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) — February 27, 2013

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) 279-5700

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))

1

Item 2.02 Results of Operations and Financial Condition On February 27, 2013, Assured Guaranty Ltd. issued a press release reporting its fourth quarter 2012 results and the availability of its December 31, 2012 financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated by reference herein.

Item 9.01	Financial Statements and Exhibits. (d) Exhibits
Exhibit Number	Description
99.1	Assured Guaranty Ltd. Press Release dated February 27, 2013 reporting fourth quarter 2012 results
99.2	December 31, 2012 Financial Supplement of Assured Guaranty Ltd.

2

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 A. Bailenson            

Name: Robert A. Bailenson

Title: Chief Financial Officer

DATE: February 27, 2013

3

EXHIBIT INDEX

Exhibit Number	Description
99.1	Assured Guaranty Ltd. Press Release dated February 27, 2013 reporting fourth quarter 2012 results
99.2	December 31, 2012 Financial Supplement of Assured Guaranty Ltd.

4

EX-99.1

Assured Guaranty Ltd. Reports Results for Fourth Quarter 2012

• Fourth quarter 2012 operating income¹increased 7% over fourth quarter 2011 to $184 million, or $0.95 per share. Full year 2012 operating income was $535 million, or $2.81 per share, compared with $601 million, or $3.24 per share in 2011.

• Fourth quarter 2012 net income was $74 million, or $0.38 per share, compared with a fourth quarter 2011 net loss of $84 million, or $0.46 per share. The increase was driven primarily by lower non-economic net unrealized losses (which are expected to reverse by contract maturity), and lower loss and loss adjustment expenses. Full year 2012 net income was $110 million, or $0.57 per share, compared with $773 million or $4.16 per share in 2011, declining primarily due to higher non-economic net unrealized losses.

• Operating shareholders' equity per share¹ reached a record level of $30.05, increasing 5% since year-end 2011 in spite of a 6% increase in shares outstanding. Shareholders' equity per share also increased.

• Fourth quarter 2012 new par written was $4.0 billion. This brings full year 2012 new par written plus reassumed par to $36.0 billion, compared with $17.2 billion in full year 2011.

• Insured leverage improved by 12% year over year².

Hamilton, Bermuda, February 27, 2013 - Assured Guaranty Ltd. (NYSE: AGO) (“AGL” and, together with its subsidiaries, “Assured Guaranty” or the “Company”) announced today its financial results for the three-month period ended December 31, 2012 (“fourth quarter 2012”) and the year ended December 31, 2012 (“FY 2012”).

The Company reported operating income for fourth quarter 2012 of $184 million, or $0.95 per diluted share. This represents a 7% increase compared with the three-month period ended December 31, 2011 ("fourth quarter 2011"), due primarily to higher terminations of structured finance exposures, and refundings of public finance exposures. Operating income for FY 2012 was $535 million, or $2.81 per diluted share, compared with $601 million, or $3.24 per diluted share, for the year ended December 31, 2011 ("FY 2011"). The decrease in operating income for FY 2012 compared with FY 2011 was due primarily to the increase in loss expense on Greek sovereign exposures. The Company no longer has exposure to Greek sovereign debt.

Fourth quarter 2012 net income was $74 million, or $0.38 per diluted share, compared with fourth quarter 2011 net loss of $84 million, or $0.46 per diluted share. FY 2012 net income was $110 million, or $0.57 per diluted share, compared with FY 2011 net income of $773 million, or $4.16 per diluted share. The main driver of the changes for the fourth quarter and the full year compared with the respective prior periods was the non-economic net unrealized fair value changes, which are expected to reverse by contract maturity.

“During 2012, Assured Guaranty generated $535 million of operating income and brought operating shareholders' equity per share to a record level,” said Dominic Frederico, President and CEO. “In a difficult operating environment, we created shareholder value through our successful execution of strategic objectives including new direct business production, assumed reinsurance, reassumption of ceded business, R&W recoveries, insurance terminations and purchases of our insured securities for loss mitigation. In addition, in February 2012 we doubled our quarterly dividend to $0.09 per share and further raised it to $0.10 per share in the first quarter of 2013, a total increase of 122% in the last 12 months.” 

¹ These are financial measures that are not in accordance with accounting principles generally accepted in the United States of America (“GAAP”) (“non-GAAP financial measures”). Please see the “Explanation of Non-GAAP Financial Measures” and the tables reconciling the non-GAAP measures to GAAP measures in this press release.

² Insured leverage is ratio of statutory-basis net par outstanding to qualified statutory capital.

1

Table 1: Reconciliation of Net Income (Loss) to Operating Income¹ 

(amounts in millions, except per share amounts)

		Quarter Ended December 31,						Year Ended December 31,
		2012			2011			2012			2011
Net income (loss)		$	74		$	(84	)	$	110		$	773
Less after-tax adjustments:
	Realized gains (losses) on investments	1			(6		)	(4		)	(20		)
	Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(92		)	(265		)	(486		)	244
	Fair value gains (losses) on committed capital securities ("CCS")	(4		)	21			(12		)	23
	Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and loss adjustment expense ("LAE") reserves	1			(1		)	15			(3		)
	Effect of consolidating financial guaranty variable interest entities ("FG VIEs")	(16		)	(5		)	62			(72		)
Operating income		$	184		$	172		$	535		$	601
Net income (loss) per diluted share		$	0.38		$	(0.46	)	$	0.57		$	4.16
Operating income per diluted share		$	0.95		$	0.94		$	2.81		$	3.24
Diluted shares outstanding-GAAP		194.7			182.2			190.7			185.5
Diluted shares outstanding-operating		194.7			183.2			190.7			185.6

__________________

1. The Company adopted and retrospectively applied new guidance that changed the types and amount of insurance costs that may be deferred. This resulted in a reduction of operating income and net income of $1 million and income per share of $0.01 for fourth quarter 2011 and a reduction of operating income and net income of $3 million and income per share of $0.02 for FY 2011.

2

New Business Production

Table 2: Present Value of New Business Production (“PVP”)¹ and Gross Par Written

(amounts in millions)

		Quarter Ended December 31,				Year Ended December 31,
		2012		2011		2012		2011
PVP
Public finance - U.S.
Direct		$	37	$	54	$	144	$	173
Assumed from Radian Asset Assurance Inc.		—		—		22		—
Public finance non - U.S.		—		3		1		3
Structured finance - U.S.		32		31		43		60
Structured finance - non-U.S.		—		—		—		7
	Total PVP	$	69	$	88	$	210	$	243
Gross Par Written:
Public finance - U.S.
Direct		$	3,641	$	4,883	$	14,364	$	15,092
Assumed from Radian Asset Assurance Inc.		—		—		1,797		—
Public finance non - U.S.		—		127		35		127
Structured finance - U.S.		400		582		620		1,673
Structured finance - non-U.S.		—		—		—		—
	Gross par written	$	4,041	$	5,592	$	16,816	$	16,892

__________________

1. PVP is a non-GAAP financial measure. See the “Explanation of Non-GAAP Financial Measures” section of this press release.

Fourth quarter 2012 PVP includes a large life insurance reserve financing in the U.S. structured finance sector. For FY 2012, the Company executed a total of $620 million in par of new structured finance transactions. The size and frequency of structured finance transactions vary significantly from period to period.

The decline in fourth quarter 2012 public finance PVP reflects primarily the low interest environment, tight credit spreads and the ratings uncertainty following Moody's decision to place the financial strength ratings of the Company's U.S. financial guaranty operating subsidiaries on review for downgrade. These conditions also caused a decline in FY 2012 direct PVP, which was partially offset by a new assumed reinsurance contract with Radian Asset Assurance Inc. Despite the challenging interest rate and market environment, the Company maintained average new business credit ratings in the single-A category. In addition, premium rates in fourth quarter 2012 and FY 2012 for public finance were consistent by sector with rates in fourth quarter 2011 and FY 2011.

3

Fourth Quarter 2012 Operating Income Highlights

Table 3 highlights the components of Assured Guaranty's operating income and provides reconciliations of GAAP income statements as reported to non-GAAP operating income results.

Table 3: Reconciliation of GAAP

to Non-GAAP Income Results

(amounts in millions, except per share amounts)

			Quarter Ended December 31, 2012									Quarter Ended December 31, 2011
			GAAP Income Statement As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Results			GAAP Income Statement As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Results
Revenues:
	Net earned premiums		$	218		$	(103	)	$	321		$	225		$	(18	)	$	243
	Net investment income		103			4			99			101			8			93
	Net realized investment gains (losses)		1			—			1			(5		)	(6		)	1
	Net change in fair value of credit derivatives		(119		)	(150		)	31			(295		)	(332		)	37
	Fair value gains (losses) on CCS		(6		)	(6		)	—			32			32			—
	Fair value gains (losses) on FG VIEs		36			36			—			22			22			—
	Other income		(4		)	1			(5		)	(1		)	(2		)	1
		Total revenues	229			(218		)	447			79			(296		)	375
Expenses:
	Loss expense:
		Financial guaranty insurance	64			(44		)	108			149			13			136
		Credit derivatives	—			(19		)	19			—			54			(54		)
	Amortization of deferred acquisition costs		0			—			0			4			—			4
	Interest expense		21			—			21			25			—			25
	Other operating expenses		49			—			49			49			—			49
		Total expenses	134			(63		)	197			227			67			160
Income (loss) before income taxes			95			(155		)	250			(148		)	(363		)	215
Provision (benefit) for income taxes			21			(45		)	66			(64		)	(107		)	43
Income (loss)			$	74		$	(110	)	$	184		$	(84	)	$	(256	)	$	172
Diluted shares			194.7						194.7			182.2						183.2
Earnings per diluted share			$	0.38					$	0.95		$	(0.46	)				$	0.94

4

Components of fourth quarter 2012 operating income are compared with the same items in fourth quarter 2011.

• Net earned premiums: Net earned premiums on an operating income basis increased to $321 million from $243 million in fourth quarter 2011, due primarily to higher terminations and refundings, which were $153 million in fourth quarter 2012 compared with $48 million in fourth quarter 2011. Approximately $94 million in net earned premiums in fourth quarter 2012 was due to terminations, and the remainder was attributable to refundings of public finance transactions, which generally occur more often in low interest rate environments as debt issuers refinance at more attractive rates.

• Credit derivative revenues: Credit derivative revenues included in operating income were $31 million, compared with fourth quarter 2011 credit derivative revenues of $37 million, which were based on a larger portfolio of structured finance business at that time.

• Loss expense:The Company's fourth quarter 2012 loss expense was $127 million ($88 million after tax, or $0.45 per diluted share), compared with $82 million ($48 million after tax, or $0.26 per diluted share) in fourth quarter 2011. The increase was primarily due to higher loss expense in the U.S. residential mortgage-backed securities (“RMBS”) sector.

• Income taxes: The fourth quarter 2012 effective tax rate on operating income was 26.3%, compared with 19.6% in fourth quarter 2011, due to a lower proportion of operating income in Assured Guaranty Re Ltd. in fourth quarter 2012.

5

Full Year 2012 Operating Income Highlights

Table 4 highlights the components of Assured Guaranty's operating income and provides reconciliations of GAAP income statements as reported to non-GAAP operating income results.

Table 4: Reconciliation of GAAP

to Non-GAAP Income Results

(amounts in millions, except per share amounts)

			Year Ended December 31, 2012								Year Ended December 31, 2011
			GAAP Income Statement As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Results		GAAP Income Statement As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Results
Revenues:
	Net earned premiums		$	853		$	(153	)	$	1,006	$	920		$	(75	)	$	995
	Net investment income		404			14			390		396			3			393
	Net realized investment gains (losses)		1			(6		)	7		(18		)	(18		)	0
	Net change in fair value of credit derivatives		(585		)	(712		)	127		560			372			188
	Fair value gains (losses) on CCS		(18		)	(18		)	—		35			35			—
	Fair value gains (losses) on FG VIEs		210			210			—		(132		)	(132		)	—
	Other income		108			11			97		58			18			40
		Total revenues	973			(654		)	1,627		1,819			203			1,616
Expenses:
	Loss expense:
		Financial guaranty insurance	523			(45		)	568		462			(93		)	555
		Credit derivatives	—			(28		)	28		—			62			(62		)
	Amortization of deferred acquisition costs		14			—			14		17			—			17
	Interest expense		92			—			92		99			—			99
	Other operating expenses		212			—			212		212			—			212
		Total expenses	841			(73		)	914		790			(31		)	821
Income (loss) before income taxes			132			(581		)	713		1,029			234			795
Provision (benefit) for income taxes			22			(156		)	178		256			62			194
Income (loss)			$	110		$	(425	)	$	535	$	773		$	172		$	601
Diluted shares			190.7						190.7		185.5						185.6
Earnings per diluted share			$	0.57					$	2.81	$	4.16					$	3.24

6

Components of FY 2012 operating income are compared with the same items in FY 2011.

• Net earned premiums: Net earned premiums in FY 2012 operating income increased to $1,006 million, from $995 million in FY 2011, due primarily to higher terminations and refundings, which generated $331 million in FY 2012, compared with $125 million in FY 2011. Approximately $122 million in net earned premiums in FY 2012 was due to terminations, and the remainder was attributable to refundings of public finance transactions. The increase was offset in part by a decline in the inforce book of business, in particular structured finance.

• Credit derivative revenues: Credit derivative revenues included in FY 2012 operating income were $127 million. The comparable FY 2011 credit derivative revenues were $188 million, which was based on a larger portfolio of structured finance business at that time.

• Other Income: Other Income in FY 2012 operating income increased to $97 million from $40 million in FY 2011, primarily due to commutation gains related to the reassumption of previously ceded books of business from two reinsurers.

• Loss expense:The Company's FY 2012 loss expense was $596 million ($424 million after tax, or $2.22 per diluted share), compared with $493 million ($347 million after tax, or $1.87 per diluted share) in FY 2011. The increase was primarily due to higher loss expense on Greek sovereign exposures. The Company has no further exposure to Greek sovereign debt.

• Income taxes: FY 2012 effective tax rate on operating income was 25.0%, compared with 24.4% in FY 2011.

7

Economic Loss Development

Economic loss development represents the change in net expected loss to be paid attributable to all factors other than loss and LAE payments. It includes the effects of changes in assumptions based on observed market trends, changes in discount rates, accretion of discount and the economic effects of loss mitigation efforts. Economic loss development is the principal measure that Assured Guaranty uses to evaluate the loss experience in its insured portfolio. Expected loss to be paid includes all transactions insured by the Company, whether written in insurance or credit derivative form, regardless of the accounting model prescribed under GAAP. Table 5 provides a roll forward of net expected loss to be paid.

