In fact, the Company’s direct insurance exposure to eastern Europe generally is limited to approximately $216 million in net par outstanding as of June 30, 2025, comprising of the sovereign debt of Poland. The Company rates all such exposure investment grade.

Current wording

The Company’s surveillance and treasury functions have reviewed the Company’s insurance and investment portfolios, respectively, and have identified no material direct exposure to Ukraine or Russia. In fact, the Company’s direct insurance exposure to Eastern Europe generally is limited to $210 million in net par outstanding as of September 30, 2025, comprising of the sovereign debt of Poland. The Company rates this exposure investment grade.