8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant To Section 13 or 15 (d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) — August 3, 2006

ASSURED GUARANTY LTD.
(Exact name of registrant as specified in its charter)

Bermuda	001-32141	98-0429991
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

Assured Guaranty Ltd.
30 Woodbourne Avenue
Hamilton HM 08 Bermuda
(Address of principal executive offices)

Registrant’s telephone number, including area code: (441) 299-9375

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

(Former name or former address, if changed since last report)

Item 2.02 Results of Operations and Financial Condition

On August 3, 2006, Assured Guaranty Ltd. issued a press release reporting its second quarter 2006 results and the availability of its second quarter financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.

Item 9.01   Financial Statements, Pro Forma Financial Information and Exhibits.

(c)    Exhibits

Exhibit Number	Description
99.1	Press release, dated August 3, 2006 reporting second quarter results
99.2	Second quarter 2006 Financial Supplement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ASSURED GUARANTY LTD.
By:	/s/ Robert B. Mills
	Robert B. Mills Chief Financial Officer

DATE:       August 3, 2006

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EX-99.1

Exhibit 99.1

Assured Guaranty Ltd.
30 Woodbourne Avenue, 5th Floor
Hamilton HM 08
Bermuda
t. 441.299.9375
www.assuredguaranty.com

Press Release

Assured Guaranty Ltd. Reports Second Quarter 2006 Net Income of $44.5 Million

Hamilton, Bermuda, August 3, 2006 — Assured Guaranty Ltd. (NYSE: AGO) (“Assured Guaranty” or the “Company”) reported net income for the quarter ended June 30, 2006 of $44.5 million, or $0.60 per diluted share, compared with net income of $66.8 million, or $0.90 per diluted share, for the second quarter of 2005.  Operating income, a non-GAAP financial measure, was $41.0 million for the quarter, or $0.55 per diluted share, compared with $75.2 million, or $1.02 per diluted share, reported for the prior year period.  See “Explanation of Non-GAAP Financial Measures” below.

Second quarter 2006 net income and operating income declined from the prior year period principally due to after-tax income that was recognized in the second quarter of 2005 of $41.4 million, or $0.56 per diluted share, from the CFS-Related Securities Fraud Litigation settlement (“CFS Settlement”).  During the second quarter of 2006, the Company recorded after-tax income of $6.6 million, or $0.09 per diluted share, in loss salvage recoveries in its other segment.

Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Ltd., commented, “Our second quarter 2006 new business results are a further indicator of the progress we are making in our direct financial guaranty franchise.  We were also pleased by Moody’s decision to raise Assured Guaranty Corp.’s rating outlook to Positive, which we view as a major acknowledgement of our continuing success.”

To assist analysts and investors in evaluating Assured Guaranty’s financial results, this press release references several non-GAAP financial measures.  These non-GAAP financial measures are defined in the “Explanation of Non-GAAP Financial Measures” section of this press release.  In each case, if available, the most directly comparable GAAP financial measure is presented and a reconciliation of the non-GAAP financial measure and GAAP financial measure is provided. This presentation is consistent with how Assured Guaranty management, analysts and investors evaluate Assured Guaranty’s financial results and is comparable to the earnings per share estimates published by analysts in their research reports on Assured Guaranty.  The non-GAAP financial measures included in this press release are: operating income, present value of financial guaranty and mortgage guaranty gross written premiums (PVP), net present value of estimated future installment premiums in force, and adjusted book value.

Analysis of Net Income
($ in millions)

	2Q-06			2Q-05			% Change
Net income	$	44.5		$	66.8		(33	)%
Less: After-tax realized (losses) gains on investments	(0.8		)	1.2			NMF
Less: After-tax unrealized gains (losses) on derivatives	4.3			(9.7		)	NMF
Operating income	$	41.0		$	75.2		(45	)%
Weighted average shares outstanding (in millions):
Basic	73.6			73.8			(0.3	)%
Diluted	74.4			74.1			0.4	%

Per Diluted Share

	2Q-06			2Q-05			% Change
Net income	$	0.60		$	0.90		(33	)%
Less: After-tax realized (losses) gains on investments	(0.01		)	0.02			NMF
Less: After-tax unrealized gains (losses) on derivatives	0.06			(0.13		)	NMF
Operating income	$	0.55		$	1.02		(46	)%

New Business Production:

Analysis of Present Value of Financial Guaranty and Mortgage Guaranty
Gross Written Premiums (PVP)
($ in millions)

	2Q-06		2Q-05		% Change
Gross written premiums (GWP) analysis:
Present value of financial guaranty & mortgage guaranty GWP (PVP)(1)
Financial guaranty direct	$	98.8	$	22.7	335	%
Financial guaranty reinsurance	49.6		35.2		41	%
Mortgage guaranty	—		—		—
Total PVP	148.4		57.9		156	%
Less: Installment premium PVP	70.8		38.3		85	%
Upfront financial guaranty & mortgage guaranty GWP	77.6		19.6		296	%
Less: Upfront premium due to FSA Transaction	—		18.4		NMF
Plus: Installment GWP	33.8		29.8		13	%
Financial guaranty & mortgage guaranty GWP	111.4		31.0		259	%
Plus: Other segment GWP	0.1		9.5		(99	)%
Total gross written premiums	$	111.5	$	40.5	175	%

1. Due to reporting lags by our ceding companies, PVP in 2006 for treaty reinsurance installment premiums from our financial guaranty reinsurance segment is reported on a one-quarter lag.  In 2005, PVP for both treaty and facultative reinsurance installment premiums from our financial guaranty reinsurance segment is reported on a one-quarter lag.

New business production as measured by PVP, a non-GAAP financial measure, totaled $148.4 million in the second quarter of 2006, an increase of 156% from $57.9 million in the second quarter of 2005.  The financial guaranty direct segment generated $98.8 million of PVP, a 335% increase over second quarter 2005 PVP of $22.7 million, reflecting growth in all of our markets.  Financial guaranty reinsurance PVP in the second quarter of 2006 was $49.6 million, an increase of 41% from $35.2 million in the second quarter of 2005 due to

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stronger U.S. public finance and international production as well as an increase in large premium transactions compared to the prior quarter.

Income Statement Highlights:

Net Written Premiums by Segment
($ in millions)

	2Q-06		2Q-05		% Change
Financial guaranty direct	$	67.8	$	20.4	232	%
Financial guaranty reinsurance	41.3		8.0		416	%
Mortgage guaranty	1.2		1.9		(37	)%
Total financial guaranty	110.3		30.2		265	%
Other	—		—		—
Total	$	110.3	$	30.2	265	%

Net written premiums in the second quarter of 2006 were $110.3 million, up 265% from $30.2 million reported in the second quarter of 2005, due to higher financial guaranty direct and reinsurance net written premiums in the current quarter and the effect of the novation of Financial Security Assurance Inc.’s reinsurance book from Assured Guaranty Corp. to Assured Guaranty Re. Ltd. (“FSA Transaction”) in the second quarter of 2005, which reduced net written premiums by $18.4 million in that period.  Net written premiums in the financial guaranty direct segment were $67.8 million, up 232% over the $20.4 million reported in the prior year period, reflecting higher levels of upfront premiums, principally in our international operations.  Second quarter 2006 financial guaranty reinsurance net written premiums were $41.3 million, an increase of 416% over the second quarter of 2005, reflecting an increase in large up-front premium deals compared to the prior quarter as well as second quarter 2005 net premium cessions of $18.4 million related to the FSA Transaction.   Mortgage guaranty net written premiums were $1.2 million compared to $1.9 million in the prior year period, reflecting the reduction of in-force business in this segment.

Net Earned Premiums by Segment
($ in millions)

	2Q-06		2Q-05		% Change
Financial guaranty direct	$	21.2	$	16.0	33	%
Financial guaranty reinsurance	23.1		27.2		(15	)%
Mortgage guaranty	3.7		5.1		(27	)%
Total financial guaranty	48.2		48.3		(0.2	)%
Other	—		—		—
Total	$	48.2	$	48.3	(0.2	)%

Net earned premiums in the second quarter of 2006 were $48.2 million, which was relatively flat compared to the $48.3 million reported in the second quarter of 2005, which included higher net earned premiums from refundings than reported in the current quarter.  Financial guaranty direct net earned premiums in the second quarter of 2006 were $21.2 million, an increase of 33% compared to $16.0 million in the second quarter of 2005, due to the growth of this segment’s in-force book of business over the last year.    Financial guaranty reinsurance net earned premiums were $23.1 million in the second quarter of 2006 compared to $27.2 million reported in the second quarter of 2005, reflecting lower refunding-related net earned premiums in the current quarter and changes in the mix of in-force business.  Municipal bond refunding net earned premiums, which are reported on a one-quarter lag, were $1.7 million ($0.01 per diluted share) in the second quarter of 2006 compared with $3.6 million ($0.02 per diluted share) in the second quarter of 2005.  Mortgage guaranty net earned premiums in the second

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quarter of 2006 declined to $3.7 million from $5.1 million in the second quarter of 2005, primarily due to the run-off of this segment’s in-force book of business.

Underwriting Results by Segment
($ in millions)

	2Q-06		2Q-05			% Change
Financial guaranty direct	$	9.4	$	(0.1	)	NMF
Financial guaranty reinsurance	4.6		74.8			(94	)%
Mortgage guaranty	2.0		3.2			(38	)%
Total financial guaranty	16.0		77.9			(79	)%
Other	10.1		—			NMF
Total	$	26.1	$	77.9		(67	)%

Assured Guaranty reported a consolidated underwriting gain of $26.1 million in the second quarter of 2006 compared to an underwriting gain of $77.9 million in the second quarter of 2005, which included $63.7 million in loss reserve recoveries from the CFS Settlement.  The second quarter of 2006 underwriting gain also included a benefit of $10.1 million due to a loss salvage recovery from a litigation settlement.  Excluding these items from each respective period, second quarter 2006 underwriting gain rose 13% from the prior year period.

The underwriting gain for the financial guaranty direct segment increased to $9.4 million in the second quarter of 2006 compared to an underwriting loss of $0.1 million in the second quarter of 2005.  This improvement was the result of growth in earned premiums in the current quarter and favorable case loss expenses compared to the second quarter of 2005, which included a $4.5 million case loss reserve for a sub-prime mortgage transaction.  The underwriting gain for the financial guaranty reinsurance segment was $4.6 million in the second quarter of 2006, down from an underwriting gain of $74.8 million in the second quarter of 2005, which included a $63.7 million recovery from the CFS Settlement.  Reinsurance underwriting results for the second quarter of 2006 declined due to lower net earned premiums and loss adjustment expense reserves for a large European infrastructure transaction that experienced credit deterioration during the quarter.  The mortgage guaranty segment’s underwriting results in the second quarter of 2006 were $2.0 million, down from $3.2 million in the second quarter of 2005 reflecting the decline of in-force business.  The other segment generated an underwriting gain of $10.1 million in the second quarter of 2006 as a result of the previously mentioned loss salvage recovery.