Table 5: Roll Forward of Net Expected Loss to be Paid on

Insurance Contracts and Credit Derivatives

(amounts in millions)

Quarter Ended December 31, 2012

Insurance Contracts and Credit Derivatives		Net Expected Loss to be Paid as of September 30, 2012			Economic Loss Development During Fourth Quarter 2012			Loss (Paid) Recovered Fourth Quarter 2012			Net Expected Loss to be Paid as of December 31, 2012
Before recoveries for breaches of representations and warranties ("R&W"):
	U.S. RMBS	$	1,704		$	168		$	(220	)	$	1,652
	Other	424			(14		)	(12		)	398
Total before recoveries for breaches of R&W		2,128			154			(232		)	2,050
R&W for U.S. RMBS		(1,371		)	(70		)	71			(1,370		)
Total, net of R&W		757			84			(161		)	680
Other		(4		)	(11		)	12			(3		)
	Total	$	753		$	73		$	(149	)	$	677

Year Ended December 31, 2012

Insurance Contracts and Credit Derivatives		Net Expected Loss to be Paid as of December 31, 2011			Economic Loss Development During Year Ended 2012 (1)			Loss (Paid) Recovered Year Ended 2012			Net Expected Loss to be Paid as of December 31, 2012
Before recoveries for breaches of R&W:
	U.S. RMBS	$	2,281		$	367		$	(996	)	$	1,652
	Other	473			267			(342		)	398
Total before recoveries for breaches of R&W		2,754			634			(1,338		)	2,050
R&W for U.S. RMBS		(1,650		)	(179		)	459			(1,370		)
Total, net of R&W		1,104			455			(879		)	680
Other		2			(17		)	12			(3		)
	Total	$	1,106		$	438		$	(867	)	$	677

__________________

1. Includes $12 million of foreign exchange remeasurement.

Fourth Quarter 2012:

Total economic loss development was $73 million ($53 million after tax) in fourth quarter 2012, which was primarily driven by higher LAE and development in U.S. RMBS exposures. R&W development was $70 million in fourth quarter 2012 due in part to the favorable judgment received on the Flagstar Bank litigation (subject to appeal) and the settlement of a transaction with another R&W provider.

8

Full Year 2012:

Total economic loss development was $438 million ($319 million after tax) for FY 2012, which was driven primarily by the Company's troubled European exposures (in particular the loss on Greek sovereign exposures and loss development on Spanish sub-sovereign exposures), and loss development on U.S. RMBS exposures.

Book Value Measurements

The primary drivers of the year-to-date increase in shareholders' equity, operating shareholders' equity and adjusted book value were the issuance of common shares as described below and the reassumptions of previously ceded business, both of which were offset in part by loss development, dividends and share repurchases. Shareholders' equity was also affected by net fair value losses on credit derivatives and gains related to FG VIEs, which do not affect operating shareholders' equity or adjusted book value. PVP and the additional future earnings from the reassumption of previously ceded books of business, increased adjusted book value, which includes the estimated future earnings on the Company's in-force book of business.

Per share amounts were affected by an additional 13.4 million common shares outstanding following the issuance of common shares to settle forward purchase contracts that constituted a portion of the Company's 2009 equity units. The purchase price was $12.85 per share, for a total of $173 million. This was offset in part by the repurchase of 2.1 million common shares at an average price of $11.76 per share, or $24 million.

Table 6: Reconciliation of Shareholders' Equity to

Operating Shareholders' Equity and Adjusted Book Value¹ 

(amounts in millions, except per share amounts)

		As of
		December 31, 2012			December 31, 2011
Shareholders' equity		$	4,994		$	4,652
Less after-tax adjustments:
	Effect of consolidating FG VIEs	(348		)	(405		)
	Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(988		)	(498		)
	Fair value gains (losses) on CCS	23			35
	Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	477			319
Operating shareholders' equity		5,830			5,201
After-tax adjustments:
	Less: Deferred acquisition costs	165			174
	Plus: Net present value of estimated net future credit derivative revenue	220			302
	Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,266			3,658
Adjusted book value		$	9,151		$	8,987
Shares outstanding at the end of the period		194.0			182.2
Per share:
	Shareholders' equity	$	25.74		$	25.52
	Operating shareholders' equity	$	30.05		$	28.54
	Adjusted book value	$	47.17		$	49.32

__________________

1. Operating shareholders' equity and adjusted book value are non-GAAP financial measures. See the "Explanation of Non-GAAP Financial Measures" section of the press release.

9

Share Repurchase Program and Dividends

On January 18, 2013, the Company's Board of Directors authorized a $200 million share repurchase program. This repurchase program replaces the prior authorization. In addition, on February 7, 2013, the Company increased its 2013 quarterly dividend by 11% to $0.10 per share.

10

Conference Call and Webcast Information:

The Company will host a conference call for investors at 8:00 a.m. Eastern Time (9:00 a.m. Atlantic Time) on Thursday, February 28, 2013. The conference call will be available via live and archived webcast in the Investor Information section of the Company's website at assuredguaranty.com or by dialing 1-888-317-6016 (in the U.S.) or 1-412-317-6016 (International). A replay of the call will be available through April 29, 2013. To listen to the replay, dial 1-877-344-7529 (in the U.S.) or 1-412-317-0088 (International), passcode 10024950. The replay will be available one hour after the conference call ends.

Please refer to Assured Guaranty's December 31, 2012 Financial Supplement, which is posted on the Company's website at assuredguaranty.com/investor-information/by-company/assured-guaranty-ltd/financial-information, for more information on the Company's financial guaranty portfolios, investment portfolio and other items. The Company is also posting on the same page of its website:

• “Public Finance Transactions in 4Q 2012,” which lists the new issue U.S. public finance transactions sold in fourth quarter 2012 that the Company has insured, and

• “Structured Finance Transactions at December 31, 2012,” which lists the Company's structured finance exposure as of that date.

In addition, the Company is posting at assuredguaranty.com/presentations the “December 31, 2012 Equity Investor Presentation.” Furthermore, the Company's separate-company subsidiary financial supplements and its Fixed Income Presentation for the current quarter will be posted on the Company's website when available. Those documents and the links to those documents will be furnished in a Current Report on Form 8-K.

# # #

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

11

Assured Guaranty Ltd.

Consolidated Statements of Operations (unaudited)

(amounts in millions)

				Quarter Ended December 31,						Year Ended December 31,
				2012			2011			2012			2011
Revenues:
	Net earned premiums			$	218		$	225		$	853		$	920
	Net investment income			103			101			404			396
	Net realized investment gains (losses)			1			(5		)	1			(18		)
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		(30		)	(19		)	(108		)	6
		Net unrealized gains (losses)		(89		)	(276		)	(477		)	554
			Net change in fair value of credit derivatives	(119		)	(295		)	(585		)	560
	Fair value gains (losses) on CCS			(6		)	32			(18		)	35
	Fair value gains (losses) on FG VIEs			36			22			210			(132		)
	Other income			(4		)	(1		)	108			58
Total revenues				229			79			973			1,819
Expenses
	Loss and LAE			64			149			523			462
	Amortization of deferred acquisition costs			0			4			14			17
	Interest expense			21			25			92			99
	Other operating expenses			49			49			212			212
Total expenses				134			227			841			790
Income (loss) before income taxes				95			(148		)	132			1,029
Provision (benefit) for income taxes				21			(64		)	22			256
Net income (loss)				74			(84		)	110			773
Less after-tax adjustments:
	Realized gains (losses) on investments			1			(6		)	(4		)	(20		)
	Non-credit impairment unrealized fair value gains (losses) on credit derivatives			(92		)	(265		)	(486		)	244
	Fair value gains (losses) on CCS			(4		)	21			(12		)	23
	Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves			1			(1		)	15			(3		)
	Effect of consolidating FG VIEs			(16		)	(5		)	62			(72		)
Operating income				$	184		$	172		$	535		$	601

12

Assured Guaranty Ltd.

Consolidated Balance Sheets

(amounts in millions)

			As of
			December 31, 2012		December 31, 2011
Assets
	Investment portfolio:
		Fixed maturity securities, available-for-sale, at fair value	$	10,056	$	10,142
		Short-term investments, at fair value	817		734
		Other invested assets	212		223
Total investment portfolio			11,085		11,099
	Cash		138		215
	Premiums receivable, net of ceding commissions payable		1,005		1,003
	Ceded unearned premium reserve		561		709
	Deferred acquisition costs		116		132
	Reinsurance recoverable on unpaid losses		58		69
	Salvage and subrogation recoverable		456		368
	Credit derivative assets		141		153
	Deferred tax asset, net		721		804
	Current income tax receivable		1		76
	FG VIE assets, at fair value		2,688		2,819
	Other assets		272		262
Total assets			$	17,242	$	17,709
Liabilities and shareholders' equity
Liabilities
	Unearned premium reserve		$	5,207	$	5,963
	Loss and LAE reserve		601		679
	Reinsurance balances payable, net		219		171
	Long-term debt		836		1,038
	Credit derivative liabilities		1,934		1,457
	FG VIE liabilities with recourse, at fair value		2,090		2,397
	FG VIE liabilities without recourse, at fair value		1,051		1,061
	Other liabilities		310		291
Total Liabilities			12,248		13,057
Shareholders' equity
	Common stock		2		2
	Additional paid-in capital		2,724		2,570
	Retained earnings		1,749		1,708
	Accumulated other comprehensive income		515		368
	Deferred equity compensation		4		4
Total shareholders' equity			4,994		4,652
Total liabilities and shareholders' equity			$	17,242	$	17,709

13

Explanation of Non-GAAP Financial Measures:

The Company references financial measures that are not in accordance with GAAP. Management and the board of directors utilize non-GAAP measures in evaluating the Company's financial performance and as a basis for determining senior management incentive compensation. By providing these non-GAAP financial measures, investors, analysts and financial news reporters have access to the same information that management reviews internally. In addition, Assured Guaranty's presentation of non-GAAP financial measures is consistent with how analysts calculate their estimates of Assured Guaranty's financial results in their research reports on Assured Guaranty and with how investors, analysts and the financial news media evaluate Assured Guaranty's financial results.

The following paragraphs define each non-GAAP financial measure and describe why it is useful. A reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure, if available, is presented herein. Non-GAAP financial measures should not be viewed as substitutes for their most directly comparable GAAP measures.

Operating Income: Management believes that operating income is a useful measure because it clarifies the understanding of the underwriting results of the Company's financial guaranty insurance business, and also includes financing costs and net investment income, and enables investors and analysts to evaluate the Company's financial results as compared with the consensus analyst estimates distributed publicly by financial databases. Operating income is defined as net income (loss) attributable to AGL, as reported under GAAP, adjusted for the following:

1) Elimination of the after-tax realized gains (losses) on the Company's investments, except for gains and losses on securities classified as trading. The timing of realized gains and losses, which depends largely on market credit cycles, can vary considerably across periods. The timing of sales is largely subject to the Company's discretion and influenced by market opportunities, as well as the Company's tax and capital profile. Trends in the underlying profitability of the Company's business can be more clearly identified without the fluctuating effects of these transactions.

2) Elimination of the after-tax non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount in excess of the present value of the expected estimated economic credit losses and non-economic payments. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss. Additionally, such adjustments present all financial guaranty contracts on a more consistent basis of accounting, whether or not they are subject to derivative accounting rules.

3) Elimination of the after-tax fair value gains (losses) on the Company's CCS. Such amounts are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

4) Elimination of the after-tax foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables constitute a significant portion of the net premium receivable balance and represent the present value of future contractual or expected collections. Therefore, the current period's foreign exchange remeasurement gains (losses) are not necessarily indicative of the total foreign exchange gains (losses) that the Company will ultimately recognize.

5) Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.

Operating Shareholders' Equity: Management believes that operating shareholders' equity is a useful measure because it presents the equity of Assured Guaranty Ltd. with all financial guaranty contracts accounted for on a more consistent basis and excludes fair value adjustments that are not expected to result in economic loss. Many investors, analysts and financial news reporters use operating shareholders' equity as the principal financial measure for valuing Assured Guaranty Ltd.'s current share price or projected share price and also as the basis of their decision to recommend buying or selling Assured Guaranty Ltd.'s common shares. Many of the Company's fixed income investors also use operating shareholders' equity to evaluate the Company's capital adequacy. Operating shareholders' equity is the basis of the calculation of adjusted book value (see below). Operating shareholders' equity is defined as shareholders' equity attributable to AGL, as reported under GAAP, adjusted for the following:  

14

1) Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.

2) Elimination of the after-tax non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount in excess of the present value of the expected estimated economic credit losses and non-economic payments. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

3) Elimination of the after-tax fair value gains (losses) on the Company's CCS. Such amounts are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

4) Elimination of the after-tax unrealized gains (losses) on the Company's investments that are recorded as a component of accumulated other comprehensive income (“AOCI”) (excluding foreign exchange remeasurement). The AOCI component of the fair value adjustment on the investment portfolio is not deemed economic because the Company generally holds these investments to maturity and therefore should not recognize an economic gain or loss.

Adjusted Book Value: Management believes that adjusted book value is a useful measure because it enables an evaluation of the net present value of the Company's in-force premiums and revenues in addition to operating shareholders' equity. The premiums and revenues included in adjusted book value will be earned in future periods, but actual earnings may differ materially from the estimated amounts used in determining current adjusted book value due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults and other factors. Many investors, analysts and financial news reporters use adjusted book value to evaluate Assured Guaranty Ltd.'s share price and as the basis of their decision to recommend, buy or sell Assured Guaranty Ltd. common shares. Adjusted book value is operating shareholders' equity, as defined above, further adjusted for the following: 

1) Elimination of after-tax deferred acquisition costs, net. These amounts represent net deferred expenses that have already been paid or accrued and will be expensed in future accounting periods.

2) Addition of the after-tax net present value of estimated net future credit derivative revenue. See below.

3) Addition of the after-tax value of the unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed, net of reinsurance. This amount represents the expected future net earned premiums, net of expected losses to be expensed, which are not reflected in GAAP equity.

Net Present Value of Estimated Net Future Credit Derivative Revenue: Management believes that this amount is a useful measure because it enables an evaluation of the value of future estimated credit derivative revenue. There is no corresponding GAAP financial measure.This amount represents the present value of estimated future revenue from the Company's credit derivative in-force book of business, net of reinsurance, ceding commissions and premium taxes for contracts without expected economic losses, and is discounted at 6%. Estimated net future credit derivative revenue may change from period to period due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults or other factors that affect par outstanding or the ultimate maturity of an obligation.

PVP or Present Value of New Business Production: Management believes that PVP is a useful measure because it enables the evaluation of the value of new business production for the Company by taking into account the value of estimated future installment premiums on all new contracts underwritten in a reporting period as well as premium supplements and additional installment premium on existing contracts as to which the issuer has the right to call the insured obligation but has not exercised such right,  whether in insurance or credit derivative contract form, which GAAP gross premiums written and the net credit derivative premiums received and receivable portion of net realized gains and other settlements on credit derivatives (“Credit Derivative Revenues”) do not adequately measure. PVP in respect of financial guaranty contracts written in a specified period is defined as gross upfront and installment premiums received and the present value of gross estimated future installment premiums, in each case, discounted at 6% . For purposes of the PVP calculation, management discounts estimated future installment premiums on insurance contracts at 6%, while under GAAP, these amounts are discounted at a risk-free rate. Additionally, under GAAP, management records future installment premiums on financial guaranty insurance contracts covering non-homogeneous pools of assets based on the contractual term of the transaction, whereas for PVP purposes, management records an estimate of the future installment premiums the Company expects to receive, which may be based upon a shorter period of time than the contractual term of the transaction. Actual

15

future net earned or written premiums and Credit Derivative Revenues may differ from PVP due to factors including, but not limited to, changes in foreign exchange rates, prepayment speeds, terminations, credit defaults, or other factors that affect par outstanding or the ultimate maturity of an obligation.

Reconciliation of PVP to Gross Written Premiums

(amounts in millions)

		Quarter Ended December 31,				Year Ended December 31,
		2012		2011		2012		2011
Total PVP		$	69	$	88	$	210	$	243
	Less: financial guaranty installment premium PVP	33		33		45		69
Total: financial guaranty upfront gross written premiums		36		55		165		174
	Plus: financial guaranty installment gross written premiums1	73		45		88		(47		)
Total gross written premiums		$	109	$	100	$	253	$	127

__________________

1. Represents present value of new business on installment policies plus gross written premiums adjustment on existing installment policies due to changes in assumptions and any cancellations of assumed reinsurance contracts.

Statutory Basis Net Par Outstanding: Under statutory accounting, the net par outstanding would be reduced both when an outstanding issue is legally defeased (i.e., an issuer has legally discharged its obligations with respect to a municipal security by satisfying conditions set forth in defeasance provisions contained in transaction documents and is no longer responsible for the payment of debt service with respect to such obligations) and when such issue is economically defeased (i.e., transaction documents for a municipal security do not contain defeasance provisions but the issuer establishes an escrow account with U.S. government securities in amounts sufficient to pay the refunded bonds when due; the refunded bonds are not considered paid and continue to be outstanding under the transaction documents and the issuer remains responsible to pay debt service when due to the extent monies on deposit in the escrow account are insufficient for such purpose).

Qualified Statutory Capital: Qualified statutory capital is calculated as the sum of statutory policyholders' surplus and statutory contingency reserve.

16

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, Assured Guaranty's calculations of adjusted book value, PVP, net present value of estimated future installment premiums in force and total estimated net future premium earnings and statements regarding its capital position and demand for its insurance and other forward-looking statements could be affected by a rating agency action, including a ratings downgrade, a change in outlook, the placement of ratings on watch for downgrade, or a change in rating criteria, at any time, of Assured Guaranty or any of its subsidiaries and/or of transactions that Assured Guaranty's subsidiaries have insured, developments in the world's financial and capital markets that adversely affect the demand for the Company's insurance, issuers' payment rates, Assured Guaranty's loss experience, its exposure to refinancing risk in transactions (which could result in substantial liquidity claims on its guaranties), its access to capital, its unrealized (losses) gains on derivative financial instruments or its investment returns, changes in the world's credit markets, segments thereof or general economic conditions, the impact of rating agency action with respect to sovereign debt and the resulting effect on the value of securities in the Company's investment portfolio and collateral posted by and to the Company, more severe or frequent losses impacting the adequacy of Assured Guaranty's expected loss estimates, the impact of market volatility on the mark-to-market of the Company's contracts written in credit default swap form, reduction in the amount of insurance opportunities available to the Company, deterioration in the financial condition of the Company's reinsurers, the amount and timing of reinsurance recoverables actually received, the risk that reinsurers may dispute amounts owed to the Company under its reinsurance agreements, failure of Company to realize insurance loss recoveries or damages expected from originators, sellers, sponsors, underwriters or servicers of residential mortgage-backed securities transactions through loan putbacks, settlement negotiations or litigation, the possibility that budget shortfalls or other factors will result in credit losses or impairments on obligations of state and local governments that the Company insures or reinsures, increased competition, including from new entrants into the financial guaranty industry, changes in accounting policies or practices, changes in laws or regulations, other governmental actions, difficulties with the execution of Assured Guaranty's business strategy, contract cancellations, loss of key personnel, adverse technological developments, the effects of mergers, acquisitions and divestitures, natural or man-made catastrophes, other risks and uncertainties that have not been identified at this time, management's response to these factors, and other risk factors identified in Assured Guaranty's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of February 27, 2013, and Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

17

Contact Information:

Robert Tucker

Managing Director, Investor Relations and Corporate Communications

212-339-0861

rtucker@assuredguaranty.com

Ashweeta Durani

Vice President, Corporate Communications

212-408-6042

adurani@assuredguaranty.com

18

EX-99.2

Assured Guaranty Ltd.

December 31, 2012

Financial Supplement

Table of Contents		Page
	Selected Financial Highlights	1
	Consolidated Statements of Operations (unaudited)	2
	Net Income (Loss) Reconciliation to Operating Income	3
	Consolidated Balance Sheets	5
	Adjusted Book Value	6
	Claims Paying Resources	7
	New Business Production	8
	Financial Guaranty Gross Par Written	9
	New Business Production by Quarter	10
	Available-for-Sale Investment Portfolio and Cash	11
	Estimated Net Exposure Amortization and Estimated Future Net Premium and Credit Derivative Revenues	12
	Expected Amortization of Net Par Outstanding	13
	Present Value of Financial Guaranty Insurance Net Expected Loss to be Expensed	14
	Financial Guaranty Profile	15
	Direct Pooled Corporate Obligations Profile	19
	Consolidated U.S. RMBS Profile	20
	Direct U.S. RMBS Profile	21
	Direct U.S. Commercial Real Estate Profile	23
	Direct U.S. Consumer Receivables Profile	24
	Below Investment Grade Exposures	25
	Largest Exposures by Sector	30
	Rollforward of Net Expected Loss and Loss Adjustment Expenses to be Paid	34
	Financial Guaranty Insurance and Credit Derivative U.S. RMBS Representations and Warranties Benefit Development	35
	Losses Incurred	36
	Effect of Adoption of New Accounting Guidance on Acquisition Costs	37
	Summary Financial and Statistical Data	38
	Glossary	39
	Non-GAAP Financial Measures	42

This financial supplement should be read in conjunction with documents filed by Assured Guaranty Ltd. (‘‘AGL’’ and, together with its subsidiaries, ‘‘Assured Guaranty’’ or the ‘‘Company’’) with the Securities and Exchange Commission (‘‘SEC’’), including its Annual Report on Form 10-K for the year ended December 31, 2012.

Some amounts in this financial supplement may not add due to rounding.

Cautionary Statement Regarding Forward Looking Statements:

Any forward looking statements made in this supplement reflect the current views of Assured Guaranty with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Assured Guaranty's forward looking statements could be affected by many events. These events include (1) rating agency action, including a ratings downgrade, a change in outlook, the placement of ratings on watch for downgrade, or a change in rating criteria, at any time, of Assured Guaranty or any of its subsidiaries and/or of transactions that Assured Guaranty’s subsidiaries have insured; (2) developments in the world’s financial and capital markets that adversely affect the demand for the Company's insurance, issuers’ payment rates, Assured Guaranty’s loss experience, its exposure to refinancing risk in transactions (which could result in substantial liquidity claims on its guarantees), its access to capital, its unrealized (losses) gains on derivative financial instruments or its investment returns; (3) changes in the world’s credit markets, segments thereof or general economic conditions; (4) the impact of rating agency action with respect to sovereign debt and the resulting effect on the value of securities in the Company's investment portfolio and collateral posted by and to the Company; (5) more severe or frequent losses impacting the adequacy of Assured Guaranty’s expected loss estimates; (6) the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; (7) reduction in the amount of insurance opportunities available to Assured Guaranty; (8) deterioration in the financial condition of Assured Guaranty's reinsurers, the amount and timing of reinsurance recoverables actually received and the risk that reinsurers may dispute amounts owed to Assured Guaranty under its reinsurance agreements; (9) failure of Assured Guaranty to realize insurance loss recoveries or damages expected from originators, sellers, sponsors, underwriters or servicers of residential mortgage-backed securities transactions through loan putbacks, settlement negotiations or litigation; (10) the possibility that budget shortfalls or other factors will result in credit losses or impairments on obligations of state and local governments that the Company insures or reinsures; (11) increased competition, including from new entrants into the financial guaranty industry; (12) changes in applicable accounting policies or practices; (13) changes in applicable laws or regulations, including insurance and tax laws; (14) other governmental actions; (15) difficulties with the execution of Assured Guaranty’s business strategy; (16) contract cancellations; (17) loss of key personnel; (18) adverse technological developments; (19) the effects of mergers, acquisitions and divestitures; (20) natural or man-made catastrophes; (21) other risks and uncertainties that have not been identified at this time; (22) management’s response to these factors; and (23) other risk factors identified in Assured Guaranty’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the dates on which they are made. Assured Guaranty undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Assured Guaranty Ltd.

Selected Financial Highlights

(dollars in millions, except per share amounts)

			Three Months Ended						Year Ended
			December 31,						December 31,
			2012			2011			2012			2011
Operating income reconciliation:
	Operating income		$	184		$	172		$	535		$	601
	Plus after-tax adjustments:
		Realized gains (losses) on investments	1			(6		)	(4		)	(20		)
		Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(92		)	(265		)	(486		)	244
		Fair value gains (losses) on committed capital securities	(4		)	21			(12		)	23
		Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and loss adjustment expense ("LAE") reserves	1			(1		)	15			(3		)
		Effect of consolidating financial guaranty variable interest entities ("FG VIEs")	(16		)	(5		)	62			(72		)
	Net Income		$	74		$	(84	)	$	110		$	773
Earnings per diluted share:
	Operating income		$	0.95		$	0.94		$	2.81		$	3.24
	Plus after-tax adjustments:
		Realized gains (losses) on investments	0.00			(0.04		)	(0.02		)	(0.11		)
		Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(0.47		)	(1.45		)	(2.55		)	1.31
		Fair value gains (losses) on committed capital securities	(0.02		)	0.11			(0.06		)	0.12
		Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	0.01			(0.01		)	0.08			(0.02		)
		Effect of consolidating FG VIEs	(0.08		)	(0.03		)	0.31			(0.39		)
	Net income (loss)		$	0.38		$	(0.46	)	$	0.57		$	4.16
		Effective tax rate on operating income	26.3		%	19.6		%	25.0		%	24.4		%
		Effective tax rate on net income	21.5		%	43.0		%	16.5		%	24.9		%
Return on equity ("ROE") calculations (1)(2):
	ROE, excluding unrealized gain (loss) on investment portfolio		6.6		%	(7.7		)%	2.5		%	19.6		%
	Operating ROE		12.9		%	13.5		%	9.7		%	12.2		%
New Business:
		Gross par written	$	4,041		$	5,592		$	16,816		$	16,892
		Present value of new business production ("PVP") (3)	$	69		$	88		$	210		$	243
									As of
									December 31,			December 31,
Other information:									2012			2011
		Net debt service outstanding							$	782,180		$	845,665
		Net par outstanding							519,893			558,048
		Claims paying resources (4)							12,328			12,839

1) Effective January 1, 2012, the Company adopted, and applied retroactively, new guidance on acquisition costs. See page 37 for the effect of that adoption on prior periods' results.

2) Quarterly ROE calculations represent annualized returns.

3) Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

4) See page 7 for additional detail on claims paying resources.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

1

Assured Guaranty Ltd.

Consolidated Statements of Operations (unaudited)

(dollars in millions, except per share amounts)

				Three Months Ended						Year Ended
				December 31,						December 31,
				2012			2011 (1)			2012			2011 (1)
Revenues:
	Net earned premiums			$	218		$	225		$	853		$	920
	Net investment income			103			101			404			396
	Net realized investment gains (losses)			1			(5		)	1			(18		)
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		(30		)	(19		)	(108		)	6
		Net unrealized gains (losses)		(89		)	(276		)	(477		)	554
			Net change in fair value of credit derivatives	(119		)	(295		)	(585		)	560
	Fair value gains (losses) on committed capital securities			(6		)	32			(18		)	35
	Fair value gains (losses) on FG VIEs			36			22			210			(132		)
	Other income			(4		)	(1		)	108			58
			Total revenues	229			79			973			1,819
Expenses:
	Loss and loss adjustment expenses			64			149			523			462
	Amortization of deferred acquisition costs			0			4			14			17
	Interest expense			21			25			92			99
	Other operating expenses			49			49			212			212
		Total expenses		134			227			841			790
Income (loss) before income taxes				95			(148		)	132			1,029
	Provision (benefit) for income taxes			21			(64		)	22			256
Net income (loss)				$	74		$	(84	)	$	110		$	773
Less after-tax adjustments:
	Realized gains (losses) on investments			1			(6		)	(4		)	(20		)
	Non-credit impairment unrealized fair value gains (losses) on credit derivatives			(92		)	(265		)	(486		)	244
	Fair value gains (losses) on committed capital securities			(4		)	21			(12		)	23
	Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves			1			(1		)	15			(3		)
	Effect of consolidating FG VIEs			(16		)	(5		)	62			(72		)
Operating income				$	184		$	172		$	535		$	601
Weighted average shares outstanding
	Basic shares outstanding			194.0			182.2			189.2			183.4
	Diluted shares outstanding (2)			194.7			182.2			190.7			185.5
	Shares outstanding at the end of period (3)			194.0			182.2
Effect of refundings and terminations, net
	Net earned premiums from refundings and terminations			$	153		$	48		$	331		$	125
	Operating income effect			100			33			216			86
	Operating income per diluted share effect			0.52			0.18			1.13			0.46

1) Effective January 1, 2012, the Company adopted, and applied retroactively, new guidance on acquisition costs. See page 37 for the effect of that adoption on prior periods' results.

2) Non-GAAP diluted shares outstanding were 194.7 million and 183.2 million for the three months ended December 31, 2012 and 2011, respectively and $190.7 million and 185.5 million for the year ended December 31, 2012 and December 31, 2011, respectively.

3) On June 1, 2012, AGL issued 13.4 million common shares in connection with the 3,450,000 equity units it issued in June 2009. Each of the equity units included a forward purchase contract under which the holders were required to purchase such common shares for an aggregate purchase price of $173 million. As a result of the settlement of the forward purchase contracts, the equity units ceased to exist.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

2

Assured Guaranty Ltd.

Net Income (Loss) Reconciliation to Operating Income (1 of 2)

(dollars in millions)

				Three Months Ended											Three Months Ended
				December 31, 2012											December 31, 2011
				GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results			GAAP Income As Reported (1)			Less: Operating Income Adjustments					Non-GAAP Operating Income Results (1)
Revenues:
	Net earned premiums			$	218		$	(103	)	(2	)	$	321		$	225		$	(18	)	(2	)	$	243
	Net investment income			103			4			(2	)	99			101			8			(2	)	93
	Net realized investment gains (losses)			1			—			(3	)	1			(5		)	(6		)	(3	)	1
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		(30		)	(30		)			—			(19		)	(19		)			—
		Net unrealized gains (losses)		(89		)	(89		)			—			(276		)	(276		)			—
		Credit derivative revenues		—			(31		)			31			—			(37		)			37
			Net change in fair value of credit derivatives	(119		)	(150		)	(4	)	31			(295		)	(332		)	(4	)	37
	Fair value gains (losses) on committed capital securities			(6		)	(6		)	(5	)	—			32			32			(5	)	—
	Fair value gains (losses) on FG VIEs			36			36			(2	)	—			22			22			(2	)	—
	Other income			(4		)	1			(6	)	(5		)	(1		)	(2		)	(6	)	1
			Total revenues	229			(218		)			447			79			(296		)			375
Expenses:
	Loss and loss adjustment expenses
		Financial guaranty insurance		64			(44		)	(2	)	108			149			13			(2	)	136
		Credit derivatives		—			(19		)	(4	)	19			—			54			(4	)	(54		)
	Amortization of deferred acquisition costs			0			—					0			4			—					4
	Interest expense			21			—					21			25			—					25
	Other operating expenses			49			—					49			49			—					49
		Total expenses		134			(63		)			197			227			67					160
Income (loss) before income taxes				95			(155		)			250			(148		)	(363		)			215
	Provision (benefit) for income taxes			21			(45		)	(7	)	66			(64		)	(107		)	(7	)	43
Net income (loss)				$	74		$	(110	)			$	184		$	(84	)	$	(256	)			$	172

1) Effective January 1, 2012, the Company adopted, and applied retroactively, new guidance on acquisition costs. This resulted in a reduction of operating income and net income of $1 million in fourth quarter 2012.