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Shareholders’ Equity Highlights:

(amounts in millions except per share data)

	As of
	June 30, 2006	December 31, 2005
Book value	$1,682.8	$1,661.5
Net UPR less DAC—after-tax1	330.0	283.5
Net present value of estimated future installment premiums in force—after tax2	365.9	327.3
Adjusted book value	$2,378.7	$2,272.3
Shares outstanding at the end of period (in millions)	73.2	74.8
Book value per share outstanding:
Book value	$22.98	$22.22
Net UPR less DAC—after-tax1	4.51	3.79
Net present value of estimated future installment premiums in force—after tax2	5.00	4.38
Adjusted book value	$32.48	$30.39

1.Unearned premium reserve (UPR) less pre-paid reinsurance premiums and deferred acquisition costs (DAC), all after-tax.

2.Due to reporting lag by our ceding companies, the present value of estimated treaty reinsurance installment premiums in force in our reinsurance segment is reported on a one-quarter lag effective the first quarter of 2006.  In prior periods, the present value of estimated treaty and facultative reinsurance premiums in force in our reinsurance segment were reported on a one-quarter lag.

At June 30, 2006, Assured Guaranty’s book value per share was $22.98, a 3% increase over the book value of $22.22 reported at December 31, 2005, reflecting 10% growth in retained earnings that was offset by a $40.8 million decrease in accumulated other comprehensive income principally due to the increase in market interest rates during the period.  Adjusted book value per share, a non-GAAP financial measure, at June 30, 2006 was $32.48, up 7% from December 31, 2005, reflecting growth in book value and the Company’s in-force book of business, slightly offset by a decline in accumulated other comprehensive income due to the increase in market interest rates during the period.

Dividend: Earlier today, Assured Guaranty’s Board of Directors declared a regular quarterly dividend of U.S. $0.035 per common share.  The dividend is payable on September 19, 2006 to shareholders of record at the close of business on August 17, 2006.

Investor Conference Call:  Assured Guaranty will host a conference call for investors at 8:30 a.m. ET (9:30 a.m. AT) on Friday, August 4, 2006.  The earnings conference call will be available via live and archived webcast in the Investor Information section of the Company’s website at http://www.assuredguaranty.com/investor/default.aspx or by dialing 1-800-561-2718 (in the U.S.) or 1-617-614-3525 (International), passcode 60607520.  A replay of the call will be available through September 4, 2006.  To listen to the replay dial: 1-888-286-8010 (in the U.S.) or 1-617-801-6888 (International), passcode 36819807.

Please refer to Assured Guaranty Ltd.’s Second Quarter 2006 Financial Supplement, which is posted on the Company’s website at http://www.assuredguaranty.com/investor/ltd/financial.aspx, for more information on the Company’s individual segment performance, financial guaranty portfolios, investment portfolio and other items.

Assured Guaranty Ltd. is a 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 can be found at www.assuredguaranty.com.

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Explanation of Non-GAAP Financial Measures:

The following section defines non-GAAP financial measures presented in this press release and describes why they are useful for investors.

Operating income, which is a non-GAAP financial measure, is defined as net income excluding after-tax realized gains (losses) on investments and after-tax unrealized gains (losses) on derivative financial instruments.  We believe operating income is a useful measure for management, equity analysts and investors because the presentation of operating income enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.  We exclude net realized gains (losses) on investments and net unrealized gains (losses) on derivative financial instruments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, market interest rates, credit spreads and other factors that management cannot control or predict.  This measure should not be viewed as a substitute for net income determined in accordance with GAAP.

Adjusted book value, which is a non-GAAP financial measure, is defined as shareholders’ equity (book value) plus the after-tax value of the financial guaranty and mortgage guaranty unearned premium reserve net of prepaid reinsurance premiums and deferred acquisition costs plus the net present value of estimated future installment premiums in force, less future ceding commissions, after-tax, discounted at 6%.  We believe adjusted book value is a useful measure for management, equity analysts and investors because the calculation of adjusted book value permits an evaluation of the net present value of the Company’s in-force premiums and capital base. The premiums described above will be earned in future periods, but may differ materially from the estimated amounts used in determining current adjusted book value due to changes in market interest rates, refinancing or refunding activity, pre-payment speeds, policy changes or terminations, credit defaults, and other factors that management cannot control or predict.  This measure should not be viewed as a substitute for book value determined in accordance with GAAP.

Net present value of estimated future installment premiums in force, which is a non-GAAP financial measure, is defined as the present value of estimated future financial guaranty and mortgage guaranty installment premiums from our in-force book of business, net of reinsurance and discounted at 6%.    We believe net present value of estimated future installment premiums in force is a useful measure for management, equity analysts and investors because it permits an evaluation of the value of future estimated installment premiums. Estimated future premiums may change from period to period due to changes in par outstanding, maturity or other factors that management cannot control or predict that result from market interest rates, refinancing or refunding activity, pre-payment speeds, policy changes or terminations, credit defaults, or other factors.  There is no comparable GAAP financial measure.

Present value of financial guaranty and mortgage guaranty gross written premiums or PVP, which is a non-GAAP financial measure, is defined as gross upfront and installment premiums received and the present value of gross estimated future installment premiums, on contracts written in the current period, discounted at 6% per year.   We believe PVP is a useful measure for management, equity analysts and investors because it permits the evaluation of the value of new business production for Assured Guaranty by taking into account the value of estimated future installment premiums on new contracts underwritten in a reporting period, which GAAP gross premiums written does not adequately measure.  Actual future net earned or written premiums may differ from PVP due to factors such as prepayments, amortizations, refundings, contract terminations or defaults that may or may not be influenced by market interest rates, refinancing or refunding activity, pre-payment speeds, policy changes or terminations, credit defaults, or other factors that management cannot control or predict. This measure should not be viewed as a substitute for gross written premiums determined in accordance with GAAP.

For adjusted book value, net present value of estimated future installment premiums in force and present value of financial guaranty and mortgage guaranty gross written premiums or PVP we use 6% as the present value discount rate because it is the approximate taxable equivalent yield on our investment portfolio for the periods presented.

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Assured Guaranty Ltd.
Consolidated Income Statements

	Three Months Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
	(dollars in millions)
Revenues
Gross written premiums	$111.5		$40.5		$166.9		$118.6
Net written premiums	110.3		30.2		161.1		106.6
Net earned premiums	48.2		48.3		96.2		96.4
Net investment income	27.3		23.7		53.5		46.8
Other income	—		(0.2	)	—		0.1
Total revenues	$75.5		$71.8		$149.7		$143.3
Expenses
Loss and loss adjustment expenses	(6.5	)	(59.1	)	(6.9	)	(68.5	)
Profit commission expense	1.7		3.3		3.0		4.3
Acquisition costs	11.3		11.7		22.1		21.9
Other operating expenses	15.6		14.5		32.8		29.0
Other expenses	4.1		5.9		8.0		9.2
Total expenses	$26.2		$(23.7	)	$59.0		$(4.1	)
Income before provision for income taxes	49.3		95.5		90.7		147.4
Total provision for income taxes	8.3		20.3		14.0		30.8
Operating income *	$41.0		$75.2		$76.7		$116.6
After-tax realized (losses) gains on investments	(0.8	)	1.2		(1.4	)	2.7
After-tax unrealized gains (losses) on derivatives	4.3		(9.7	)	4.2		(8.1	)
Net income	$44.5		$66.8		$79.4		$111.1

*Net income excluding after-tax realized gains (losses) on investments and after-tax unrealized gains (losses) on derivative financial instruments.

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Assured Guaranty Ltd.
Consolidated Balance Sheets

	As of:
	June 30, 2006		December 31, 2005
	(dollars in millions)
Assets
Fixed maturity securities, at fair value	$	2,069.2	$	2,134.0
Short-term investments, at cost which approximates fair value	170.7		115.8
Total investments	2,239.9		2,249.8
Cash and cash equivalents	29.2		6.2
Accrued investment income	22.7		22.7
Deferred acquisition costs	205.3		193.4
Prepaid reinsurance premiums	12.4		12.5
Reinsurance recoverable on ceded losses	11.3		12.4
Premiums receivable	42.2		33.0
Goodwill	85.4		85.4
Unrealized gains on derivative financial instruments	52.3		53.0
Current income taxes receivable	7.6		3.0
Receivables for securities sold	9.7		1.0
Other assets	17.4		16.7
Total assets	$	2,735.4	$	2,689.1
Liabilities and shareholders’ equity
Liabilities
Unearned premium reserves	$	601.9	$	537.1
Reserves for losses and loss adjustment expenses	114.6		121.2
Profit commissions payable	29.6		53.0
Reinsurance balances payable	1.4		3.7
Deferred income taxes	24.3		26.6
Funds held by Company under reinsurance contracts	20.3		19.2
Unrealized losses on derivative financial instruments	6.2		12.7
Long-term debt	197.4		197.3
Liability for tax basis step-up adjustment	19.8		20.1
Payables for securities purchased	12.1		0.8
Other liabilities	24.9		35.8
Total liabilities	1,052.6		1,027.6
Shareholders’ equity
Common stock	0.7		0.7
Additional paid-in capital	855.3		882.0
Unearned stock grant compensation	—		(14.8		)
Retained earnings	821.8		747.7
Accumulated other comprehensive income	5.0		45.8
Total shareholders’ equity	1,682.8		1,661.5
Total liabilities and shareholders’ equity	$	2,735.4	$	2,689.1

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Cautionary Statement Regarding Forward-Looking Statements:

Any forward-looking statements made in this press release reflect the Company’s current views 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.  For example, the Company’s forward-looking statements, including its calculations of adjusted book value, PVP and net present value of estimated future installment premiums in force, and statements regarding ratings improvement and the growth of the direct business could be affected by many events.  These events include a significant reduction in the amount of reinsurance ceded by one or more of our principal ceding companies, rating agency action such as a ratings downgrade, difficulties with the execution of the Company’s business strategy, contract cancellations, developments in the world’s financial and capital markets, more severe or frequent losses associated with products affecting the adequacy of the Company’s loss reserve, changes in regulation or tax laws, governmental actions, natural catastrophes, the Company’s dependence on customers, decreased demand or increased competition, loss of key personnel, technological developments, the effects of mergers, acquisitions and divestitures, changes in accounting policies or practices, changes in general economic conditions, other risks and uncertainties that have not been identified at this time, management’s response to these factors, and other risk factors identified in the Company’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.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:

Investors and Media

Sabra Purtill, CFA
Managing Director, Investor Relations and Strategic Planning
212-408-6044
441-278-6665
spurtill@assuredguaranty.com

Christopher McNamee
Assistant Vice President, Investor Relations
212-261-5509
cmcnamee@assuredguaranty.com

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EX-99.2

Exhibit 99.2

Assured Guaranty Ltd.
Financial Supplement
Second Quarter 2006
June 30, 2006

Table of Contents	Page
Assured Guaranty Ltd.
Selected Financial Highlights	1
Consolidated GAAP Income Statements	2
Consolidated GAAP Balance Sheets	3
Segment Consolidation	4-5
Financial Guaranty Direct Segment	6-7
Financial Guaranty Reinsurance Segment	8-9
Mortgage Guaranty Segment	10
Other Segment	11
Loss and LAE Reserves	12
Investment Portfolio	13
Financial Guaranty Profile	14-16
Non-Investment Grade Exposures	17
Closely Monitored Credits	18
Largest Exposures by Sector	19-20
Consolidated Capital and Claims Paying Resources	21
Summary Financial and Statistical Data	22

This supplement should be read in conjunction with documents filed by Assured Guaranty Ltd. (the “Company”) with the Securities and Exchange Commission, including our 10-Q’s dated March 31, 2005, June 30, 2005, September 30, 2005 and March 31, 2006 and our 10-K for the year ended December 31, 2005.