2) Adjustments primarily related to elimination of the effects of consolidating FG VIEs.

3) Adjustments to eliminate realized gains (losses) on available-for-sale investments.

4) Adjustments to eliminate non-economic fair value gains (losses) on credit derivatives and reclassification to revenues and loss expense.

5) Adjustments to eliminate fair value gain (loss) on committed capital securities.

6) Adjustments primarily related to elimination of foreign exchange gains (losses) on revaluation of net premiums receivable.

7) Tax effect of the above adjustments.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

3

Assured Guaranty Ltd.

Net Income (Loss) Reconciliation to Operating Income (2 of 2)

(dollars in millions)

				Year Ended										Year Ended
				December 31, 2012										December 31, 2011
				GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results		GAAP Income As Reported (1)			Less: Operating Income Adjustments					Non-GAAP Operating Income Results (1)
Revenues:
	Net earned premiums			$	853		$	(153	)	(2	)	$	1,006	$	920		$	(75	)	(2	)	$	995
	Net investment income			404			14			(2	)	390		396			3			(2	)	393
	Net realized investment gains (losses)			1			(6		)	(3	)	7		(18		)	(18		)	(3	)	0
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		(108		)	(108		)			—		6			6					—
		Net unrealized gains (losses)		(477		)	(477		)			—		554			554					—
		Credit derivative revenues		—			(127		)			127		—			(188		)			188
			Net change in fair value of credit derivatives	(585		)	(712		)	(4	)	127		560			372			(4	)	188
	Fair value gains (losses) on committed capital securities			(18		)	(18		)	(5	)	—		35			35			(5	)	—
	Fair value gains (losses) on FG VIEs			210			210			(2	)	—		(132		)	(132		)	(2	)	—
	Other income			108			11			(6	)	97		58			18			(6	)	40
			Total revenues	973			(654		)			1,627		1,819			203					1,616
Expenses:
	Loss and loss adjustment expenses
		Financial guaranty insurance		523			(45		)	(2	)	568		462			(93		)	(2	)	555
		Credit derivatives		—			(28		)	(4	)	28		—			62			(4	)	(62		)
	Amortization of deferred acquisition costs			14			—					14		17			—					17
	Interest expense			92			—					92		99			—					99
	Other operating expenses			212			—					212		212			—					212
		Total expenses		841			(73		)			914		790			(31		)			821
Income (loss) before income taxes				132			(581		)			713		1,029			234					795
	Provision (benefit) for income taxes			22			(156		)	(7	)	178		256			62			(7	)	194
Net income (loss)				$	110		$	(425	)			$	535	$	773		$	172				$	601

1) Effective January 1, 2012, the Company adopted, and applied retroactively, new guidance on acquisition costs. See page 37 for the effect of that adoption on prior periods' results.

2) Adjustments primarily related to elimination of the effects of consolidating FG VIEs.

3) Adjustments to eliminate realized gains (losses) on available-for-sale investments.

4) Adjustments to eliminate non-economic fair value gains (losses) on credit derivatives and reclassification to revenues and loss expense.

5) Adjustments to eliminate fair value gain (loss) on committed capital securities.

6) Adjustments primarily related to elimination of foreign exchange gains (losses) on revaluation of net premiums receivable and reclassification of termination fees on credit derivative contracts.

7) Tax effect of the above adjustments.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

4

Assured Guaranty Ltd.

Consolidated Balance Sheets

(dollars in millions)

		As of:
		December 31,		December 31,
		2012		2011 (1)
Assets:
	Investment portfolio:
	Fixed maturity securities, available-for-sale, at fair value	$	10,056	$	10,142
	Short-term investments, at fair value	817		734
	Other invested assets	212		223
	Total investment portfolio	11,085		11,099
	Cash	138		215
	Premiums receivable, net of ceding commissions payable	1,005		1,003
	Ceded unearned premium reserve	561		709
	Deferred acquisition costs	116		132
	Reinsurance recoverable on unpaid losses	58		69
	Salvage and subrogation recoverable	456		368
	Credit derivative assets	141		153
	Deferred tax asset, net	721		804
	Current income tax receivable	1		76
	FG VIE assets, at fair value	2,688		2,819
	Other assets	272		262
Total assets		$	17,242	$	17,709
Liabilities and shareholders' equity:
Liabilities:
	Unearned premium reserve	$	5,207	$	5,963
	Loss and loss adjustment expense reserve	601		679
	Reinsurance balances payable, net	219		171
	Long-term debt	836		1,038
	Credit derivative liabilities	1,934		1,457
	FG VIE liabilities with recourse, at fair value	2,090		2,397
	FG VIE liabilities without recourse, at fair value	1,051		1,061
	Other liabilities	310		291
Total liabilities		12,248		13,057
Shareholders' equity:
	Common stock	2		2
	Additional paid-in capital	2,724		2,570
	Retained earnings	1,749		1,708
	Accumulated other comprehensive income	515		368
	Deferred equity compensation	4		4
Total shareholders' equity		4,994		4,652
Total liabilities and shareholders' equity		$	17,242	$	17,709

1) Effective January 1, 2012, the Company adopted, and applied retroactively, new guidance on acquisition costs. See page 37 for the effect of that adoption on prior periods' results.

5

Assured Guaranty Ltd.

Adjusted Book Value

(dollars in millions, except per share amounts)

			As of:
			December 31, 2012						December 31, 2011 (1)
			Total			Per Share (2)			Total			Per Share
Reconciliation of shareholders' equity to adjusted book value:
	Shareholders' equity		$	4,994		$	25.74		$	4,652		$	25.52
	Less after-tax adjustments:
		Effect of consolidating FG VIEs	(348		)	(1.79		)	(405		)	(2.22		)
		Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(988		)	(5.09		)	(498		)	(2.74		)
		Fair value gains (losses) on committed capital securities	23			0.12			35			0.19
		Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	477			2.45			319			1.75
	Operating shareholders' equity		$	5,830		30.05			$	5,201		28.54
	After-tax adjustments:
		Less: Deferred acquisition costs	165			0.85			174			0.95
		Plus: Net present value of estimated net future credit derivative revenue	220			1.14			302			1.66
		Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,266			16.83			3,658			20.07
	Adjusted book value		$	9,151		$	47.17		$	8,987		$	49.32

1) Effective January 1, 2012, the Company adopted, and applied retroactively, new guidance on acquisition costs. See page 37 for the effect of that adoption on prior periods' results.

2) On June 1, 2012, AGL issued 13.4 million common shares in connection with the 3,450,000 equity units it issued in June 2009. Each of the equity units included a forward purchase contract under which the holders were required to purchase such common shares for an aggregate purchase price of $173 million. As a result of the settlement of the forward purchase contracts, the equity units ceased to exist.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

6

Assured Guaranty Ltd.

Claims Paying Resources

(dollars in millions)

		As of December 31, 2012
		Assured Guaranty Municipal Corp.			Assured Guaranty Corp.			Assured Guaranty Re Ltd. (1)			Municipal Assurance Corp.(2)		Eliminations(3)			Consolidated
Claims paying resources
Policyholders' surplus		$	1,785		$	905		$	1,112		$	77	$	(300	)	$	3,579
Contingency reserve		1,539			825			—			—		—			2,364
	Qualified statutory capital	3,324			1,730			1,112			77		(300		)	5,943
Unearned premium reserve		2,090			753			990			—		—			3,833
Loss and LAE reserves (4) (5)		(26		)	313			225			—		—			512
	Total policyholders' surplus and reserves	5,388			2,796			2,327			77		(300		)	10,288
Present value of installment premium (5)		467			331			207			—		—			1,005
Standby line of credit/stop loss		200			200			200			—		—			600
Excess of loss reinsurance facility		435			435			—			—		(435		)	435
	Total claims paying resources	$	6,490		$	3,762		$	2,734		$	77	$	(735	)	$	12,328
Net par outstanding (6)		$	282,409		$	94,194		$	122,239		$	—	$	(1,443	)	$	497,399
Net debt service outstanding (6)		426,864			138,286			196,243			—		(3,479		)	757,914
Ratios:
	Net par outstanding to qualified statutory capital	85		:1	54		:1	110		:1	N/A					84		:1
Capital ratio (7)		128		:1	80		:1	176		:1	N/A					128		:1
Financial resources ratio (8)		66		:1	37		:1	72		:1	N/A					61		:1

1) Assured Guaranty Re Ltd. ("AG Re") numbers represent the Company's estimate of U.S. statutory accounting practices prescribed or permitted by insurance regulatory authorities.

2) Assured Guaranty US Holdings Inc. acquired Municipal and Infrastructure Assurance Corporation, which it has renamed Municipal Assurance Corp. ("MAC"), from Radian Asset Assurance Inc. on May 31, 2012. As of December 31, 2012, MAC has not written any business.

3) In 2009, Assured Guaranty Corp. ("AGC") issued a $300.0 million note payable to Assured Guaranty Municipal Corp. ("AGM"). Net par and net debt service outstanding eliminations relate to second-to-pay policies under which an Assured Guaranty insurance subsidiary guarantees an obligation already insured by another Assured Guaranty insurance subsidiary.

4) Reserves are reduced by approximately $1.3 billion for benefit related to representation and warranty recoverables.

5) Includes financial guaranty insurance and credit derivatives.

6) Net par outstanding and net debt service outstanding are presented on a statutory basis. Under statutory accounting, such amounts would be reduced both when an outstanding issue is legally defeased (i.e., an issuer has legally discharged its obligations with respect to a municipal security by satisfying conditions set forth in defeasance provisions contained in transaction documents and is no longer responsible for the payment of debt service with respect to such obligations) and when such issue is economically defeased (i.e., transaction documents for a municipal security do not contain defeasance provisions but the issuer establishes an escrow account with U.S. government securities in amounts sufficient to pay the refunded bonds when due; the refunded bonds are not considered paid and continue to be outstanding under the transaction documents and the issuer remains responsible to pay debt service when due to the extent monies on deposit in the escrow account are insufficient for such purpose).

7) The capital ratio is calculated by dividing net debt service outstanding by qualified statutory capital.

8) The financial resources ratio is calculated by dividing net debt service outstanding by total claims paying resources.

7

Assured Guaranty Ltd.

New Business Production

(dollars in millions)

			Three Months Ended				Year Ended
			December 31,				December 31,
			2012		2011		2012		2011
Consolidated new business production analysis:
	PVP
	Public finance - U.S.:
		Assumed from Radian	$	—	$	—	$	22	$	—
		Primary markets	31		51		125		148
		Secondary markets	6		3		19		25
	Public finance - non-U.S.:
		Primary markets	—		3		1		3
		Secondary markets	—		—		—		—
	Structured finance - U.S.		32		31		43		60
	Structured finance - non-U.S.		—		—		—		7
	Total PVP		$	69	$	88	$	210	$	243
	Total PVP		$	69	$	88	$	210	$	243
		Less: PVP of credit derivatives	—		—		—		—
	PVP of financial guaranty insurance		69		88		210		243
		Less: financial guaranty installment premium PVP	33		33		45		69
	Total: financial guaranty upfront gross written premiums ("GWP")		36		55		165		174
		Plus: financial guaranty installment GWP (1)	73		45		88		(47		)
	Total GWP		$	109	$	100	$	253	$	127
Consolidated financial guaranty gross par written:
	Public finance - U.S.:
		Assumed from Radian	$	—	$	—	$	1,797	$	—
		Primary markets	3,149		4,759		13,055		14,015
		Secondary markets	492		124		1,309		1,077
	Public finance - non-U.S.:
		Primary markets	—		127		35		127
		Secondary markets	—		—		—		—
	Structured finance - U.S.		400		582		620		1,673
	Structured finance - non-U.S.		—		—		—		—
	Total		$	4,041	$	5,592	$	16,816	$	16,892

1) Represents present value of new business on installment policies plus GWP adjustment on existing installment deals due to changes in assumptions and any cancellations of assumed reinsurance contracts.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

8

Assured Guaranty Ltd.

Financial Guaranty Gross Par Written

(dollars in millions)

Financial Guaranty Gross Par Written by Asset Type

			Three Months Ended			Year Ended
			December 31, 2012			December 31, 2012
			Gross Par Written		Avg. Internal Rating	Gross Par Written		Avg. Internal Rating
Sector
U.S. public finance
	General obligation		$	1,731	A-	$	10,062	A-
	Municipal utilities		1,024		A-	2,556		A-
	Tax backed		546		A	1,567		A
	Higher education		145		A	812		A-
	Healthcare		32		A-	439		A-
	Transportation		163		A-	651		A-
	Other public finance		—		—	74		A
		Total U.S. public finance	3,641		A-	16,161		A-
Non-U.S. public finance:
		Total non-U.S. public finance	—		—	35		BBB-
Total public finance			$	3,641	A-	$	16,196	A-
U.S. structured finance:
	Commercial receivables		$	—	—	$	182	AA
	Insurance securitization		400		AA	400		AA
	Other structure finance		—		—	38		A-
		Total U.S. structured finance	400		AA	620		AA
Non-U.S. structured finance:
		Total non-U.S. structured finance	—		—	—		—
Total structured finance			$	400	AA	$	620	AA
Total gross par written			$	4,041	A	$	16,816	A-

Note: Please refer to the Glossary for a description of internal ratings and sectors.

9

Assured Guaranty Ltd.

New Business Production by Quarter

(dollars in millions)

																							Year Ended
		1Q-11			2Q-11			3Q-11			4Q-11		1Q-12		2Q-12			3Q-12			4Q-12		2011			2012
PVP:
Public finance - U.S.:
	Assumed from Radian	$	—		$	—		$	—		$	—	$	22	$	—		$	—		$	—	$	—		$	22
	Primary markets	27			36			34			51		27		44			23			31		148			125
	Secondary markets	7			9			6			3		3		3			7			6		25			19
Public finance - non-U.S.:
	Primary markets	—			—			—			3		—		1			—			—		3			1
	Secondary markets	—			—			—			—		—		—			—			—		—			—
Structured finance - U.S.		11			7			11			31		4		2			5			32		60			43
Structured finance - non-U.S.		7			—			—			—		—		—			—			—		7			—
Total PVP		$	52		$	52		$	51		$	88	$	56	$	50		$	35		$	69	$	243		$	210
Total PVP		$	52		$	52		$	51		$	88	$	56	$	50		$	35		$	69	$	243		$	210
	Less: PVP of credit derivatives	—			—			—			—		—		—			—			—		—			—
PVP of financial guaranty insurance		52			52			51			88		56		50			35			69		243			210
	Less: financial guaranty installment premium PVP	19			6			11			33		4		3			5			33		69			45
Total: financial guaranty upfront GWP		33			46			40			55		52		47			30			36		174			165
	Plus: financial guaranty installment GWP (1)	(45		)	(29		)	(18		)	45		36		(16		)	(5		)	73		(47		)	88
Total GWP		$	(12	)	$	17		$	22		$	100	$	88	$	31		$	25		$	109	$	127		$	253
Consolidated financial guaranty gross par written(2):
Public finance - U.S.:
	Assumed from Radian	$	—		$	—		$	—		$	—	$	1,797	$	—		$	—		$	—	$	—		$	1,797
	Primary markets	1,886			3,292			4,078			4,759		2,902		4,497			2,507			3,149		14,015			13,055
	Secondary markets	333			356			264			124		144		173			500			492		1,077			1,309
Public finance - non-U.S.:
	Primary markets	—			—			—			127		—		35			—			—		127			35
	Secondary markets	—			—			—			—		—		—			—			—		—			—
Structured finance - U.S.		100			725			266			582		38		—			182			400		1,673			620
Structured finance - non-U.S.		—			—			—			—		—		—			—			—		—			—
	Total	$	2,319		$	4,373		$	4,608		$	5,592	$	4,881	$	4,705		$	3,189		$	4,041	$	16,892		$	16,816

1) Represents present value of new business on installment policies plus GWP adjustment on existing installment deals due to changes in assumptions and any cancellations of assumed reinsurance contracts.

2) Includes committed amount including undrawn revolvers.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

10

Assured Guaranty Ltd.

Available-for-Sale Investment Portfolio and Cash

As of December 31, 2012

(dollars in millions)

			Amortized Cost		Pre-Tax Book Yield		After-Tax Book Yield		Fair Value		Annualized Investment Income (1)
Investment portfolio, available-for-sale:
Fixed maturity securities:
	U.S. Treasury securities and obligations of U.S. government agencies		$	405	2.10	%	1.46	%	$	427	9
	Agency obligations		328		3.68		3.05		367		12
	Foreign government securities		286		2.98		1.95		304		9
	Obligations of states and political subdivisions		3,728		4.01		3.79		4,072		150
	Insured obligations of state and political subdivisions (2)(4)		1,425		4.83		4.56		1,559		69
	Corporate securities		930		3.52		2.94		1,010		32
	Mortgage-backed securities ("MBS") (3):
		Residential MBS ("RMBS") (4)	1,419		5.48		4.21		1,360		78
		Commercial MBS ("CMBS")	482		3.88		3.30		520		18
	Asset-backed securities		482		6.06		4.31		531		29
		Total fixed maturity securities	9,485		4.28	%	3.71	%	10,150		406
Short-term investments			799		0.05		0.04		799		0
Cash (5)			134		—		—		134		—
		Total	$	10,418	3.95	%	3.42	%	$	11,083	$	406
Less: FG VIEs			117		10.46		6.80		72		15
		Total	$	10,301	3.85	%	3.37	%	$	11,011	$	391
Ratings (6):			Fair Value		% of Portfolio
	U.S. Treasury securities and obligations of U.S. government agencies		$	427	4.2	%
	Agency obligations		367		3.6	%
	AAA/Aaa		1,859		18.3	%
	AA/Aa		5,371		52.9	%
	A/A		1,439		14.2	%
	BBB		37		0.4	%
	Below investment grade ("BIG") (7)		650		6.4	%
	Not rated		0		0.0	%
		Total fixed maturity securities, available-for-sale	10,150		100.0	%
	Less: FG VIEs		94
		Total fixed maturity securities, available-for-sale	$	10,056
Duration of fixed maturity securities and short-term investments (in years):					4.3
Average ratings of fixed maturity securities and short-term investments					AA-

1) Represents annualized investment income based on amortized cost and pre-tax book yields.

2) Reflects obligations of state and local political subdivisions that have been insured by other financial guarantors. The underlying ratings of these bonds, after giving effect to the lower of the rating assigned by Standard & Poor's Ratings Services ("S&P") or Moody's Investors Service, Inc. ("Moody's"), average A+. Includes fair value of $343 million insured by AGC and AGM.

3) Includes fair value of $116 million in subprime RMBS, which has an average rating of BIG.

4) Includes securities purchased or obtained as part of loss mitigation or other risk management strategies.

5) Represents operating cash and is not included in yield calculations.

6) Ratings are represented by the lower of the Moody's and S&P classifications except for bonds purchased for loss mitigation or risk management strategies which use internal ratings classifications.

7) Includes below investment grade securities that were purchased or obtained as part of loss mitigation or other risk management strategies of $1,855 million in par with carrying value of $650 million.

11

Assured Guaranty Ltd.

Estimated Net Exposure Amortization⁽¹⁾ and Estimated Future Net Premium

and Credit Derivative Revenues

(dollars in millions)

						Financial Guaranty Insurance (2)
		Estimated Net Debt Service Amortization		Estimated Ending Net Debt Service Outstanding		Expected PV Net Earned Premiums (3)		Accretion of Discount		Future Net Premiums Earned		Future Credit Derivative Revenues (4)		Total
2012 (as of December 31)				$	782,180
2013 Q1		$	15,109	767,071		$	131	$	6	$	137	$	25	$	162
2013 Q2		16,818		750,253		126		6		132		23		155
2013 Q3		16,709		733,544		121		6		127		23		150
2013 Q4		16,457		717,087		117		6		123		21		144
2014		66,861		650,226		433		21		454		66		520
2015		56,602		593,624		382		20		402		45		447
2016		44,261		549,363		347		19		366		35		401
2017		45,627		503,736		311		17		328		27		355
2013-2017		278,444		503,736		1,968		101		2,069		265		2,334
2018-2022		168,304		335,432		1,188		68		1,256		76		1,332
2023-2027		133,164		202,268		741		45		786		45		831
2028-2032		92,569		109,699		443		28		471		36		507
After 2032		109,699		—		423		22		445		37		482
	Total	$	782,180			$	4,763	$	264	$	5,027	$	459	$	5,486

1) Represents the future expected amortization of current debt service outstanding (principal and interest), assuming no advance refundings, as of December 31, 2012. Actual amortization differs from expected maturities because borrowers may have the right to call or prepay guaranteed obligations and because of management's assumptions on structured finance amortization.

2) See page 14 for ‘‘Present Value of Financial Guaranty Insurance Net Expected Loss to be Expensed.’’

3) GAAP basis. Excludes $262 million in expected present value of net earned premiums related to FG VIEs.

4) Excludes contracts with credit impairment.

12

Assured Guaranty Ltd.

Expected Amortization of Net Par Outstanding

(dollars in millions)

Structured Finance

		Estimated Net Par Amortization
		U.S. and Non-U.S. Pooled Corporate		U.S. RMBS		Financial Products (1)		Other Structured Finance		Total		Estimated Ending Net Par Outstanding
2012 (as of December 31)												$	94,386
2013 Q1		$	1,872	$	889	$	111	$	817	$	3,689	90,697
2013 Q2		3,862		846		113		269		5,090		85,607
2013 Q3		2,537		779		334		361		4,011		81,596
2013 Q4		3,452		728		83		408		4,671		76,925
2014		18,086		2,902		491		1,760		23,239		53,686
2015		9,875		2,704		266		2,737		15,582		38,104
2016		4,128		2,044		155		1,227		7,554		30,550
2017		7,224		1,574		76		1,095		9,969		20,581
2013-2017		51,036		12,466		1,629		8,674		73,805		20,581
2018-2022		2,182		3,672		360		3,323		9,537		11,044
2023-2027		455		1,125		314		1,922		3,816		7,228
2028-2032		402		301		657		767		2,127		5,101
After 2032		2,624		263		693		1,521		5,101		—
	Total structured finance	$	56,699	$	17,827	$	3,653	$	16,207	$	94,386

Public Finance

		Estimated Net Par Amortization		Estimated Ending Net Par Outstanding
2012 (as of December 31)				$	425,507
2013 Q1		$	5,940	419,567
2013 Q2		6,208		413,359
2013 Q3		7,369		405,990
2013 Q4		6,549		399,441
2014		23,638		375,803
2015		22,450		353,353
2016		19,346		334,007
2017		19,347		314,660
2013-2017		110,847		314,660
2018-2022		90,846		223,814
2023-2027		82,789		141,025
2028-2032		62,006		79,019
After 2032		79,019		—
	Total public finance	$	425,507

Net par outstanding (end of period)

		1Q-11		2Q-11		3Q-11		4Q-11		1Q-12		2Q-12		3Q-12		4Q-12
Public finance - U.S.		$	417,367	$	413,274	$	408,065	$	403,073	$	416,499	$	409,877	$	399,176	$	387,967
Public finance - non-U.S.		41,828		41,226		39,267		39,046		39,913		38,769		38,720		37,540
Structured finance - U.S.		113,108		103,978		97,969		92,234		87,784		83,430		78,504		74,695
Structured finance - non-U.S.		29,984		28,718		26,424		23,695		22,902		20,858		19,993		19,691
	Total	$	602,287	$	587,196	$	571,725	$	558,048	$	567,098	$	552,934	$	536,393	$	519,893

1) See Glossary for description of financial products.

13

Assured Guaranty Ltd.

Present Value ("PV") of Financial Guaranty Insurance Net Expected Loss to be Expensed

As of December 31, 2012

(dollars in millions)

		Net Expected Loss to be Expensed (1)
		Operating(2)		GAAP(2)
2013 Q1		$	31	$	19
2013 Q2		29		19
2013 Q3		27		18
2013 Q4		23		16
2014		70		48
2015		55		42
2016		48		37
2017		46		36
2013-2017		329		235
2018-2022		158		127
2023-2027		72		59
2028-2032		37		29
After 2032		29		19
	Total expected PV of net expected loss to be expensed	625		469
Discount		287		251
	Total future value	$	912	$	720

1) The expected present value of net loss to be expensed is discounted by weighted-average risk free rates ranging from 0.0% to 3.28% for U.S. dollar denominated obligations.

2) Operating income includes net expected loss to be expensed on consolidated FG VIEs. Losses on consolidated FG VIEs are eliminated for GAAP.

14

Assured Guaranty Ltd.

Financial Guaranty Profile (1 of 4)

(dollars in millions)

Net Par Outstanding and Average Rating by Asset Type

			December 31, 2012			December 31, 2011
			Net Par Outstanding		Avg. Internal Rating	Net Par Outstanding		Avg. Internal Rating
U.S. public finance:
	General obligation		$	169,985	A+	$	173,061	A+
	Tax backed		73,787		A+	78,006		A+
	Municipal utilities		62,116		A	65,204		A
	Transportation		33,799		A	35,396		A
	Healthcare		17,838		A	19,495		A
	Higher education		15,770		A+	15,677		A+
	Housing		4,633		AA-	5,696		AA-
	Infrastructure finance		4,210		BBB	4,110		BBB
	Investor-owned utilities		1,069		A-	1,124		A-
	Other public finance		4,760		A	5,304		A-
		Total U.S. public finance	387,967		A	403,073		A+
Non-U.S. public finance:
	Infrastructure finance		15,812		BBB	15,405		BBB
	Regulated utilities		12,494		BBB+	13,260		BBB+
	Pooled infrastructure		3,200		AA-	3,130		AA-
	Other public finance		6,034		A	7,251		A+
		Total non-U.S. public finance	37,540		BBB+	39,046		BBB+
Total public finance			$	425,507	A	$	442,119	A
U.S. structured finance:
	Pooled corporate obligations		$	41,886	AAA	$	51,520	AAA
	RMBS		17,827		BB+	21,567		BB+
	CMBS and other commercial real estate related exposures		4,247		AAA	4,774		AAA
	Financial products		3,653		AA-	5,217		AA-
	Consumer receivables		2,369		BBB+	4,326		AA-
	Insurance securitizations		2,190		A+	1,893		A+
	Commercial receivables		1,025		BBB+	1,214		BBB
	Structured credit		319		CCC+	424		B-
	Other structured finance		1,179		BBB+	1,299		A-
		Total U.S. structured finance	74,695		AA-	92,234		AA-
Non-U.S. structured finance:
	Pooled corporate obligations		14,813		AAA	17,731		AAA
	Commercial receivables		1,463		A-	1,865		A-
	RMBS		1,424		AA-	1,598		AA
	Insurance securitizations		923		CCC-	964		CCC-
	Structured credit		591		BBB	979		BBB
	CMBS and other commercial real estate related exposures		100		AAA	180		AAA
	Other structured finance		377		Super Senior	378		Super Senior
		Total non-U.S. structured finance	19,691		AA	23,695		AA
Total structured finance			$	94,386	AA-	$	115,929	AA-
Total net par outstanding			$	519,893	A+	$	558,048	A+

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

15

Assured Guaranty Ltd.

Financial Guaranty Profile (2 of 4)

As of December 31, 2012

(dollars in millions)

Distribution by Ratings of Financial Guaranty Portfolio

		Public Finance - U.S.				Public Finance - Non-U.S.				Structured Finance - U.S.				Structured Finance - Non-U.S.				Consolidated
Ratings:		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding(1)		%		Net Par Outstanding		%		Net Par Outstanding		%
Super senior		$	—	—	%	$	1,130	3.0	%	$	13,572	18.2	%	$	4,874	24.7	%	$	19,576	3.8	%
AAA		4,502		1.2	%	576		1.5	%	28,615		38.3	%	8,295		42.1	%	41,988		8.1	%
AA		124,525		32.1	%	875		2.3	%	9,589		12.8	%	722		3.7	%	135,711		26.1	%
A		210,124		54.1	%	9,781		26.1	%	4,670		6.2	%	1,409		7.2	%	225,984		43.4	%
BBB		44,213		11.4	%	22,885		61.0	%	3,717		5.0	%	2,427		12.3	%	73,242		14.1	%
BIG		4,603		1.2	%	2,293		6.1	%	14,532		19.5	%	1,964		10.0	%	23,392		4.5	%
	Total net par outstanding	$	387,967	100.0	%	$	37,540	100.0	%	$	74,695	100.0	%	$	19,691	100.0	%	$	519,893	100.0	%

1) Beginning in the first quarter 2012, the Company decided to classify those portions of risks benefiting from reimbursement obligations collateralized by eligible assets held in trust in acceptable reimbursement structures as the higher of 'AA' or their current internal rating. As of the fourth quarter 2012, the Company applied this policy to the Bank of America Agreement and the Deutsche Bank Agreement.

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

16

Assured Guaranty Ltd.

Financial Guaranty Profile (3 of 4)

As of December 31, 2012

(dollars in millions)

Geographic Distribution of Financial Guaranty Portfolio

			Net Par Outstanding		% of Total
U.S.:
Public finance
	California		$	57,302	11.0	%
	New York		31,402		6.0	%
	Pennsylvania		31,173		6.0	%
	Texas		29,942		5.8	%
	Illinois		25,297		4.9	%
	Florida		24,111		4.6	%
	New Jersey		15,999		3.1	%
	Michigan		15,516		3.0	%
	Georgia		10,001		1.9	%
	Ohio		9,634		1.9	%
	Other states		137,590		26.4	%
		Total public finance	387,967		74.6	%
	Structured finance (multiple states)		74,695		14.4	%
		Total U.S.	462,662		89.0	%
Non-U.S.:
	United Kingdom		23,624		4.5	%
	Australia		7,558		1.5	%
	Canada		4,160		0.8	%
	France		3,914		0.8	%
	Italy		2,347		0.5	%
	Other		15,628		2.9	%
		Total non-U.S.	57,231		11.0	%
Total net par outstanding			$	519,893	100.0	%

17

Assured Guaranty Ltd.