Cautionary Statement Regarding Forward-Looking Statements:

Any forward-looking statements made in this supplement reflect the Company’s current views 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. For example, the Company’s forward-looking statements, including its calculations of adjusted book value, PVP and net present value of estimated future installment premiums in force, and statements regarding ratings improvement and the growth of the direct business could be affected by many events. These events include a significant reduction in the amount of reinsurance ceded by one or more of our principal ceding companies, rating agency action such as a ratings downgrade, difficulties with the execution of the Company’s business strategy, contract cancellations, developments in the world’s financial and capital markets, more severe or frequent losses associated with products affecting the adequacy of the Company’s loss reserve, changes in regulation or tax laws, governmental actions, natural catastrophes, the Company’s dependence on customers, decreased demand or increased competition, loss of key personnel, technological developments, the effects of mergers, acquisitions and divestitures, changes in accounting policies or practices, changes in general economic conditions, other risks and uncertainties that have not been identified at this time, management’s response to these factors, and other risk factors identified in the Company’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. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Assured Guaranty Ltd.

Selected Financial Highlights

(dollars and shares in millions except per share amounts)

	Quarter Ended						% Change		Six Months Ended						% Change
	June 30,						versus		June 30,						versus
	2006			2005			2Q-05		2006			2005			YTD 2005
Gross written premiums (GWP) analysis:
Present value of financial guaranty & mortgage guaranty GWP (PVP)(a)	$	148.4		$	57.9		156	%	$	210.2		$	140.5		50	%
Less: Installment premium PVP	70.8			38.3			85	%	115.0			86.1			34	%
Upfront financial guaranty & mortgage guaranty GWP	77.6			19.6			296	%	95.2			54.4			75	%
Less: Upfront premium due to novations	—			18.4			NMF		—			18.4			NMF
Plus: Installment GWP	33.8			29.8			13	%	67.8			72.2			(6	)%
Financial guaranty & mortgage guaranty GWP	111.4			31.0			259	%	163.0			108.2			51	%
Plus: Other segment GWP	0.1			9.5			(99	)%	3.9			10.4			(63	)%
Total GWP	$	111.5		$	40.5		175	%	$	166.9		$	118.6		41	%
Net income	$	44.5		$	66.8		(33	)%	$	79.4		$	111.1		(29	)%
Less: After-tax realized (losses) gains on investments	(0.8		)	1.2			NMF		(1.4		)	2.7			NMF
Less: After-tax unrealized gains (losses) on derivatives	4.3			(9.7		)	NMF		4.2			(8.1		)	NMF
Operating income(b)	$	41.0		$	75.2		(45	)%	$	76.7		$	116.6		(34	)%
Book value	$	1,682.8		$	1,619.5		4	%
Plus: Net unearned premium reserve less DAC, after-tax(1)	330.0			279.8			18	%
Plus: Net present value of estimate future installment premiums in-force, after-tax(d)	365.9			300.6			22	%
Adjusted book value(c)	$	2,378.7		$	2,199.9		8	%
ROE, excluding AOCI	10.7		%	17.7		%			9.6		%	14.9		%
Less: After-tax realized (losses) gains on investments	(0.2		)%	0.3		%			(0.2		)%	0.4		%
Less: After-tax unrealized gains (losses) on derivatives	1.0		%	(2.6		)%			0.5		%	(1.1		)%
Operating ROE, excluding AOCI(b)	9.9		%	19.9		%			9.3		%	15.6		%
Per diluted share:
Net income	$	0.60		$	0.90		(33	)%	$	1.06		$	1.49		(29	)%
Less: After-tax realized (losses) gains on investments	(0.01		)	0.02			NMF		(0.02		)	0.04			NMF
Less: After-tax unrealized gains (losses) on derivatives	0.06			(0.13		)	NMF		0.06			(0.11		)	NMF
Operating income(b)	$	0.55		$	1.02		(46	)%	$	1.03		$	1.56		(34	)%
Book value	$	22.98		$	21.63		6	%
Plus: Net unearned premium reserve less DAC, after-tax(1)	4.51			3.74			21	%
Plus: Net present value of estimate future installment premiums in-force, after-tax(d)	5.00			4.01			25	%
Adjusted book value(c)	$	32.48		$	29.38		11	%
Additional information:
Shares outstanding at the end of period(2)	73.2			74.9			(2	)%
Weighted average basic shares outstanding	73.6			73.8			(0.3	)%	73.7			74.1			(1	)%
Weighted average diluted shares outstanding	74.4			74.1			0.4	%	74.6			74.5			0.1	%
Consolidated net debt service outstanding	$	160,388		$	137,104		17	%
Consolidated net par outstanding	115,611			94,867			22	%
Consolidated claims-paying resources	3,206			3,028			6	%
Gross par written	15,283			3,515			335	%	23,412			8,953			161	%

(1)Unearned premium reserve (UPR) less pre-paid reinsurance premiums and deferred acquisition costs (DAC), all after-tax

(2)6/30/06 shares outstanding excludes 1.2 million of nonvested restricted stock, which is considered not issued under FAS 123R. 12/31/05 shares outstanding includes 1.0 million of nonvested restricted stock.

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), adjusted book value (c), and net present value of estimated future installment premiums in force (d)].

1

Assured Guaranty Ltd.

Consolidated GAAP Income Statements

(dollars and shares in millions, except per share amounts)

	Quarter Ended						% Change		Six Months Ended						% Change
	June 30,						versus		June 30,						versus
	2006			2005			2Q-05		2006			2005			YTD 2005
Revenues
Gross written premiums	$	111.5		$	40.5		175	%	$	166.9		$	118.6		41	%
Net written premiums	110.3			30.2			265	%	161.1			106.6			51	%
Net earned premiums	48.2			48.3			(0.2	)%	96.2			96.4			(0.2	)%
Net investment income	27.3			23.7			15	%	53.5			46.8			14	%
Other income	—			(0.2		)	NMF		—			0.1			NMF
Total revenues	75.5			71.8			5	%	149.7			143.3			4	%
Expenses
Loss and loss adjustment expenses	(6.5		)	(59.1		)	(89	)%	(6.9		)	(68.5		)	(90	)%
Profit commission expense	1.7			3.3			(48	)%	3.0			4.3			(30	)%
Acquisition costs	11.3			11.7			(3	)%	22.1			21.9			1	%
Other operating expenses	15.6			14.5			8	%	32.8			29.0			13	%
Other expenses	4.1			5.9			(31	)%	8.0			9.2			(13	)%
Total expenses	26.2			(23.7		)	NMF		59.0			(4.1		)	NMF
Income before provision for income taxes	49.3			95.5			(48	)%	90.7			147.4			(38	)%
Total provision for income taxes	8.3			20.3			(59	)%	14.0			30.8			(55	)%
Operating income(b)	41.0			75.2			(45	)%	76.7			116.6			(34	)%
After-tax realized (losses) gains on investments	(0.8		)	1.2			NMF		(1.4		)	2.7			NMF
After-tax unrealized gains (losses) on derivatives	4.3			(9.7		)	NMF		4.2			(8.1		)	NMF
Net income	$	44.5		$	66.8		(33	)%	$	79.4		$	111.1		(29	)%
Per diluted share
Operating income(b)	$	0.55		$	1.02		(46	)%	$	1.03		$	1.56		(34	)%
After-tax realized (losses) gains on investments	(0.01		)	0.02			NMF		(0.02		)	0.04			NMF
After-tax unrealized gains (losses) on derivatives	0.06			(0.13		)	NMF		0.06			(0.11		)	NMF
Net income	$	0.60		$	0.90		(33	)%	$	1.06		$	1.49		(29	)%
Weighted average shares outstanding
Basic shares outstanding	73.6			73.8			(0.3	)%	73.7			74.1			(1	)%
Plus: effect of options	0.5			0.2			150	%	0.5			0.1			400	%
Plus: effect of restricted stock	0.3			0.1			200	%	0.4			0.2			100	%
Diluted shares outstanding	74.4			74.1			0.4	%	74.6			74.5			0.1	%

Note:Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

Some amounts may not foot due to rounding.

2

Assured Guaranty Ltd.

Consolidated GAAP Balance Sheets

(dollars in millions)

	As of :
	June 30,		December 31,
	2006		2005
Assets
Fixed maturity securities, at fair value	$	2,069.2	$	2,134.0
Short-term investments, at cost which approximates fair value	170.7		115.8
Total investments	2,239.9		2,249.8
Cash and cash equivalents	29.2		6.2
Accrued investment income	22.7		22.7
Deferred acquisition costs	205.3		193.4
Prepaid reinsurance premiums	12.4		12.5
Reinsurance recoverable on ceded losses	11.3		12.4
Premiums receivable	42.2		33.0
Goodwill	85.4		85.4
Unrealized gains on derivative financial instruments	52.3		53.0
Current income taxes receivable	7.6		3.0
Receivables for securities sold	9.7		1.0
Other assets	17.4		16.7
Total assets	$	2,735.4	$	2,689.1
Liabilities and shareholders’ equity
Liabilities
Unearned premium reserves	$	601.9	$	537.1
Reserves for losses and loss adjustment expenses	114.6		121.2
Profit commissions payable	29.6		53.0
Reinsurance balances payable	1.4		3.7
Deferred income taxes	24.3		26.6
Funds held by Company under reinsurance contracts	20.3		19.2
Unrealized losses on derivative financial instruments	6.2		12.7
Long-term debt	197.4		197.3
Liability for tax basis step-up adjustment	19.8		20.1
Payables for securities purchased	12.1		0.8
Other liabilities	24.9		35.8
Total liabilities	1,052.6		1,027.6
Shareholders’ equity
Common stock	0.7		0.7
Additional paid-in capital	855.3		882.0
Unearned stock grant compensation	—		(14.8		)
Retained earnings	821.8		747.7
Accumulated other comprehensive income	5.0		45.8
Total shareholders’ equity	1,682.8		1,661.5
Total liabilities and shareholders’ equity	$	2,735.4	$	2,689.1

3

Assured Guaranty Ltd.