Financial Guaranty Profile (4 of 4)

As of December 31, 2012

(dollars in millions)

Net Economic Exposure to Selected European Countries

			Greece		Hungary		Ireland		Italy		Portugal		Spain		Total
Sovereign and sub-sovereign exposure:
	Public finance		$	—	$	—	$	—	$	1,007	$	105	$	266	$	1,378
	Infrastructure finance		—		434		24		333		100		169		1,060
		Total sovereign and sub-sovereign exposure	—		434		24		1,340		205		435		2,438
Non-sovereign exposure:
	Regulated utilities		—		—		—		229		—		9		238
	RMBS		—		219		139		498		—		—		856
	Commercial receivables		—		2		13		63		15		2		95
	Pooled corporate obligations		25		—		189		217		14		524		969
		Total non-sovereign exposure	25		221		341		1,007		29		535		2,158
		Total	$	25	$	655	$	365	$	2,347	$	234	$	970	$	4,596
		Total BIG	$	—	$	616	$	7	$	248	$	121	$	419	$	1,411

Note: While the Company’s exposures are shown in U.S. dollars, the obligations the Company insures are in various currencies, including U.S. dollars, Euros and British pounds sterling. Included in the tables above is $l39 million of reinsurance assumed on a 2004 - 2006 pool of Irish residential mortgages that is part of the Company’s remaining legacy mortgage reinsurance business. One of the residential mortgage-backed securities included in the table above includes residential mortgages in both Italy and Germany, and only the portion of the transaction equal to the portion of the original mortgage pool in Italian mortgages is shown in the table.

18

Assured Guaranty Ltd.

Direct Pooled Corporate Obligations Profile

As of December 31, 2012

(dollars in millions)

Distribution of Direct Pooled Corporate Obligations by Ratings

			Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement
Ratings:
	Super Senior		$	14,758	26.7	%	31.1	%	30.7	%
	AAA		32,690		59.1	%	30.3	%	30.6	%
	AA		1,906		3.4	%	39.9	%	38.4	%
	A		517		0.9	%	45.4	%	45.7	%
	BBB		2,038		3.7	%	35.3	%	28.9	%
	BIG		3,386		6.2	%	38.8	%	22.2	%
		Total exposures	$	55,295	100.0	%	31.7	%	30.5	%

Distribution of Direct Pooled Corporate Obligations by Asset Class

			Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement		Avg. Rating
Asset class:
	CBOs/CLOs		$	32,710	59.2	%	31.7	%	32.3	%	AAA
	Synthetic investment grade pooled corporates		9,658		17.5	%	21.6	%	19.7	%	AAA
	Market value CDOs of corporates		3,840		6.9	%	30.7	%	32.8	%	AAA
	Synthetic high yield pooled corporates		2,690		4.9	%	47.2	%	40.9	%	AAA
	Trust preferred
		Banks and insurance	2,903		5.3	%	46.3	%	35.3	%	BBB-
		U.S. mortgage and real estate investment trusts	1,953		3.5	%	50.2	%	34.8	%	BB-
		European mortgage and real estate investment trusts	837		1.5	%	36.8	%	34.1	%	BBB-
	Other pooled corporates		704		1.2	%	0.4	%	0.4	%	BBB-
		Total exposures	$	55,295	100.0	%	31.7	%	30.5	%	AAA

Note: Please refer to the Glossary for an explanation of internal ratings, performance indicators and sectors.

19

Assured Guaranty Ltd.

Consolidated U.S. RMBS Profile

As of December 31, 2012

(dollars in millions)

Distribution of U.S. RMBS by Rating and Type of Exposure

Ratings:			Prime First Lien(1)		Closed End Seconds		HELOC		Alt-A First Lien(1)		Option ARMs(1)		Subprime First Lien(1)		Total Net Par Outstanding
	AAA		$	5	$	0	$	69	$	256	$	—	$	2,359	$	2,689
	AA		116		116		144		469		323		1,316		2,483
	A		2		0		246		9		99		833		1,190
	BBB		45		—		20		280		31		485		861
	BIG		474		404		2,718		3,575		1,096		2,337		10,605
		Total exposures	$	641	$	521	$	3,196	$	4,589	$	1,550	$	7,330	$	17,827

Distribution of U.S. RMBS by Year Insured⁽²⁾ and Type of Exposure

Year insured:			Prime First Lien		Closed End Seconds		HELOC		Alt-A First Lien		Option ARMs		Subprime First Lien		Total Net Par Outstanding
	2004 and prior		$	33	$	1	$	239	$	101	$	36	$	1,386	$	1,796
	2005		170		—		727		581		61		218		1,756
	2006		106		195		936		381		239		2,992		4,848
	2007		333		325		1,294		2,290		1,141		2,657		8,040
	2008		—		—		—		1,236		73		78		1,387
		Total exposures	$	641	$	521	$	3,196	$	4,589	$	1,550	$	7,330	$	17,827

Distribution of U.S. RMBS by Rating and Year Insured

Year insured:			AAA Rated			AA Rated			A Rated			BBB Rated			BIG Rated			Total
	2004 and prior		$	1,167		$	78		$	53		$	184		$	313		$	1,796
	2005		145			201			—			42			1,368			1,756
	2006		1,270			994			814			187			1,582			4,848
	2007		6			1,209			249			448			6,127			8,040
	2008		101			—			73			—			1,213			1,387
		Total exposures	$	2,689		$	2,483		$	1,190		$	861		$	10,605		$	17,827
	% of Total		15.1		%	13.9		%	6.7		%	4.8		%	59.5		%	100.0		%

1) Beginning in the first quarter 2012, the Company decided to classify those portions of risks benefiting from reimbursement obligations collateralized by eligible assets held in trust in acceptable reimbursement structures as the higher of 'AA' or their current internal rating. As of the fourth quarter 2012, the Company applied this policy to the Bank of America Agreement and the Deutsche Bank Agreement.

2) Assured Guaranty has not insured any U.S. RMBS transactions since 2008.

Note: Please refer to the Glossary for a description of performance indicators and sectors.

20

Assured Guaranty Ltd.

Direct U.S. RMBS Profile (1 of 2)

As of December 31, 2012

(dollars in millions)

Distribution of Direct U.S. RMBS Insured January 1, 2005 or Later by Exposure Type, Average Pool Factor, Subordination, Cumulative Losses and 60+ Day Delinquencies

U.S. Prime First Lien

Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	167	30.9	%	4.3	%	2.3	%	11.6	%	6
	2006		106		51.8	%	8.7	%	0.4	%	17.9	%	1
	2007		333		42.3	%	5.2	%	5.7	%	18.7	%	1
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	605	40.8	%	5.5	%	3.8	%	16.6	%	8

U.S. Closed End Seconds

Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	—	—	%	—	%	—	%	—	%	—
	2006		186		12.7	%	—	%	59.7	%	6.4	%	1
	2007		325		15.4	%	—	%	69.1	%	7.9	%	9
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	510	14.4	%	—	%	65.7	%	7.3	%	10

U.S. HELOC

Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	682	14.8	%	3.0	%	16.7	%	11.2	%	6
	2006		918		23.2	%	3.4	%	36.3	%	7.7	%	7
	2007		1,294		37.7	%	2.8	%	31.9	%	5.8	%	9
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	2,893	27.7	%	3.0	%	29.7	%	7.7	%	22

U.S. Alt-A First Lien

Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	579	28.5	%	8.4	%	7.1	%	19.5	%	21
	2006		381		34.5	%	0.0	%	20.0	%	39.2	%	7
	2007		2,290		43.2	%	1.6	%	15.6	%	31.3	%	12
	2008		1,236		40.8	%	18.8	%	15.2	%	27.2	%	5
		Total	$	4,486	39.9	%	7.1	%	14.8	%	29.3	%	45

Note: Please refer to the Glossary for a description of performance indicators and sectors.

21

Assured Guaranty Ltd.

Direct U.S. RMBS Profile (2 of 2)

As of December 31, 2012

(dollars in millions)

Distribution of Direct U.S. RMBS Insured January 1, 2005 or Later by Exposure Type, Average Pool Factor, Subordination, Cumulative Losses and 60+ Day Delinquencies

U.S. Option ARMs

Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	53	17.9	%	9.6	%	10.8	%	21.2	%	3
	2006		233		38.2	%	—	%	19.9	%	43.5	%	5
	2007		1,141		42.4	%	1.3	%	20.6	%	36.6	%	11
	2008		73		44.6	%	48.1	%	15.5	%	33.1	%	1
		Total	$	1,501	41.0	%	3.7	%	19.9	%	37.0	%	20

U.S. Subprime First Lien

Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	208	36.7	%	22.8	%	7.6	%	32.1	%	4
	2006		2,986		19.6	%	61.4	%	18.7	%	35.3	%	4
	2007		2,657		45.1	%	14.9	%	24.1	%	43.2	%	13
	2008		78		56.6	%	19.4	%	19.5	%	33.3	%	1
		Total	$	5,929	32.1	%	33.9	%	20.7	%	38.7	%	22

Note: Please refer to the Glossary for a description of performance indicators and sectors.

22

Assured Guaranty Ltd.

Direct U.S. Commercial Real Estate Profile

As of December 31, 2012

(dollars in millions)

Distribution of Direct U.S. CMBS Insured January 1, 2005 or Later by Exposure Type, Internal Rating, Average Pool Factor, Subordination, Cumulative Losses and 60+ Day Delinquencies

U.S. CMBS

Rating:			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	Super senior		$	3,119	71.0	%	39.9	%	2.4	%	9.0	%	142
	AAA		271		68.9	%	30.3	%	3.3	%	12.2	%	17
	AA		—		—	%	—	%	—	%	—	%	—
	A		67		21.3	%	31.9	%	2.7	%	7.1	%	1
	BBB		—		—	%	—	%	—	%	—	%	—
	BIG		—		—	%	—	%	—	%	—	%	—
		Total exposures	$	3,457	69.8	%	39.0	%	2.5	%	9.3	%	160

CDOs of U.S. Commercial Real Estate and CMBS⁽¹⁾ 

		Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement
CDOs of commericial real estate		$	514	98.8	%	50.7	%	54.8	%
CDOs of CMBS(2)		6		1.2	%	35.0	%	88.3	%
	Total exposures	$	520	100.0	%	50.5	%	55.2	%

1) Represents other U.S. Commercial Real Estate not included in the table above.

2) Relates to vintages 2003 and prior.

Note: Please refer to the Glossary for a description of performance indicators and sectors.

23

Assured Guaranty Ltd.

Direct U.S. Consumer Receivables Profile

As of December 31, 2012

(dollars in millions)

Distribution of Direct U.S. Consumer Receivables by Rating

Rating:			Credit Cards		Student Loans		Manufactured Housing		Auto		Total Net Par Outstanding
	Super senior		$	0	$	—	$	—	$	—	$	0
	AAA		—		392		—		134		526
	AA		—		—		54		16		70
	A		—		—		—		—		—
	BBB		—		869		36		—		905
	BIG		—		—		130		—		130
		Total exposures	$	0	$	1,261	$	220	$	150	$	1,631
Average rating			Super Senior		A-		BB-		AAA		A-
Average initial credit enhancement			N/A		7.2%		27.4%		19.9%		11.1%
Average current credit enhancement			N/A		11.7%		25.5%		36.8%		15.9%

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

24

Assured Guaranty Ltd.

Below Investment Grade Exposures (1 of 5)

(dollars in millions)

BIG Exposures by Asset Exposure Type

			BIG Net Par Outstanding(1)
			December 31, 2012		December 31, 2011(2)
U.S. public finance:
	Infrastructure finance		$	1,695	$	1,335
	General obligation		1,122		966
	Municipal utilities		596		672
	Tax backed		514		459
	Transportation		245		246
	Healthcare		58		134
	Higher education		18		20
	Housing		2		0
	Other public finance		353		675
		Total U.S. public finance	4,603		4,507
Non-U.S. public finance:
	Infrastructure finance		1,923		1,924
	Regulated utilities		—		9
	Other public finance		370		395
		Total non-U.S. public finance	2,293		2,328
Total public finance			$	6,896	$	6,835
U.S. structured finance:
	RMBS		$	10,605	$	13,203
	Pooled corporate obligations		2,873		3,628
	Consumer receivables		421		466
	Structured credit		319		361
	Commercial receivables		182		202
	Other structured finance		132		148
		Total U.S. structured finance	14,532		18,008
Non-U.S. structured finance:
	Insurance securitizations		923		923
	Pooled corporate obligations		805		980
	RMBS		220		—
	Commercial receivables		16		16
		Total non-U.S. structured finance	1,964		1,919
Total structured finance			$	16,496	$	19,927
Total BIG net par outstanding			$	23,392	$	26,762

1) Securities purchased for loss mitigation purposes represented $1,133 million and $1,293 million of gross par outstanding as of December 31, 2012 and December 31, 2011, respectively. In addition, under the terms of certain credit derivative contracts, the Company has obtained the obligations referenced in such contracts and recorded it in invested assets in the consolidated balance sheets. Such amounts totaled $220 million and $222 million in gross par outstanding as of December 31, 2012 and December 31, 2011, respectively.

2) Beginning in the first quarter 2012, the Company decided to classify those portions of risks benefiting from reimbursement obligations collateralized by eligible assets held in trust in acceptable reimbursement structures as the higher of 'AA' or their current internal rating. As of the fourth quarter 2012, the Company applied this policy to the Bank of America Agreement and the Deutsche Bank Agreement. The Bank of America Agreement was entered into in April 2011 and the reclassification in the first quarter 2012 resulted in a decrease in BIG net par outstanding as of December 31, 2011 of $1,452 million from that previously reported.

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

25

Assured Guaranty Ltd.

Below Investment Grade Exposures (2 of 5)

(dollars in millions)

Net Par Outstanding by BIG Category⁽¹⁾  

				Financial Guaranty Insurance and Credit Derivatives Surveillance Categories(2)
				December 31, 2012		December 31, 2011(3)
Category 1
	U.S. public finance			$	3,290	$	3,395
	Non-U.S. public finance			2,293		2,046
	U.S. structured finance			2,687		5,882
	Non-U.S. structured finance			984		927
		Total Category 1		9,254		12,250
Category 2
	U.S. public finance			500		274
	Non-U.S. public finance			—		282
	U.S. structured finance			4,550		4,383
	Non-U.S. structured finance			57		42
		Total Category 2		5,107		4,981
Category 3
	U.S. public finance			813		838
	Non-U.S. public finance			—		—
	U.S. structured finance			7,295		7,743
	Non-U.S. structured finance			923		950
		Total Category 3		9,031		9,531
			BIG Total	$	23,392	$	26,762

1) Assured Guaranty's surveillance department is responsible for monitoring our portfolio of credits and maintains a list of BIG credits. BIG Category 1: Below investment grade transactions showing sufficient deterioration to make lifetime losses possible, but for which none are currently expected. Transactions on which claims have been paid but are expected to be fully reimbursed (other than investment grade transactions on which only liquidity claims have been paid) are in this category. BIG Category 2: Below investment grade transactions for which lifetime losses are expected but for which no claims (other than liquidity claims) have yet been paid. BIG Category 3: Below investment grade transactions for which lifetime losses are expected and on which claims (other than liquidity claims) have been paid. Transactions remain in this category when claims have been paid and only a recoverable remains.

2) Securities purchased for loss mitigation purposes represented $1,133 million and $1,293 million of gross par outstanding as of December 31, 2012 and December 31, 2011, respectively. In addition, under the terms of certain credit derivative contracts, the Company has obtained the underlying collateral of transactions and recorded it in invested assets in the consolidated balance sheets. Such amounts totaled $220 million and $222 million in gross par outstanding as of December 31, 2012 and December 31, 2011, respectively.

3) Beginning in the first quarter 2012, the Company decided to classify those portions of risks benefiting from reimbursement obligations collateralized by eligible assets held in trust in acceptable reimbursement structures as the higher of 'AA' or their current internal rating. As of the fourth quarter 2012, the Company applied this policy to the Bank of America Agreement and the Deutsche Bank Agreement. The Bank of America Agreement was entered into in April 2011 and the reclassification in the first quarter 2012 resulted in a decrease in BIG net par outstanding as of December 31, 2011 of $1,452 million from that previously reported.

26

Assured Guaranty Ltd.

Below Investment Grade Exposures (3 of 5)

As of December 31, 2012

(dollars in millions)

Public Finance BIG Exposures Greater Than $50 Million

			Net Par Outstanding		Internal Rating
Name or description
U.S. public finance:
	Skyway Concession Comany LLC		$	1,118	BB
	Jefferson County Alabama Sewer		479		D
	Detroit (City of) Michigan		355		BB
	Louisville Arena Authority Inc.		336		BB
	San Joaquin Hills California Transportation		245		BB-
	GMAC Military Housing Trust XVIII (Hickam Air Force Base)		216		BB
	Lackawanna County, Pennsylvania		181		BB-
	Jefferson County Alabama School Sales Tax		174		BB
	Stockton City, California (includes $37.6 million purchased, 24% owned)¹		158		D
	Woonsocket (City of), Rhode Island		152		BB
	Guaranteed Student Loan Transaction		148		B
	Orlando Tourist Development Tax - Florida		118		B+
	Harrisburg (City of) Pennsylvania General Obligation		92		B-
	Rockland County New York		84		BB+
	Xenia Rural Water District, Iowa		79		B
	Guaranteed Student Loan Transaction		54		CCC
		Total	$	3,989
Non-U.S. public finance:
	Reliance Rail Finance Pty. Limited		$	695	BB
	M6 Duna Autopalya Koncesszios Zartkoruen Mukodo Reszvenytarsasag		396		BB
	Cross City Tunnel Motorway Finance Limited		322		BB
	Valencia Fair		255		BB-
	Aeroporti Di Roma (ADR) Romulus Finance S.R.L. (Rome Airport)		248		BB
	Autovia de la Mancha, S.A.		144		BB-
	Alte Liebe I Limited (Wind Farm)		86		BB
	Metropolitano de Porto Lease and Sublease of Railroad Equipment		56		B+
		Total	$	2,202
Total			$	6,191

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

27

Assured Guaranty Ltd.

Below Investment Grade Exposures (4 of 5)

As of December 31, 2012

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million

			Net Par Outstanding		Internal Rating	Current Credit Enhancement	60+ Day Delinquencies
Name or description
U.S. structured finance:
	U.S. RMBS:
		Deutsche Alt-A Securities Mortgage Loan 2007-2	$	645	CCC	0.0%	30.3%
		MABS 2007-NCW (includes $40.9 million purchased, 8% owned)¹	511		B	20.5%	58.2%
		Private Residential Mortgage Transaction	362		B	12.8%	28.4%
		Countrywide HELOC 2006-I	355		CCC	0.0%	5.0%
		Option One 2007-FXD2	352		CCC	9.8%	25.5%
		Private Residential Mortgage Transaction	346		B	13.2%	26.2%
		MortgageIT Securities Corp. Mortgage Loan 2007-2	333		B	5.2%	18.7%
		Private Residential Mortgage Transaction	327		CCC	4.7%	26.6%
		Deutsche Alt-A Securities Mortgage Loan 2007-3	326		B	1.5%	23.1%
		Private Residential Mortgage Transaction	301		CCC	0.3%	29.2%
		Countrywide HELOC 2006-F (includes $88.2 million purchased, 30% owned)¹	291		CCC	0.0%	14.4%
		Nomura Asset Accept. Corp. 2007-1 (includes $0.7 million purchased, 0.2% owned)¹	283		CCC	0.0%	41.8%
		AAA Trust 2007-2 (includes $103.1 million purchased, 37% owned)¹	279		CCC	13.2%	38.6%
		Private Residential Mortgage Transaction	267		B	12.4%	26.6%
		Countrywide Home Equity Loan Trust 2005-J	230		CCC	0.0%	15.8%
		Countrywide HELOC 2005-D	220		CCC	0.0%	11.3%
		Countrywide Home Equity Loan Trust 2007-D	219		CCC	0.0%	5.5%
		MASTR 2007-3 (NEGAM) (includes $42.1 million purchased, 20% owned)¹	213		CCC	0.0%	49.9%
		Countrywide HELOC 2007-A (includes $17.3 million purchased, 9% owned)¹	187		CCC	0.0%	5.2%
		Terwin Mortgage Trust 2006-10SL (includes $142.0 million purchased, 77% owned)¹	186		CCC	—%	6.4%
		Soundview 2007-WMC1	179		CCC	—%	64.4%
		Countrywide HELOC 2007-B	172		CCC	0.0%	5.2%
		GMACM 2004-HE3	171		B	0.0%	0.0%
		Private Residential Mortgage Transaction	160		BB	27.0%	29.2%
		New Century 2005-A	152		CCC	16.7%	31.1%
		Renaissance (DELTA) 2007-3 (includes $132.3 million purchased, 91% owned)¹	146		CCC	6.3%	31.6%
		FHABS 2007-HE1 HELOC	141		B	0.0%	3.0%
		IndyMac 2007-H1 HELOC	134		CCC	0.0%	5.0%
		FHABS 2006-HE2 HELOC	118		B	0.0%	3.0%
		CSAB 2006-3	118		CCC	0.0%	46.3%
		Countrywide HELOC 2005-C	105		CCC	0.1%	10.5%
		MARM 2007-1 (FKA MASTR 2007-OA1) (includes $0.7 million purchased, 1% owned)¹	102		CCC	0.0%	36.1%
		Taylor Bean & Whitaker 2007-2 (includes $23.8 million purchased, 28% owned)¹	84		CCC	0.0%	21.4%
		Soundview Home Loan Trust 2008-1	78		BB-	19.4%	33.3%
		Lehman Excess Trust 2007-16N	77		CCC	0.0%	43.0%
		CSAB 2006-2 (includes $11.5 million purchased, 15% owned)1	76		CCC	0.0%	41.4%
		FlagStar HELOC 2005-1	72		BB	25.3%	3.2%
		American Home Mortgage Assets Trust 2007-4	72		CCC	0.0%	36.4%
		FlagStar HELOC 2006-2	72		CCC	27.4%	4.7%
		MASTR Asset-Backed Securities Trust 2005-NC2	70		CCC	—%	28.9%
		Terwin Mortgage Trust 2005-16HE	61		CCC	—%	30.3%
		CSMC 2007-3 (includes $8.1 million purchased, 13% owned)1	61		CCC	0.0%	32.3%
		NAAC 2007-S2 (includes $1.8 million purchased, 3% owned)1	58		CCC	0.0%	9.1%
		Terwin Mortgage Trust 2007-6ALT (100% owned)1	54		CCC	0.0%	36.9%
		CWALT Alternative Loan Trust 2007-HY9	54		CCC	0.0%	44.0%
		Countrywide HELOC 2006-H (includes $19.3 million purchased, 36% owned)1	53		CCC	—%	15.5%
		CSAB Mortgage-Backed Trust 2007-1 (includes $9.9 million purchased, 20% owned)1	50		CCC	0.0%	35.3%
		Total U.S. RMBS	$	8,923

1) Represents amounts of gross par which were purchased or obtained as part of loss mitigation strategies and recorded as part of the investment portfolio.

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

28

Assured Guaranty Ltd.

Below Investment Grade Exposures (5 of 5)

As of December 31, 2012

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million (continued)

					Net Par Outstanding		Internal Rating	Current Credit Enhancement
Name or description
U.S. structured finance:
	Other:
		Taberna Preferred Funding IV, LTD			$	292	CCC	20.3%
		Taberna Preferred Funding III, LTD			287		CCC	14.8%
		Alesco Preferred Funding XVI, LTD.			241		B+	12.1%
		Taberna Preferred Funding II, LTD.			220		CCC	20.9%
		Alesco Preferred Funding XVII, LTD.			191		B+	16.5%
		Attentus CDO I Limited			171		BB	39.8%
		Trapeza CDO XI			157		BB-	36.9%
		Taberna Preferred Funding VI, LTD			152		CCC	20.7%
		US Capital Funding IV, LTD			142		B-	9.2%
		Preferred Term Securities XIX, LTD.			140		BB+	32.7%
		Weinstein Film Securitization			135		CCC	N/A
		Alesco Preferred Funding VII			130		BB+	33.0%
		Alesco Preferred Funding VI			130		BB+	32.0%
		Trapeza CDO X, LTD.			124		BB-	40.1%
		Private Other Non-Municipal Transaction (100% owned)1			121		CCC	N/A
		NRG Peaker (100% owned)(1)(2)			116		CCC	N/A
		Preferred Term Securities XVI, LTD.			113		B	30.1%
		Taberna Preferred Funding VIII, LTD			113		BB	47.7%
		Taberna Preferred Funding VIII, LTD			108		BB	47.7%
		National Collegiate Trust Series 2007-4			81		CCC	N/A
		America West Airlines Series 2000-1 G-1			76		BB	N/A
		Conseco Finance Manufactured Housing Series 2001-2			73		CCC	15.3%
		National Collegiate Trust Series 2007-3			68		CCC	N/A
		National Collegiate Trust Series 2006-2			68		BB+	N/A
		CAPCO - Excess SIPC Excess of Loss Reinsurance			63		BB	N/A
		GreenPoint 2000-4			57		CCC	6.9%
		Preferred Term Securities XVIII, LTD.			56		BB	34.9%
		Preferred Term Securities XX, LTD.			52		BB	28.2%
			Subtotal other		$	3,677
				Subtotal U.S. structured finance	$	12,600
Non-U.S. structured finance:
	Ballantyne Re Plc (includes $169.8 million purchased, 34% owned)1				$	500	CC	N/A
	Orkney Re II, Plc				423		CCC	N/A
	Gleneagles Funding LTD (1st Issue)				229		BB	N/A
	FHB 8.95% 2016				126		BB	N/A
	OTP 10% 2012				88		BB+	N/A
	Augusta Funding Limited 07 Perpetual Note Issue				81		BB	N/A
	Private Pooled Corporate Transaction				81		BB	N/A
	Augusta Funding Limited 05 Perpetual Note Issue				80		BB	N/A
	Private Pooled Corporate Transaction				64		BB	N/A
	Private Pooled Corporate Transaction				56		BB	N/A
				Subtotal Non-U.S. structured finance	$	1,728
	Total				$	14,328

1) Represents amounts of gross par which were purchased or obtained as part of loss mitigation strategies and recorded as part of the investment portfolio.

2) Net par shown is net of $72 million of ceded par. The Company owns 100% of the collateral in the insured transaction.

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

29

Assured Guaranty Ltd.

Largest Exposures by Sector (1 of 4)

As of December 31, 2012

(dollars in millions)

50 Largest U.S. Public Finance Exposures

Credit names:	Net Par Outstanding		Internal Rating
New Jersey (State of)	$	4,275	A+
California (State of)	3,452		BBB+
New York (City of) New York	3,241		AA-
Massachusetts (Commonwealth of)	2,732		AA
Chicago (City of) Illinois	2,726		A+
New York (State of)	2,563		A+
Miami-Dade County Florida Aviation Authority - Miami International Airport	2,380		A
Los Angeles California Unified School District	2,263		AA-
Port Authority of New York and New Jersey	2,195		AA-
Puerto Rico (Commonwealth of)	2,175		BBB-
Houston Texas Water and Sewer Authority	2,102		AA-
Philadelphia (City of) Pennsylvania	1,922		BBB
Wisconsin (State of)	1,883		A+
Washington (State of)	1,819		AA
Pennsylvania (Commonwealth of)	1,813		AA-
University of California Board of Regents	1,792		AA
Illinois (State of)	1,720		A
Chicago-O'Hare International Airport	1,649		A
New York MTA Transportation Authority	1,639		A
Michigan (State of)	1,602		A+
Los Angeles California Department of Water & Power - Electric Revenue Bonds	1,601		AA-
New York City Municipal Water Finance Authority	1,595		AA
Illinois Toll Highway Authority	1,571		AA
Miami-Dade County Florida School Board	1,523		A-
Arizona (State of)	1,467		A
Chicago Illinois Public Schools	1,446		A+
Long Island Power Authority	1,446		A-
Atlanta Georgia Water & Sewer System	1,411		BBB+
Massachusetts (Commonwealth of) Water Resources	1,366		AA
Georgia Board of Regents	1,321		A
Philadelphia Pennsylvania School District	1,307		A
Metro Washington Airport Authority	1,270		A+
Puerto Rico Highway and Transportation Authority	1,263		BBB
Pennsylvania Turnpike Commission	1,165		A-
California State University System Trustee	1,123		A+
Skyway Concession Company LLC	1,118		BB
District of Columbia	1,110		A+
Kentucky (Commonwealth of)	1,104		A+
North Texas Tollway Authority	1,094		A
New York State Thruway - Highway Trust Fund	1,044		AA-
Detroit Michigan Sewer	1,040		BBB+
New Jersey Turnpike Authority	1,029		A-
New York State Thruway Authority	1,024		A
Orlando-Orange County Expressway Authority, Florida	1,015		A+
Louisiana (State of) Gas and Fuel Tax	1,006		AA
San Diego County, California Water	983		AA
Broward County Florida School Board	982		A+
Puerto Rico Electric Power Authority	969		BBB+
Garden State Preservation Trust, New Jersey Open Space & Farmland	958		AA
San Diego California Unified School District	955		AA
Total top 50 U.S. public finance exposures	$	82,249

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

30

Assured Guaranty Ltd.