Segment Consolidation (1 of 2)

(dollars in millions)

	Quarter Ended June 30, 2006
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other			Total
Present value of financial guaranty gross written premiums (PVP):(a)
U.S. public finance	$	6.0		$	29.7		$	—		$	35.7					$	35.7
U.S. structured finance	41.0			2.0			—			43.0						43.0
International	51.8			17.9			—			69.7						69.7
Total PVP	$	98.8		$	49.6		$	—		$	148.4					$	148.4
Income statement:
Gross written premiums	$	68.4		$	41.7		$	1.2		$	111.4		$	0.1		$	111.5
Net written premiums	67.8			41.3			1.2			110.3			—			110.3
Net earned premiums	21.2			23.1			3.7			48.2			—			48.2
Loss and loss adjustment expenses	(2.5		)	5.7			0.4			3.6			(10.1		)	(6.5		)
Profit commission expense	—			1.0			0.7			1.7			—			1.7
Acquisition costs	2.3			8.5			0.3			11.3			—			11.3
Operating expenses	12.0			3.4			0.3			15.6			—			15.6
Total underwriting expenses	$	11.8		$	18.5		$	1.7		$	32.2		$	(10.1	)	$	22.1
Underwriting gain	$	9.4		$	4.6		$	2.0		$	16.0		$	10.1		$	26.1
Loss and loss adjustment expense ratio	(11.7		)%	24.6		%	9.4		%	7.4		%				(13.5		)%
Expense ratio	67.4		%	55.4		%	36.4		%	59.3		%				59.3		%
Combined ratio	55.7		%	80.0		%	45.8		%	66.7		%				45.8		%

	Quarter Ended June 30, 2005
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other		Total
PVP:
U.S. public finance	$	5.1		$	15.4		$	—		$	20.5				$	20.5
U.S. structured finance	16.1			4.9			—			21.0					21.0
International	1.5			15.0			—			16.4					16.4
Total PVP	$	22.7		$	35.2		$	—		$	57.9				$	57.9
Income statement:
Gross written premiums	$	20.9		$	8.2		$	1.9		$	31.0		$	9.5	$	40.5
Net written premiums	20.4			8.0			1.9			30.2			—		30.2
Net earned premiums	16.0			27.2			5.1			48.3			—		48.3
Loss and loss adjustment expenses	5.0			(64.1		)	—			(59.1		)	—		(59.1		)
Profit commission expense	—			2.3			1.0			3.3			—		3.3
Acquisition costs	1.6			9.5			0.6			11.7			—		11.7
Operating expenses	9.5			4.7			0.3			14.5			—		14.5
Total underwriting expenses	$	16.1		$	(47.6	)	$	1.9		$	(29.6	)	$	—	$	(29.6	)
Underwriting (loss) gain	$	(0.1	)	$	74.8		$	3.2		$	77.9		$	—	$	77.9
Loss and loss adjustment expense ratio	31.3		%	(235.7		)%	—			(122.4		)%			(122.4		)%
Expense ratio	69.1		%	60.7		%	37.5		%	61.0		%			61.0		%
Combined ratio	100.4		%	(175.0		)%	37.5		%	(61.4		)%			(61.4		)%

(1)Due to the timing of receipts of reports prepared by our ceding companies, present value of treaty financial guaranty gross written premiums (PVP) for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.  PVP of facultative financial guaranty gross written premiums for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a current quarter basis.

Note:Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

4

Assured Guaranty Ltd.

Segment Consolidation (2 of 2)

(dollars in millions)

	Six Months Ended June 30, 2006
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other			Total
Present value of financial guaranty gross written premiums (PVP):(a)
U.S. public finance	$	14.4		$	38.2		$	—		$	52.7					$	52.7
U.S. structured finance	68.6			5.3			—			73.9						73.9
International	57.5			26.2			—			83.6						83.6
Total PVP	$	140.5		$	69.7		$	—		$	210.2					$	210.2
Income statement:
Gross written premiums	$	98.6		$	60.5		$	3.8		$	163.0		$	3.9		$	166.9
Net written premiums	97.5			59.8			3.8			161.1			—			161.1
Net earned premiums	41.9			46.4			7.9			96.2			—			96.2
Loss and loss adjustment expenses	(4.3		)	8.5			0.2			4.4			(11.3		)	(6.9		)
Profit commission expense	—			1.4			1.6			3.0			—			3.0
Acquisition costs	4.2			17.2			0.6			22.1			—			22.1
Operating expenses	25.4			6.8			0.6			32.8			—			32.8
Total underwriting expenses	$	25.3		$	33.8		$	3.1		$	62.3		$	(11.3	)	$	51.0
Underwriting gain	$	16.6		$	12.6		$	4.8		$	33.9		$	11.3		$	45.2
Loss and loss adjustment expense ratio	(10.2		)%	18.3		%	2.5		%	4.6		%				(7.2		)%
Expense ratio	70.6		%	54.5		%	36.2		%	60.2		%				60.2		%
Combined ratio	60.4		%	72.8		%	38.7		%	64.8		%				53.0		%

	Six Months Ended June 30, 2005
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other			Total
PVP:
U.S. public finance	$	6.7		$	34.4		$	—		$	41.0					$	41.0
U.S. structured finance	47.1			7.9			—			55.0						55.0
International	6.4			25.0			13.1			44.5						44.5
Total PVP	$	60.1		$	67.3		$	13.1		$	140.5					$	140.5
Income statement:
Gross written premiums	$	44.7		$	42.2		$	21.3		$	108.2		$	10.4		$	118.6
Net written premiums	43.5			42.0			21.3			106.6			—			106.6
Net earned premiums	36.4			50.2			9.7			96.4			—			96.4
Loss and loss adjustment expenses	3.5			(71.2		)	0.2			(67.5		)	(1.1		)	(68.5		)
Profit commission expense	—			2.3			2.0			4.3			—			4.3
Acquisition costs	3.1			17.6			1.1			21.9			—			21.9
Operating expenses	20.9			7.5			0.6			29.0			—			29.0
Total underwriting expenses	$	27.5		$	(43.8	)	$	3.9		$	(12.4	)	$	(1.1	)	$	(13.4	)
Underwriting gain	$	8.9		$	94.0		$	5.8		$	108.8		$	1.1		$	109.9
Loss and loss adjustment expense ratio	9.7		%	(141.8		)%	2.1		%	(70.0		)%				(71.1		)%
Expense ratio	65.8		%	54.6		%	38.1		%	57.2		%				57.2		%
Combined ratio	75.5		%	(87.2		)%	40.2		%	(12.8		)%				(13.9		)%

(1)Due to the timing of receipts of reports prepared by our ceding companies, present value of treaty financial guaranty gross written premiums (PVP) for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.  PVP of facultative financial guaranty gross written premiums for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a current quarter basis.

Note:Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

5

Assured Guaranty Ltd.
Financial Guaranty Direct Segment (1 of 2)
(dollars in millions)

	3Q-04			4Q-04			1Q-05			2Q-05			3Q-05			4Q-05			1Q-06			2Q-06			Six Months 2004			Six Months 2005			Six Months 2006
Present value of gross written premiums (PVP)(a)	$	7.9		$	39.6		$	37.5		$	22.7		$	39.4		$	46.0		$	41.6		$	98.8		$	22.2		$	60.1		$	140.5
Less: Present value of installment premiums(a)	7.9			33.9			35.8			17.6			33.0			38.7			33.2			53.1			22.2			53.4			86.3
Upfront gross written premiums (GWP)	—			5.7			1.7			5.1			6.3			7.3			8.5			45.7			—			6.8			54.2
Plus: Installment GWP	16.1			15.6			22.1			15.8			18.6			19.3			21.8			22.7			43.3			37.9			44.4
Financial guaranty direct GWP	$	16.1		$	21.3		$	23.8		$	20.9		$	24.9		$	26.6		$	30.2		$	68.4		$	43.3		$	44.7		$	98.6
Income statement:
Gross written premiums	$	16.1		$	21.3		$	23.8		$	20.9		$	24.9		$	26.6		$	30.2		$	68.4		$	43.3		$	44.7		$	98.6
Net written premiums	14.1			20.9			23.1			20.4			24.2			26.3			29.7			67.8			42.6			43.5			97.5
Net earned premiums:
Public finance	—			0.1			0.1			0.4			0.7			1.5			1.1			1.7			—			0.5			2.8
Structured finance	16.5			15.4			20.3			15.6			17.6			18.3			19.6			19.5			56.8			35.9			39.1
Total net earned premiums	16.5			15.5			20.4			16.0			18.3			19.8			20.7			21.2			56.8			36.4			41.9
Loss and loss adjustment expenses:
Case	0.5			0.4			—			4.4			—			0.4			(1.6		)	(0.4		)	26.2			4.4			(2.0		)
Portfolio	(1.7		)	0.6			(1.5		)	0.6			(4.0		)	(2.1		)	(0.2		)	(2.1		)	(11.2		)	(0.9		)	(2.3		)
Total loss and loss adjustment expenses	(1.2		)	1.0			(1.5		)	5.0			(4.0		)	(1.7		)	(1.8		)	(2.5		)	15.0			3.5			(4.3		)
Profit commission expense	—			—			—			—			—			—			—			—			—			—			—
Acquisition costs	1.4			1.6			1.5			1.6			1.6			1.6			1.8			2.3			1.5			3.1			4.2
Operating expenses(1)	11.1			11.5			11.4			9.5			11.9			11.5			13.4			12.0			19.3			20.9			25.4
Total expenses	$	11.3		$	14.1		$	11.4		$	16.1		$	9.5		$	11.4		$	13.5		$	11.8		$	35.8		$	27.5		$	25.3
Underwriting gain (loss)	$	5.2		$	1.4		$	9.0		$	(0.1	)	$	8.8		$	8.4		$	7.2		$	9.4		$	21.0		$	8.9		$	16.6
Loss and loss adjustment expense ratio	(7.3		)%	6.5		%	(7.1		)%	31.3		%	(21.9		)%	(8.6		)%	(8.7		)%	(11.7		)%	26.4		%	9.7		%	(10.2		)%
Expense ratio	75.5		%	84.6		%	63.2		%	69.1		%	73.7		%	66.3		%	73.8		%	67.4		%	36.6		%	65.8		%	70.6		%
Combined ratio	68.2		%	91.1		%	56.1		%	100.4		%	51.8		%	57.7		%	65.1		%	55.7		%	63.0		%	75.5		%	60.4		%

(1)	During 2006 the Company implemented a new operating expense methodology to more closely apply expenses to the individual operating segments. This new methodology was based on a comprehensive study and is based on departmental time estimates and headcount. 2005 and 2004 amounts have been restated to show this new methodology on a comparative basis
Note:	Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), adjusted book value (c), and net present value of estimated future installment premiums in force (d)].

6

Assured Guaranty Ltd.
Financial Guaranty Direct Segment (2 of 2)
(dollars in millions)

	3Q-04		4Q-04		1Q-05		2Q-05		3Q-05		4Q-05		1Q-06		2Q-06		Six Months 2004		Six Months 2005		Six Months 2006
PVP(a):
U.S. public finance	$	—	$	5.7	$	1.6	$	5.1	$	6.3	$	7.0	$	8.5	$	6.0	$	0.0	$	6.7	$	14.4
U.S. structured finance	7.9		28.9		31.0		16.1		25.3		20.5		27.6		41.0		15.3		47.1		68.6
International	—		5.0		4.9		1.5		7.7		18.4		5.6		51.8		6.9		6.4		57.5
Total	$	7.9	$	39.6	$	37.5	$	22.7	$	39.4	$	46.0	$	41.6	$	98.8	$	22.2	$	60.1	$	140.5
Par written:
U.S. public finance	$	—	$	194	$	77	$	262	$	224	$	383	$	283	$	326	$	1	$	339	$	609
U.S. structured finance	854		7,163		1,173		2,159		4,635		4,966		4,446		10,943		3,831		3,332		15,389
International	508		100		265		102		353		2,569		648		2,210		346		367		2,858
Total	$	1,361	$	7,457	$	1,515	$	2,524	$	5,212	$	7,918	$	5,377	$	13,479	$	4,178	$	4,038	$	18,856
Par outstanding:
U.S. public finance	$	1,991	$	2,189	$	2,238	$	2,421	$	2,641	$	3,022	$	3,250	$	2,471	$	2,036	$	2,421	$	2,471
U.S. structured finance	22,192		25,166		24,589		23,873		26,781		28,917		31,559		38,847		22,063		23,873		38,847
International	2,274		4,257		3,763		3,725		3,975		6,400		7,215		9,806		1,676		3,725		9,806
Total	$	26,457	$	31,612	$	30,590	$	30,019	$	33,397	$	38,338	$	42,024	$	51,124	$	25,775	$	30,019	$	51,124
Net present value of installment premiums in force:(d)	$	218.9	$	231.0	$	238.3	$	216.4	$	230.4	$	249.6	$	265.7	$	300.5	$	219.7	$	216.4	$	300.5
Unearned premium reserve net of ceded reinsurance	14.7		20.3		23.0		27.0		33.2		39.6		48.6		95.2		17.1		27.0		95.2

Note:Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), adjusted book value (c), and net present value of estimated future installment premiums in force (d)].

7

Assured Guaranty Ltd.

Financial Guaranty Reinsurance Segment(1)  (1 of 2)

(dollars in millions)

	3Q-04			4Q-04			1Q-05			2Q-05			3Q-05			4Q-05			1Q-06			2Q-06			Six Months 2004			Six Months 2005			Six Months 2006
Present value of gross written premiums (PVP)(a)	$	38.9		$	35.7		$	32.1		$	35.2		$	22.5		$	37.9		$	20.1		$	49.6		$	118.2		$	67.3		$	69.7
Less: Present value of installment premiums(a)	14.5			11.6			12.1			20.7			7.2			18.5			11.0			17.7			57.2			32.8			28.7
Upfront gross written premiums (GWP)	24.5			24.1			20.0			14.6			15.3			19.4			9.1			31.9			61.0			34.5			41.0
Less: Upfront premium due to novations(2)	—			—			—			18.4			—			—			—			—			—			18.4			—
Plus: Installment GWP(3)	11.1			12.4			14.0			12.0			12.0			9.1			9.7			9.8			27.2			26.1			19.5
Financial guaranty reinsurance GWP	$	35.6		$	36.5		$	34.0		$	8.2		$	27.3		$	28.5		$	18.8		$	41.7		$	88.2		$	42.2		$	60.5
Income statement:
Gross written premiums:
Treaty	$	25.3		$	32.1		$	13.4		$	4.3		$	21.0		$	24.6		$	12.0		$	29.1		$	78.4		$	17.7		$	41.1
Facultative	10.3			4.4			20.6			3.9			6.3			3.9			6.8			12.6			9.8			24.5			19.4
Total gross written premiums	$	35.6		$	36.5		$	34.0		$	8.2		$	27.3		$	28.5		$	18.8		$	41.7		$	88.2		$	42.2		$	60.5
Net written premiums	35.6			36.3			34.0			8.0			27.3			28.5			18.5			41.3			88.2			42.0			59.8
Net earned premiums:
Scheduled net earned premiums	26.7			31.5			21.6			23.6			27.2			21.3			19.7			21.4			38.7			45.2			41.2
Net earned premiums from refundings	5.2			5.0			1.4			3.6			4.8			2.2			3.6			1.7			7.3			5.0			5.3
Total net earned premiums	31.9			36.5			23.0			27.2			32.0			23.5			23.3			23.1			46.0			50.2			46.4
Loss and loss adjustment expenses:
Case	1.4			1.2			(7.5		)	(60.4		)	(0.2		)	4.0			2.3			1.8			0.6			(67.9		)	4.1
Portfolio	9.4			0.4			0.4			(3.7		)	4.5			1.6			0.5			3.9			2.4			(3.3		)	4.4
Total loss and loss adjustment expenses	10.8			1.6			(7.1		)	(64.1		)	4.3			5.6			2.8			5.7			3.0			(71.2		)	8.5
Profit commission expense	(0.2		)	0.9			—			2.3			1.1			1.4			0.4			1.0			0.4			2.3			1.4
Acquisition costs	12.1			13.0			8.1			9.5			11.0			8.3			8.7			8.5			13.7			17.6			17.2
Operating expenses(4)	2.7			2.8			2.8			4.7			2.9			3.4			3.4			3.4			4.7			7.5			6.8
Total expenses	$	25.4		$	18.2		$	3.8		$	(47.6	)	$	19.2		$	18.7		$	15.3		$	18.5		$	21.8		$	(43.8	)	$	33.8
Underwriting gain	$	6.5		$	18.2		$	19.2		$	74.8		$	12.8		$	4.8		$	8.0		$	4.6		$	24.2		$	94.0		$	12.6
Loss and loss adjustment expense ratio	33.9		%	4.4		%	(30.9		)%	(235.7		)%	13.3		%	23.9		%	12.0		%	24.6		%	6.5		%	(141.8		)%	18.3		%
Expense ratio	45.6		%	45.6		%	47.4		%	60.7		%	46.8		%	55.8		%	53.6		%	55.4		%	40.8		%	54.6		%	54.5		%
Combined ratio	79.5		%	50.0		%	16.5		%	(175.0		)%	60.1		%	79.7		%	65.6		%	80.0		%	47.3		%	(87.2		)%	72.8		%

(1)Due to the timing of receiving reports prepared by our ceding companies, present value of treaty financial guaranty gross written premiums (PVP) for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.  PVP of facultative financial guaranty gross written premiums for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a current quarter basis.

(2)Relates to reassumption by FSA of approximately $820 million par value of healthcare related business.

(3)Installment gross written premiums includes the reclassification of certain deals originally recorded as installment that were discovered during 3Q-04 to be upfront premiums.  As a result, prior period amounts have been restated.  This reclass had an immaterial impact on our QTD and YTD results of operations and financial condition.

(4)During 2006 the Company implemented a new operating expense methodology to more closely apply expenses to the individual operating segments. This new methodology was based on a comprehensive study and is based on departmental time estimates and headcount. 2005 and 2004 amounts have been restated to show this new methodology on a comparative basis.

Note:Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

8

Assured Guaranty Ltd.
Financial Guaranty Reinsurance Segment(1) (2 of 2)
(dollars in millions)

	3Q-04		4Q-04		1Q-05		2Q-05		3Q-05		4Q-05		1Q-06		2Q-06		Six Months 2004		Six Months 2005		Six Months 2006
PVP(a):
U.S. public finance	$	25.5	$	21.6	$	18.9	$	15.4	$	16.5	$	23.1	$	8.5	$	29.7	$	55.5	$	34.4	$	38.2
U.S. structured finance	4.1		7.5		3.1		4.9		2.3		8.7		3.4		2.0		26.4		7.9		5.3
International	9.4		6.6		10.1		15.0		3.7		6.1		8.3		17.9		36.3		25.0		26.2
Total	$	38.9	$	35.7	$	32.1	$	35.2	$	22.5	$	37.9	$	20.1	$	49.6	$	118.2	$	67.3	$	69.7
Par written:
U.S. public finance	$	2,015	$	1,373	$	1,965	$	265	$	1,155	$	1,710	$	1,631	$	718	$	2,955	$	2,230	$	2,350
U.S. structured finance	421		682		1,718		308		309		616		444		251		1,225		2,026		695
International	333		249		241		418		186		260		677		835		1,125		659		1,512
Total	$	2,769	$	2,304	$	3,924	$	991	$	1,650	$	2,586	$	2,752	$	1,804	$	5,305	$	4,915	$	4,557
Par outstanding:
U.S. public finance	$	49,843	$	48,218	$	49,318	$	47,878	$	47,696	$	47,748	$	48,309	$	48,316	$	49,243	$	47,878	$	48,316
U.S. structured finance	10,125		9,814		10,404		10,325		9,686		9,661		9,387		8,314		10,435		10,325		8,314
International	6,042		5,948		6,082		6,645		6,540		6,719		7,196		7,857		5,898		6,645		7,857
Total	$	66,010	$	63,980	$	65,804	$	64,848	$	63,922	$	64,127	$	64,893	$	64,487	$	65,575	$	64,848	$	64,487
Net present value of installment premiums in force(d)	$	138.0	$	138.9	$	142.9	$	152.3	$	147.4	$	156.1	$	153.8	$	158.9	$	147.2	$	152.3	$	158.9
Unearned premium reserve net of ceded reinsurance	444.2		443.8		454.8		435.6		430.9		436.0		431.2		449.4		441.0		435.6		449.4

(1)Due to the timing of receiving reports prepared by our ceding companies, present value of treaty financial guaranty gross written premiums (PVP) for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.  PVP of facultative financial guaranty gross written premiums for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a current quarter basis.

Note:Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), adjusted book value (c), and net present value of estimated future installment premiums in force (d)].

9

Assured Guaranty Ltd.
Mortgage Guaranty Segment
(dollars in millions)

	3Q-04			4Q-04			1Q-05			2Q-05			3Q-05			4Q-05			1Q-06			2Q-06			Six Months 2004			Six Months 2005			Six Months 2006
Present value of gross written premiums (PVP)(a)	$	1.1		$	6.9		$	13.1		$	—		$	—		$	—		$	—		$	—		$	19.2		$	13.1		$	—
Less: Present value of installment premiums(a)	1.1			6.9			—			—			—			—			—			—			8.9			—			—
Upfront gross written premiums (GWP)	—			—			13.1			—			—			—			—			—			10.3			13.1			—
Plus: Installment GWP	5.3			4.2			6.3			1.9			1.7			2.7			2.6			1.2			4.6			8.2			3.8
Mortgage guaranty GWP	$	5.3		$	4.2		$	19.4		$	1.9		$	1.7		$	2.7		$	2.6		$	1.2		$	14.9		$	21.3		$	3.8
Income statement:
Gross written premiums	$	5.3		$	4.2		$	19.4		$	1.9		$	1.7		$	2.7		$	2.6		$	1.2		$	14.9		$	21.3		$	3.8
Net written premiums	5.3			4.2			19.4			1.9			1.7			2.7			2.6			1.2			14.9			21.3			3.8
Net earned premiums	5.1			5.2			4.6			5.1			4.3			4.6			4.2			3.7			23.4			9.7			7.9
Loss and loss adjustment expenses:
Case	0.2			(0.2		)	0.1			(0.1		)	0.2			(0.2		)	—			0.1			—			—			0.1
Portfolio and IBNR	(5.6		)	(1.8		)	0.1			0.1			0.1			(4.0		)	(0.2		)	0.3			(4.5		)	0.2			0.1
Total loss and loss adjustment expenses	(5.4		)	(2.0		)	0.2			—			0.3			(4.2		)	(0.2		)	0.4			(4.5		)	0.2			0.2
Profit commission expense	1.3			3.5			1.0			1.0			0.9			5.1			0.9			0.7			9.3			2.0			1.6
Acquisition costs	0.5			0.6			0.5			0.6			0.4			0.4			0.3			0.3			2.6			1.1			0.6
Operating expenses(1)	0.3			0.3			0.3			0.3			0.3			0.3			0.3			0.3			0.5			0.6			0.6
Total expenses	$	(3.3	)	$	2.4		$	2.0		$	1.9		$	1.9		$	1.7		$	1.3		$	1.7		$	7.9		$	3.9		$	3.1
Underwriting gain	$	8.4		$	2.8		$	2.6		$	3.2		$	2.4		$	2.9		$	2.8		$	2.0		$	15.5		$	5.8		$	4.8
Loss and loss adjustment expense ratio	(105.9		)%	(37.8		)%	4.3		%	—			6.9		%	(92.1		)%	(3.7		)%	9.4		%	(19.2		)%	2.1		%	2.5		%
Expense ratio	40.8		%	84.2		%	39.1		%	37.5		%	37.5		%	129.1		%	36.1		%	36.4		%	53.1		%	38.1		%	36.2		%
Combined ratio	(65.1		)%	46.4		%	43.4		%	37.5		%	44.4		%	37.0		%	32.4		%	45.8		%	33.9		%	40.2		%	38.7		%
Risk in force	$	2,437		$	2,325		$	2,582		$	2,547		$	2,389		$	2,332		$	1,970		$	1,960		$	2,394		$	2,547		$	1,960
Risk written	136			271			419			—			—			—			—			—			237			419			—
Unearned premium reserve net of ceded reinsurance	43.7			42.7			57.5			54.2			51.5			49.7			48.1			45.6			43.5			54.2			45.6

(1)During 2006 the Company implemented a new operating expense methodology to more closely apply expenses to the individual operating segments. This new methodology was based on a comprehensive study and is based on departmental time estimates and headcount. 2005 and 2004 amounts have been restated to show this new methodology on a comparative basis.

Note:Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

10

Assured Guaranty Ltd.
Other Segment
(dollars in millions)

	3Q-04		4Q-04			1Q-05			2Q-05		3Q-05			4Q-05		1Q-06			2Q-06			Six Months 2004			Six Months 2005			Six Months 2006
Income statement:
Gross written premiums	$	5.2	$	3.8		$	0.9		$	9.5	$	21.6		$	0.4	$	3.8		$	0.1		$	(83.6	)	$	10.4		$	3.9
Net written premiums	—		—			—			—		—			—		—			—			(182.5		)	—			—
Net earned premiums	—		—			—			—		—			—		—			—			(48.9		)	—			—
Loss and loss adjustment expenses	—		(0.4		)	(1.1		)	—		(1.3		)	—		(1.2		)	(10.1		)	(49.9		)	(1.1		)	(11.3		)
Profit commission expense	—		—			—			—		—			—		—			—			0.6			—			—
Acquisition costs	—		—			—			—		—			—		—			—			3.7			—			—
Operating expenses	—		—			—			—		—			—		—			—			3.5			—			—
Total expenses	$	—	$	(0.4	)	$	(1.1	)	$	—	$	(1.3	)	$	—	$	(1.2	)	$	(10.1	)	$	(42.0	)	$	(1.1	)	$	(11.3	)
Underwriting gain (loss)	$	—	$	0.4		$	1.1		$	—	$	1.3		$	—	$	1.2		$	10.1		$	(7.1	)	$	1.1		$	11.3
Loss and loss adjustment expense ratio	—		—			—			—		—			—		—			—			102.0		%	—			—
Expense ratio	—		—			—			—		—			—		—			—			(16.1		)%	—			—
Combined ratio	—		—			—			—		—			—		—			—			85.9		%	—			—
Net earned premiums:
Equity layer credit protection	$	—	$	—		$	—		$	—	$	—		$	—	$	—		$	—		$	5.4		$	—		$	—
Trade credit reinsurance	—		—			—			—		—			—		—			—			(25.3		)	—			—
Title reinsurance	—		—			—			—		—			—		—			—			3.3			—			—
Auto residual value reinsurance	—		—			—			—		—			—		—			—			(32.2		)	—			—
Total net earned premiums	$	—	$	—		$	—		$	—	$	—		$	—	$	—		$	—		$	(48.9	)	$	—		$	—
Underwriting gain:
Equity layer credit protection	$	—	$	0.4		$	1.1		$	—	$	1.3		$	—	$	1.2		$	10.1		$	3.0		$	1.1		$	11.3
Trade credit reinsurance	—		—			—			—		—			—		—			—			(2.8		)	—			—
Title reinsurance	—		—			—			—		—			—		—			—			1.0			—			—
Auto residual value reinsurance	—		—			—			—		—			—		—			—			(7.9		)	—			—
Total underwriting gain (loss)	$	—	$	0.4		$	1.1		$	—	$	1.3		$	—	$	1.2		$	10.1		$	(7.1	)	$	1.1		$	11.3

11

Assured Guaranty Ltd.
Loss and LAE Reserves by Segment and Type
(dollars in millions)

	As of		As of
	June 30,		December 31,
	2006		2005
Reserves by segment:
Financial guaranty direct	$	6.6	$	13.1
Financial guaranty reinsurance	86.2		86.3
Mortgage guaranty	7.0		7.0
Other	14.8		14.8
Total	$	114.6	$	121.2

	As of		As of
	June 30,		December 31,
	2006		2005
Reserves by type:
Case	$	38.4	$	45.9
IBNR	11.6		11.6
Portfolio	64.6		63.7
Total	$	114.6	$	121.2

	As of June 30, 2006
	Financial Guaranty Direct		Financial Guaranty Reinsurance		Mortgage Guaranty		Total Financial Guaranty		Other		Total
Reserves by segment and type:
Case	$	—	$	30.9	$	0.3	$	31.2	$	7.2	$	38.4
IBNR	—		—		4.0		4.0		7.6		11.6
Portfolio	6.6		55.3		2.7		64.6		—		64.6
Total	$	6.6	$	86.2	$	7.0	$	99.8	$	14.8	$	114.6
Portfolio reserves associated with CMC credits	$	0.9	$	33.4	—		$	34.3	—		$	34.3

	As of December 31, 2005
	Financial Guaranty Direct		Financial Guaranty Reinsurance		Mortgage Guaranty		Total Financial Guaranty		Other		Total
Reserves by segment and type:
Case	$	4.5	$	33.8	$	0.3	$	38.6	$	7.3	$	45.9
IBNR	—		—		4.1		4.1		7.5		11.6
Portfolio	8.6		52.5		2.6		63.7		—		63.7
Total	$	13.1	$	86.3	$	7.0	$	106.4	$	14.8	$	121.2
Portfolio reserves associated with CMC credits	$	0.6	$	25.7	—		$	26.4	$	—	$	26.4

12

Assured Guaranty Ltd.
Investment Portfolio
as of June 30, 2006
(dollars in millions)

			Pre-Tax				Annualized
	Amortized		Book				Investment
	Cost		Yield		Fair Value		Income
Fixed maturity securities available for sale:
U.S. Treasury securities and obligations of U.S. government agencies	$	135.3	5.0	%	$	133.3	$	6.8
Agency obligations	154.6		5.4	%	155.2		8.3
Foreign government securities	21.4		4.8	%	21.3		1.0
Obligations of states and political subdivisions	324.6		4.8	%	331.4		15.6
Insured obligations of state and political subdivisions	474.2		5.0	%	494.0		23.7
Corporate securities	137.1		5.7	%	137.7		7.8
Mortgage-backed securities:
Pass-thrus	539.9		5.2	%	520.9		28.1
PACs	66.7		4.6	%	63.7		3.1
Asset-backed securities	213.7		4.9	%	211.7		10.5
Total fixed maturity securities available for sale	2,067.5		5.1	%	2,069.2		104.9
Short-term investments	170.7		4.8	%	170.7		8.2
Total investments	$	2,238.2	5.1	%	$	2,239.9	$	113.1

Ratings distribution(1):	Fair Value		%
Treasury and U.S. government obligations	$	133.3	6.4	%
Agency obligations	155.2		7.5	%
AAA/Aaa	1,423.2		68.8	%
AA/Aa	250.7		12.1	%
A/A	106.8		5.2	%
BBB/Baa	—
Total	$	2,069.2	100.0	%
Duration of investment portfolio (in years):			4.3

(1)Ratings are represented by the lower of the Moody’s Investor Services and Standard & Poor’s classifications.

13

Assured Guaranty Ltd.
Financial Guaranty Profile (1 of 3)
(dollars in millions)

	Gross Par Written		As of June 30, 2006:
Sector	2Q 2006		Net Par Outstanding		%		Avg. Rating(7)
U.S. public finance
General obligation	$	391	$	12,203	10.6	%	A+
Tax backed	129		11,112		9.6	%	A+
Municipal utilities	116		9,890		8.6	%	A
Transportation	70		6,263		5.4	%	A
Healthcare	160		5,944		5.1	%	A
Investor-owned utilities	73		1,502		1.3	%	A-
Higher education	105		1,302		1.1	%	A
Housing	1		1,122		1.0	%	AA-
Structured municipal(1)	—		713		0.6	%	AAA
Other public finance(2)	—		737		0.6	%	A
Total U.S. public finance	$	1,044	$	50,787	43.9	%	A+
U.S. structured finance
CDOs(3)	$	5,163	$	25,340	21.9	%	AAA
Mortgage-backed and home equity	3,874		11,564		10.0	%	AA-
Commercial receivables(4)	1,958		5,743		5.0	%	AA
Consumer receivables(5)	24		2,778		2.4	%	AA-
Other structured finance(6)	175		1,734		1.5	%	AA
Single name corporate CDS	—		1		—		AAA
Total U.S. structured finance	$	11,195	$	47,160	40.8	%	AA+
International
Other structured finance	$	704	$	6,140	5.3	%	A+
Public finance	1,628		5,105		4.4	%	A
Infrastructure	87		3,299		2.9	%	A-
CDOs(3)	626		3,119		2.7	%	AAA
Total international	$	3,045	$	17,663	15.3	%	A+
Total exposures	$	15,283	$	115,611	100.0	%	AA-
Mortgage guaranty risk in force	$	—	$	1,960	NA		NA

(1)Structured municipal: includes excess of loss reinsurance on portfolios of municipal credits where the Company attached in excess of the AAA rating level.

(2)Other public finance: primarily includes student loans and government-sponsored project finance.

(3)Collateralized debt obligations (CDOs) are structured financings backed by a pool of debt obligations. These financings are typically structured in multiple tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches.

(4)Commercial receivables: principally includes equipment leases and commercial mortgage-backed securities.

(5)Consumer receivables: principally includes auto loan receivables and credit card receivables.

(6)Other structured finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions.

(7)Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

14

Assured Guaranty Ltd.
Financial Guaranty Profile (2 of 3)
(dollars in millions)

Distribution by ratings of financial guaranty portfolio

	June 30, 2006				December 31, 2005
	Net Par				Net Par
Ratings(1)	Outstanding		%		Outstanding		%
AAA/Aaa	$	43,737	37.8	%	$	34,492	33.7	%
AA/Aa	21,036		18.2	%	19,978		19.5	%
A/A	32,151		27.8	%	30,258		29.5	%
BBB/Baa	17,278		14.9	%	16,405		16.0	%
Below investment grade	1,409		1.3	%	1,332		1.3	%
Total exposures	$	115,611	100.0	%	$	102,465	100.0	%

Distribution by ratings of CDO exposure

	June 30, 2006				December 31, 2005
Ratings(1)	Net Par Outstanding		%		Net Par Outstanding		%
AAA/Aaa	$	25,253	88.7	%	$	19,615	85.3	%
AA/Aa	2,948		10.4	%	2,800		12.2	%
A/A	146		0.5	%	326		1.4	%
BBB/Baa	59		0.2	%	189		0.8	%
Below investment grade	53		0.2	%	63		0.3	%
Total exposures	$	28,459	100.0	%	$	22,993	100.0	%

Distribution of CDOs by year of issue as of June 30, 2006

	Net Par
	Outstanding		%
2000 and prior	$	569	2.0	%
2001	2,221		7.8	%
2002	3,861		13.6	%
2003	3,453		12.1	%
2004	1,532		5.4	%
2005	7,947		27.9	%
2006 year to date	8,877		31.2	%
	$	28,459	100.0	%

Distribution of CDOs by underlying asset type as of June 30, 2006

	Net Par
Asset Type	Outstanding		%
Pooled Corporate Debt Obligations	$	26,511	93.2	%
CDO of ABS	1,841		6.5	%
Emerging Market	107		0.3	%
	$	28,459	100.0	%

(1)Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

15

Assured Guaranty Ltd.
Financial Guaranty Profile (3 of 3)
(dollars in millions)

Geographic distribution of financial guaranty portfolio, as of June 30, 2006

	Net Par
U.S.:	Outstanding		%
California	$	7,567	6.5	%
New York	5,722		4.9	%
Texas	3,323		2.9	%
Illinois	3,168		2.7	%
Florida	2,687		2.3	%
Massachusetts	2,574		2.2	%
Pennsylvania	2,213		1.9	%
New Jersey	2,039		1.8	%
Washington	1,760		1.5	%
Puerto Rico	1,654		1.4	%
Other states	18,080		15.6	%
Mortgage and structured (multiple states)	47,160		40.8	%
Total U.S.	$	97,947	84.7	%
International:
United Kingdom	$	11,463	9.9	%
Australia	954		0.8	%
Turkey	484		0.4	%
Ireland	423		0.4	%
Germany	360		0.3	%
Other	3,979		3.4	%
Total International	$	17,663	15.3	%
Total exposures	$	115,611	100.0	%

16

Assured Guaranty Ltd.
Non-Investment Grade Exposures
as of June 30, 2006

(dollars in millions)

Non-Investment Grade Exposures by:	Weighted Average	Net Par		Average
Asset Type	Remaining Life	Outstanding		Rating(1)
Public finance
Infrastructure	15.2	$	241.0	CC
Transportation	20.0	221.9		B
General obligation	16.7	103.8		BB
Tax backed	16.6	77.7		B+
Healthcare	11.1	60.5		BB
Municipal utilities	10.9	13.4		C
Investor-owned utilities	15.2	7.9		BB
Housing	12.9	4.5		B-
Other public finance	16.3	3.5		D
Total public finance	16.6	$	734.1	B-
Structured finance
Commercial receivables	9.6	$	277.5	B
Consumer receivables	2.6	182.4		BB
Mortgage-backed and home equity	9.9	156.2		CCC-
CDOs	4.6	52.8		B+
Other structured finance	4.5	6.2		D
Total structured finance	7.3	$	675.1	B-
Total non-investment grade exposures	12.2	$	1,409.2	B

Top Ten Non-Investment Grade Exposures as of June 30, 2006

Name or Description	Average Rating	Weighted Average Remaining Life	Net Par Outstanding
Eurotunnel - Fixed-Link Finance & Fixed-Link Finance 2(2)	C	16.4	$	205
Public Finance Domestic Infrastructure Transaction	B	21.7	169
Structured Finance Domestic EETC Transactions(3)	BB	8.1	131
Metris Master Credit Card Trust	BB	2.8	99
Puerto Rico Public Finance Corporation	BB+	17.4	96
Providian Gateway Master Trust(4)	BB+	2.4	79
Structured Finance Domestic Manufactured Housing Transactions(5)	CC	7.3	68
Northwest Airlines EETC Transactions(6)	D	9.1	66
International Airport Facility	BB	7.6	35
Structured Finance Domestic Franchise Loan Receivable Transactions(7)	B	14.5	34
Total	B-	12.3	$	982

(1)Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

(2)Exposure comprised of four series:  $137.7 million, $36.0 million, $25.1 million, and $6.7 million - all rated ‘C’.

(3)Exposure comprised of three series: $42.3 million, $16.1 million, and $73.1million - all rated ‘BB’.

(4)Exposure comprised of two series, one in the amount of $22.5 million rated ‘BB+’ and the other for $56.0 million rated ‘BB+’.

(5)Exposure comprised of seven series: $0.6 million, $1.6 million rated ‘BB’, $1.6 million rated ‘B’, $5.9 million, $8.0 million rated  ‘B-’, and $22.9 million, $27.1 million - rated ‘D’.

(6)Exposure comprised of two series, one in the amount of $14.3 million and the other for $51.5 million both rated ‘D’.

(7)Exposure comprised of two series, one in the amount of $16.2 million and the other for $17.7 million both rated ‘B’.

17

Assured Guaranty Ltd.

Closely Monitored Credits (“CMC”)

(dollars in millions)

Net par outstanding by credit monitoring category(1)

	June 30, 2006
Description	Net Par Outstanding		%		Number of Credits in Category
Fundamentally sound risk	$	114,102	98.7	%
Closely monitored credits:
Category 1	874		0.8	%	38
Category 2	370		0.4	%	19
Category 3	201		0.2	%	17
Category 4	25		—		12
CMC Total	1,470		1.3	%	86
Other below investment grade risk	39		—		76
Total	$	115,611	100.0	%

	December 31, 2005
Description	Net Par Outstanding		%		Number of Credits in Category
Fundamentally sound risk	$	100,951	98.6	%
Closely monitored credits:
Category 1	872		0.9	%	36
Category 2	433		0.4	%	22
Category 3	131		0.1	%	15
Category 4	23		—		11
CMC Total	1,459		1.4	%	84
Other below investment grade risk	55		—		103
Total	$	102,465	100.0	%

(1)Our surveillance department is responsible for monitoring our portfolio of credits and maintains a list of closely monitored credits. The closely monitored credits are divided into four categories: Category 1 (low priority; fundamentally sound, greater than normal risk); Category 2 (medium priority; weakening credit profile, may result in loss); Category 3 (high priority; claim/default probable, case reserve established); Category 4 (claim paid, case reserve established for future payments). The closely monitored credits include all below investment grade (BIG) exposures where there is a material amount of exposure (generally greater than $10.0 million) or a material risk of the Company incurring a loss greater than $0.5 million. The closely monitored credits also include investment grade (IG) risks where credit quality is deteriorating and where, in the view of the Company, there is significant potential that the risk quality will fall below investment grade.

18

Assured Guaranty Ltd.
Largest Exposures by Sector (Part 1 of 2)
as of June 30, 2006
(dollars in millions)

10 Largest U.S. Public Finance Exposures

	Net Par
Revenue Source	Outstanding(2)		Rating(1)
California State General Obligation & Leases	$	884	A
New Jersey State General Obligation & Leases	760		AA-
New York City General Obligation	694		A+
Chicago Illinois General Obligation	685		A+
Long Island Power Authority	683		A-
Denver Colorado Airport System	620		A
Jefferson County Alabama Sewer	578		A
New York City Municipal Water Finance Authority	570		AA
Massachusetts State General Obligation & Bay Transportation	561		AA-
Houston Texas Water & Sewer System	548		A+
Total top 10 public finance exposures	$	6,582

10 Largest U.S. Structured Finance Exposures

	Net Par
Revenue Source	Outstanding(2)		Rating(1)
Structured Finance Corporate Pool	$	914	AAA
Synthetic CDO - IG Corporate	740		AAA
Sandelman Finance 2006-1 Limited	722		AA
Field Point III & IV, Limited	650		AA-
Countrywide Home Equity Loan Trust 2005-J CL 1-A	639		BBB-
Countrywide Home Equity Loan Trust 2005-J CL 2-A	637		BBB-
Park Place 2004-MHQ1 Class A-1	595		AAA
Synthetic CDO - IG ABS	594		AAA
Private - CLO	546		AAA
Private - Mortgage Backed Transaction	500		A
Total top 10 structured finance exposures	$	6,537

(1)Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

(2)Excludes net par in force for transactions insured by a AAA monoline financial guaranty company.

19

Assured Guaranty Ltd.

Largest Exposures by Sector (Part 2 of 2)
as of June 30, 2006
(dollars in millions)

10  Largest Healthcare Exposures

	Net Par
Revenue Source	Outstanding(2)		Rating(1)	State
Ascension Health Credit Group	$	148	AA	MO
Texas Health Resources	147		A+	TX
Catholic Healthcare West	137		A-	CA
Catholic Healthcare Partners	137		AA-	OH
Sutter Health Obligated Group	117		AA-	CA
Medstar Health Inc.	110		BBB	MD
St. Barnabas Health Care System	108		BBB	NJ
Methodist Hospital	102		A+	TX
Christus Health System	100		A+	TX
Adventist / Sunbelt Health System	99		A+	FL
Total top 10 healthcare exposures	$	1,206

10 Largest International Exposures

	Net Par
Revenue Source	Outstanding(2)		Rating(1)
Graphite Mortgages PLC Provide Graphite 2005-2	$	1,163	AAA
Stichting Profile Securitisation I	636		AAA
Synthetic CDO - IG ABS	602		AAA
Northumbrian Water PLC	568		BBB+
Synthetic CDO - IG Corporate	500		AAA
Ballantyne Re PLC Class A-2 Floating Rate Notes	500		A-
Private - CLO	444		AAA
Orkney Re II, PLC Floating Rate Notes	423		A-
National Grid Group PLC	420		A
Private - Whole Business Securitization	276		BBB+
Total top 10 international exposures	$	5,532

(1)Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

(2)Excludes net par in force for transactions insured by a AAA monoline financial guaranty company.

20

Assured Guaranty Ltd.
Consolidated Capital and Claims Paying Resources
(dollars in millions)

	As of June 30, 2006						As of December 31, 2005
	AGC		AG Re(1)		Consolidated		AGC		AG Re(1)		Consolidated
Statutory surplus and reserves
Unearned premium reserve(2)	$	252	$	402	$	654	$	234	$	356	$	590
Contingency reserve	602		—		602		559		—		559
Policyholders’ surplus	276		703		979		296		691		987
Loss & loss adjustment expense reserves(3)	17		22		39		21		26		47
Total policyholders’ surplus & reserves	$	1,147	$	1,127	$	2,274	$	1,110	$	1,073	$	2,182
Claims paying resources
Policyholders’ surplus	$	276	$	703	$	979	$	296	$	691	$	987
Contingency reserve	602		—		602		559		—		559
Qualified statutory capital	878		703		1,581		855		691		1,545
Unearned premium reserve(2)	252		402		654		234		356		590
Loss & loss adjustment expense reserves(3)	17		22		39		21		26		47
Total policyholders’ surplus & reserves	1,147		1,127		2,274		1,110		1,073		2,182
Present value of installment premium(d)	288		189		477		254		174		428
Standby line of credit/stop loss	455		—		455		455		—		455
Total claims paying resources	$	1,890	$	1,316	$	3,206	$	1,819	$	1,247	$	3,065
Net par insured outstanding	$	60,594	$	55,017	$	115,611	$	52,659	$	49,806	$	102,465
Net debt service outstanding	$	78,250	$	82,138	$	160,388	$	70,769	$	74,925	$	145,694
Ratios:
Net par insured to statutory capital	69:1		78:1		73:1		62:1		72:1		66:1
Capital ratio(4)	89:1		117:1		101:1		83:1		108:1		94:1
Financial resources ratio(5)	41:1		62:1		50:1		39:1		60:1		48:1

(1)	AG Re numbers are our estimate of U.S. statutory as the company files Bermuda statutory financial statements.
(2)	Unearned premium reserve for AG Re is U.S. GAAP based and net of prepaid reinsurance premiums.
(3)	Loss & loss adjustment reserves for AG Re is U.S. GAAP based and net of reinsurance recoverable and portfolio reserves.
(4)	Capital ratio is net par and interest insured divided by qualified statutory capital.
(5)	Financial resources ratio is calculated by dividing net par and interest insured by total claims paying resources.
Note:	Please refer to endnotes for explanation of non-GAAP financial measures [net present value of estimated future installment premiums in force (d)].

21

Assured Guaranty Ltd.
Summary Financial and Statistical Data
(dollars in millions, except per share amounts)

				Year Ended December 31,
	YTD 2006			2005			2004			2003			2002			2001
GAAP Summary Income Statement Data
Gross premiums written	$	166.9		$	252.1		$	190.9		$	349.2		$	417.2		$	442.9
Net earned premiums	96.2			198.7			187.9			310.9			247.4			293.5
Net investment income	53.5			96.8			94.8			96.3			97.2			99.5
Total expenses	59.0			64.9			114.6			266.1			218.8			282.8
Income before provision for income taxes	94.5			229.6			233.3			246.2			83.2			110.1
Net income	79.4			188.4			182.8			214.5			72.6			63.8
Operating income	76.7			190.0			141.1			127.3			115.7			96.1
Net income per diluted share	$	1.06		$	2.53		$	2.44		$	2.86		$	0.97		$	0.85
Operating income per diluted share	$	1.03		$	2.55		$	1.88		$	1.70		$	1.54		$	1.28
Financial Ratios
Loss and LAE ratio	(7.2		)%	(35.0		)%	(17.0		)%	46.5		%	48.6		%	60.5		%
Expense ratio	60.2		%	58.9		%	65.4		%	37.2		%	35.5		%	30.6		%
Combined ratio	53.0		%	23.9		%	48.4		%	83.7		%	84.1		%	91.1		%
GAAP Summary Balance Sheet Data (end of period)
Total investments and cash	$	2,269.1		$	2,256.0		$	2,157.9		$	2,222.1		$	2,061.9		$	1,710.8
Total assets	2,735.4			2,689.1			2,694.0			2,857.9			2,719.9			2,322.1
Unearned premium reserves	601.9			537.1			521.3			625.4			613.3			500.3
Loss and LAE reserves	114.6			121.2			226.5			522.6			458.8			401.1
Long-term debt	197.4			197.3			197.4			75.0			75.0			150.0
Shareholders’ equity	1,682.8			1,661.5			1,527.6			1,437.6			1,257.2			1,061.6
Book value per share	$	22.98		$	22.22		$	20.19		$	19.17		$	16.76		$	14.15
Other Financial Information
Net debt service outstanding (end of period)	$	160,388		$	145,694		$	136,120		$	130,047		$	124,082		$	117,909
Net par outstanding (end of period)	115,611			102,465			95,592			87,524			80,394			75,249
Gross par outstanding (end of period)	116,447			105,258			98,221			90,366			83,067			79,883
Consolidated qualified statutory capital	1,581			1,545			1,351			1,216			1,133			1,095
Consolidated policyholders’ surplus & reserves	2,274			2,182			1,990			2,238			1,931			1,664
Ratios:
Par insured to statutory capital	73:1			66:1			71:1			72:1			71:1			69:1
Capital ratio(1)	101:1			94:1			101:1			107:1			110:1			108:1
Financial resources ratio(2)	50:1			48:1			51:1			45:1			41:1			52:1
Debt service written:
U.S. public finance	$	5,432		$	13,335		$	11,943		$	9,628		$	12,957		$	7,304
U.S. structured finance	16,290			16,724			15,131			9,718			12,495			11,893
International	4,929			5,729			3,897			3,822			2,069			2,125
Total debt service written	$	26,651		$	35,788		$	30,970		$	23,168		$	27,522		$	21,321

(1)Capital ratio is net par and interest insured divided by qualified statutory capital.

(2)Financial resources ratio is calculated by dividing net par and interest insured by total claims paying resources.

22

Endnotes related to non-GAAP financial measures discussed in the financial supplement:

(a) Present value of financial guaranty and mortgage guaranty gross premiums or PVP, which is a non-GAAP financial measure, is defined as gross upfront and installment premiums received and the present value of gross estimated future installment premiums, on contracts written in the current period, discounted at 6% per year. We believe PVP is a useful measure for management, equity analysts and investors because it permits the evaluation of the value of new business production for Assured Guaranty by taking into account the value of estimated future installment premiums on new contracts underwritten in a reporting period, which GAAP gross premiums written does not adequately measure. Actual future net earned or written premiums may differ from PVP due to factors such as prepayments, amortizations, refundings, contract terminations or defaults that may or may not be influenced by market interest rates, refinancing or refunding activity, pre-payment speeds, policy changes or terminations, credit defaults, or other factors that management cannot control or predict. This measure should not be viewed as a substitute for gross written premiums determined in accordance with GAAP.

(b) Operating income, which is a non-GAAP financial measure, is defined as net income excluding after-tax realized gains (losses) on investments and after-tax unrealized gains (losses) on derivative financial instruments. We believe operating income is a useful measure for management, equity analysts and investors because the presentation of operating income enhances the understanding of our results of operating by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) on investments and net unrealized gains (losses) on derivative financial instruments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, market interest rates, credit spreads and other factors that management cannot control or predict. This measure should not be viewed as a substitute for net income determined in accordance with GAAP.

(c) Adjusted book value, which is a non-GAAP financial measure, is defined as shareholders’ equity (book value) plus the after-tax value of the financial guaranty and mortgage guaranty unearned premium reserve net of prepaid reinsurance premiums and deferred acquisition costs plus the net present value of estimated future installment premiums in force, less future ceding commissions, after-tax, discounted at 6%. We believe adjusted book value is a useful measure for management equity analysts and investors because the calculation of adjusted book value permits an evaluation of the net present value of the Company’s in-force premiums and capital base. The premiums described above will be earned in future periods, but may differ materially from the estimated amounts used in determining current adjusted book value due to changes in market interest rates, refinancing or refunding activity, pre-payment speeds, policy changes or terminations, credit defaults, and other factors that management cannot control or predict. This measure should not be viewed as a substitute for book value determined in accordance with GAAP.

(d) Net present value of estimated future installment premiums in force, which is a non-GAAP financial measure, is defined as the present value of estimated future financial guaranty and mortgage guaranty installment premiums from our in-force book of business, net of reinsurance and discounted at 6%. We believe net present value of estimated future installment premiums in force is a useful measure for management, equity analysts and investors because it permits an evaluation of the value of future estimated installment premiums. Estimated future premiums may change from period to period due to changes in par outstanding, maturity or other factors that management cannot control or predict that result from market interest rates, refinancing or refunding activity, pre-payment speeds, policy changes or terminations, credit defaults, or other factors. There is no comparable GAAP financial measure.

For adjusted book value, net present value of estimated future installment premiums in force and present value of financial guaranty and mortgage guaranty gross written premiums or PVP we use 6% as the present value discount rate because it is the approximate taxable equivalent yield on our investment portfolio for the periods presented.

	Contacts:
	Equity investors and media
	Sabra Purtill
	Managing Director, Investor Relations
	(212) 408-6044
	spurtill@assuredguaranty.com
	Chris McNamee
	Assistant Vice President, Investor Relations
	(212) 261-5509
	cmcnamee@assuredguaranty.com
	Fixed income investors
	Patrick Early
	Director, Fixed Income Investor Relations
	(212) 408 6043
	pearly@assuredguaranty.com
Assured Guaranty Ltd.
30 Woodbourne Avenue	Michael Walker
Hamilton HM 08	Director, Fixed Income Investor Relations
Bermuda	(212) 261-5575
www.assuredguaranty.com	mwalker@assuredguaranty.com