Largest Exposures by Sector (2 of 4)

As of December 31, 2012

(dollars in millions)

50 Largest U.S. Structured Finance Exposures

Credit Name		Net Par Outstanding		Internal Rating	Credit Enhancement
	Fortress Credit Opportunities I, LP.	$	1,328	AA	35.0%
	Stone Tower Credit Funding	1,254		AAA	29.9%
	Synthetic Investment Grade Pooled Corporate CDO	1,188		AAA	13.4%
	Synthetic High Yield Pooled Corporate CDO	978		AAA	40.1%
	Synthetic Investment Grade Pooled Corporate CDO	767		Super Senior	14.8%
	Synthetic Investment Grade Pooled Corporate CDO	763		Super Senior	29.0%
	Synthetic Investment Grade Pooled Corporate CDO	745		Super Senior	28.0%
	Synthetic High Yield Pooled Corporate CDO	734		AAA	37.4%
	Synthetic Investment Grade Pooled Corporate CDO	726		Super Senior	22.5%
	Mizuho II Synthetic CDO	718		A	N/A
	Synthetic Investment Grade Pooled Corporate CDO	655		AAA	15.8%
	Deutsche Alt-A Securities Mortgage Loan 2007-2	645		CCC	0.0%
	ARES Enhanced Credit Opportunities Fund	594		AAA	34.4%
	Eastland CLO, LTD	532		Super Senior	39.2%
	Synthetic Investment Grade Pooled Corporate CDO	516		Super Senior	14.3%
	MABS 2007-NCW (includes $40.9 million purchased, 8% owned)¹	511		B	20.5%
	Denali CLO VII, LTD.	497		AAA	19.7%
	Synthetic High Yield Pooled Corporate CDO	496		AAA	46.7%
	Shenandoah Trust Capital I Term Securities	484		A+	N/A
	Churchill Financial Cayman	467		AAA	35.9%
	Phoenix CLO II	452		AAA	21.2%
	SLM Private Credit Student Trust 2007-A	450		BBB-	15.5%
	LIICA Holdings, LLC	427		AA	N/A
	KKR Financial CLO 2007-1	409		AAA	51.9%
	Castlewood Financial LLC	400		AA	N/A
	Grayson CLO	399		Super Senior	29.7%
	SLM Private Credit Student Loan Trust 2007-6	392		AAA	4.0%
	Synthetic Investment Grade Pooled Corporate CDO	380		Super Senior	29.2%
	Synthetic Investment Grade Pooled Corporate CDO	370		Super Senior	14.2%
	ARES Enhanced Credit Opportunities Fund	369		AAA	34.4%
	Symphony Credit Opportunities Fund	364		AAA	25.9%
	Private Residential Mortgage Transaction	362		B	12.8%
	Stone Tower CLO V	362		Super Senior	28.9%
	SLM Private Credit Student Loan Trust 2006-C	356		BBB-	14.3%
	Countrywide HELOC 2006-I	355		CCC	0.0%
	Option One 2007-FXD2	352		CCC	9.8%
	Private Residential Mortgage Transaction	345		B	13.2%
	MUIR GROVE CLO	345		AAA	21.5%
	Synthetic Investment Grade Pooled Corporate CDO	343		AAA	16.3%
	CIFC Funding 2006-1	342		AAA	23.9%
	CENTURION CDO 9	338		AAA	22.5%
	MortgageIT Securities Corp. Mortgage Loan 2007-2	333		B	5.2%
	Private Other Structured Finance Transaction	328		A-	N/A
	Private Residential Mortgage Transaction	327		CCC	4.7%
	Deutsche Alt-A Securities Mortgage Loan 2007-3	326		B	1.5%
	Cent CDO 15 Limited	307		Super Senior	18.2%
	Private Residential Mortgage Transaction	301		CCC	0.3%
	Prudential Closed Block Reinsurance Treaty	300		A+	N/A
	Fortress Credit Funding III	299		AAA	57.6%
	Cent CDO 12 Limited	293		AAA	23.7%
	Total top 50 U.S. structured finance exposures	$	25,324

1) Represents amounts of gross par which were purchased or obtained as part of loss mitigation strategies and recorded as part of the investment portfolio.

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

31

Assured Guaranty Ltd.

Largest Exposures by Sector (3 of 4)

As of December 31, 2012

(dollars in millions)

25 Largest Non-U.S. Exposures

Credit Name		Net Par Outstanding		Internal Rating
	Quebec Province	$	2,338	A+
	Sydney Airport Finance Company	1,566		BBB
	Thames Water Utility Finance PLC	1,558		A-
	Channel Link Enterprises Finance PLC	963		BBB
	Southern Gas Networks PLC	867		BBB
	Fortress Credit Investments I	778		AAA
	Capital Hospitals (Issuer) PLC	777		BBB-
	Societe des Autoroutes du Nord et de l'Est de France S.A.	755		BBB+
	Campania Region - Healthcare receivable	738		BBB-
	Southern Water Services Limited	707		A-
	Essential Public Infrastructure Capital II	702		Super Senior
	Reliance Rail Finance Pty. Limited	695		BB
	International Infrastructure Pool	690		A-
	International Infrastructure Pool	690		A-
	International Infrastructure Pool	690		A-
	Japan Expressway Holding and Debt Repayment Agency	640		AA
	Central Nottinghamshire Hospitals PLC	569		BBB
	Envestra Limited	558		BBB-
	Synthetic Investment Grade Pooled Corporate CDO	542		Super Senior
	NewHospitals (St Helens & Knowsley) Finance PLC	519		BBB
	Scotland Gas Networks Plc (A2)	509		BBB
	Ballantyne Re Plc (includes $169.8 million purchased, 34% owned)1	500		CC
	Integrated Accomodation Services PLC	499		BBB+
	The Hospital Company (QAH Portsmouth) Limited	497		BBB
	Verbund - Lease and Sublease of Hydro-Electric Equipment	493		AAA
	Total top 25 non-U.S. exposures	$	19,840

1) Represents amounts of gross par which were purchased or obtained as part of loss mitigation strategies and recorded as part of the investment portfolio.

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

32

Assured Guaranty Ltd.

Largest Exposures by Sector (4 of 4)

As of December 31, 2012

(dollars in millions)

10 Largest U.S. Residential Mortgage Servicer Exposures

Servicer:		Net Par Outstanding
	Bank of America, N.A. (1)	$	5,907
	Ocwen Financial Corporation (2)	3,454
	Wells Fargo Bank N.A.	2,233
	Ally Financial, Inc. (3)	1,472
	JPMorgan Chase Bank	1,111
	Specialized Loan Servicing LLC	992
	Select Portfolio Servicing, Inc.	756
	OneWest Bank Group LLC	440
	Carrington Mortgage Services, LLC	327
	First Horizon National Corporation	284
	Total top 10 U.S. residential mortgage servicer exposures	$	16,976

10 Largest U.S. Healthcare Exposures

Credit Name:		Net Par Outstanding		Internal Rating	State
	CHRISTUS Health	$	444	A+	TX
	MultiCare Health System	444		A+	WA
	Methodist Healthcare, TN	374		A	TN
	Catholic Health Partners	336		A+	OH
	Children's National Medical Center (DC)	329		BBB+	DC
	Bon Secours Health System Obligated Group	326		A-	MD
	Carolina HealthCare System	319		AA-	NC
	Iowa Health System	318		A+	IA
	Virtua Health - New Jersey	315		A+	NJ
	Catholic Health Initiatives	295		AA	CO
	Total top 10 U.S. healthcare exposures	$	3,500

1) Includes Countrywide Home Loans Servicing LP.

2) Includes Homeward Residential Inc.

3) Includes GMAC Mortgage LLC, Residential Funding Corp and Homecomings Financial Network, Inc.

Note: Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

33

Assured Guaranty Ltd.

Rollforward of Net Expected Loss and LAE to be Paid

(dollars in millions)

Rollforward of Net Expected Loss and LAE to be Paid for the Three Months Ended December 31, 2012

Financial Guaranty Insurance Contracts and Credit Derivatives				Net Expected Loss to be Paid as of September 30, 2012			Economic Loss Development During 4Q-12(1)			(Paid) Recovered Losses During 4Q-12			Net Expected Loss to be Paid as of December 31, 2012
U.S. RMBS
	First lien:
		Prime first lien		$	5		$	1		$	—		$	6
		Alt-A first lien		311			35			(31		)	315
		Option ARMs		(90		)	27			(68		)	(131		)
		Subprime first lien		239			10			(7		)	242
			Total first lien	465			73			(106		)	432
	Second lien:
		Closed end seconds		(25		)	(10		)	(4		)	(39		)
		HELOC		(107		)	35			(39		)	(111		)
			Total second lien	(132		)	25			(43		)	(150		)
Total U.S. RMBS				333			98			(149		)	282
TruPS				53			(24		)	(2		)	27
Other structured finance				315			(5		)	2			312
U.S. public finance				10			9			(12		)	7
Non-U.S. public finance				46			6			—			52
			Subtotal	757			84			(161		)	680
Other				(4		)	(11		)	12			(3		)
Total				$	753		$	73		$	(149	)	$	677

Rollforward of Net Expected Loss and LAE to be Paid for the Year Ended December 31, 2012

Financial Guaranty Insurance Contracts and Credit Derivatives				Net Expected Loss to be Paid as of December 31, 2011			Economic Loss Development During 2012(1)			(Paid) Recovered Losses During 2012			Net Expected Loss to be Paid as of December 31, 2012
U.S. RMBS
	First lien:
		Prime first lien		$	2		$	4		$	—		$	6
		Alt-A first lien		295			62			(42		)	315
		Option ARMs		210			39			(380		)	(131		)
		Subprime first lien		241			49			(48		)	242
			Total first lien	748			154			(470		)	432
	Second lien:
		Closed end seconds		(86		)	(10		)	57			(39		)
		HELOC		(31		)	44			(124		)	(111		)
			Total second lien	(117		)	34			(67		)	(150		)
Total U.S. RMBS				631			188			(537		)	282
TruPS				64			(30		)	(7		)	27
Other structured finance				342			2			(32		)	312
U.S. public finance				16			74			(83		)	7
Non-U.S. public finance				51			221			(220		)	52
			Subtotal	1,104			455			(879		)	680
Other				2			(17		)	12			(3		)
Total				$	1,106		$	438		$	(867	)	$	677

1) Includes the effect of changes in the Company's estimate of future recovery on representations and warranties ("R&W").

34

Assured Guaranty Ltd.

Financial Guaranty Insurance and Credit Derivative U.S. RMBS R&W Benefit Development

(dollars in millions)

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Benefit Development for the Three Months Ended December 31, 2012

			Future Net R&W Benefit at September 30, 2012		R&W Economic Loss Development During 4Q-12			R&W Recovered During 4Q-12			Future Net R&W Benefit at December 31, 2012
Financial guaranty insurance:
	Prime first lien		$	4	$	—		$	—		$	4
	Alt-A first lien		159		1			(2		)	158
	Option ARMs		607		33			(66		)	574
	Subprime first lien		104		5			—			109
	Closed end seconds		136		5			(3		)	138
	HELOC		120		30			—			150
		Subtotal	1,130		74			(71		)	1,133
Credit derivatives:
	Alt-A first lien		225		(5		)	—			220
	Option ARMs		16		1			—			17
		Subtotal	241		(4		)	—			237
Total			$	1,371	$	70		$	(71	)	$	1,370

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS R&W Benefit Development for the Year Ended December 31, 2012

			Future Net R&W Benefit at December 31, 2011		R&W Economic Loss Development During 2012		R&W Recovered During 2012			Future Net R&W Benefit at December 31, 2012
Financial guaranty insurance:
	Prime first lien		$	3	$	1	$	—		$	4
	Alt-A first lien		203		24		(69		)	158
	Option ARMs		714		83		(223		)	574
	Subprime first lien		101		8		—			109
	Closed end seconds		224		5		(91		)	138
	HELOC		190		36		(76		)	150
		Subtotal	1,435		157		(459		)	1,133
Credit derivatives:
	Alt-A first lien		204		16		—			220
	Option ARMs		11		6		—			17
		Subtotal	215		22		—			237
Total			$	1,650	$	179	$	(459	)	$	1,370

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Policies with R&W Benefit

			Number of Risks as of		Debt Service as of
			December 31, 2012	December 31, 2011	December 31, 2012		December 31, 2011
Financial guaranty insurance:
	Prime first lien		1	1	$	35	$	42
	Alt-A first lien		19	22	1,378		1,733
	Option ARMs		9	12	764		1,460
	Subprime first lien		5	5	820		906
	Closed end seconds		4	4	196		361
	HELOC		7	15	549		2,978
		Subtotal	45	59	3,742		7,480
Credit derivatives:
	Alt-A first lien		7	7	2,652		2,939
	Option ARMs		1	1	337		383
		Subtotal	8	8	2,989		3,322
Total			53	67	$	6,731	$	10,802

35

Assured Guaranty Ltd.

Losses Incurred

As of December 31, 2012

(dollars in millions)

Financial Guaranty Insurance Contracts and Credit Derivatives				Total Net Par Outstanding for BIG Transactions (1)		4Q-12 Losses Incurred			2012 Losses Incurred			Net Reserve and Credit Impairment			Net Salvage and Subrogation Assets			Net Expected Loss to be Expensed
U.S. RMBS
	First lien:
		Prime first lien		$	475	$	—		$	2		$	3		$	—		$	1
		Alt-A first lien		3,575		48			89			196			—			120
		Option ARMs		1,096		46			147			71			216			97
		Subprime first lien		2,337		12			51			152			—			93
			Total first lien	7,483		106			289			422			216			311
	Second lien:
		Closed end seconds		404		25			31			(5		)	72			56
		HELOC		2,718		28			49			37			196			161
			Total second lien	3,122		53			80			32			268			217
Total U.S. RMBS				10,605		159			369			454			484			528
TruPS				2,872		(6		)	(43		)	16			—			1
Other structured finance				3,019		(20		)	3			282			4			36
U.S. public finance				4,603		3			50			104			134			46
Non-U.S. public finance				2,293		2			234			31			—			14
			Subtotal	23,392		138			613			887			622			625
Effect of consolidating FG VIEs				—		(44		)	(45		)	(64		)	(217		)	(156		)
			Subtotal	23,392		94			568			823			405			469
Other				—		(11		)	(17		)	2			5			—
Total				$	23,392	$	83		$	551		$	825		$	410		$	469

		Insurance Reserves		Credit Impairment on Credit Derivative Contracts (2)		Reserve and Credit Impairment		Salvage and Subrogation Recoverable			Net
Gross		$	601	$	283	$	884	$	456		$	428
Ceded		58		1		59		46		(3)	13
	Net	$	543	$	282	$	825	$	410		$	415

1) As of December 31, 2012, securities purchased for loss mitigation purposes represented $1,133 million of gross par outstanding. In addition, under the terms of certain credit derivative contracts, the Company has obtained the underlying collateral of transactions and recorded it in invested assets in the consolidated balance sheets. Such amounts totaled $220 million in gross par outstanding.

2) Credit derivative assets and liabilities recorded on the balance sheet considers estimates of expected losses.

3) Recorded in "reinsurance balances payable, net" on the consolidated balance sheets.

36

Assured Guaranty Ltd.

Effect of Adoption of New Accounting Guidance on Acquisition Costs

(dollars in millions, except per share amounts)

		Year Ended December 31,
		2011			2010			2009			2008
GAAP Income Statement Data
	Amortization of deferred acquisition costs	$	(14	)	$	(12	)	$	(10	)	$	(8	)
	Other operating expenses	19			(26		)	17			22
	Total expenses	5			15			7			14
	Income (loss) before income taxes	(5		)	(15		)	(7		)	(14		)
	Net income (loss) attributable to Assured Guaranty Ltd.	(3		)	(9		)	(4		)	(9		)
	Net income (loss) attributable to Assured Guaranty Ltd. per diluted share	(0.02		)	(0.05		)	(0.03		)	(0.10		)
GAAP Balance Sheet Data
	Deferred acquisition costs	(99		)	(94		)	(80		)	(72		)
	Shareholders’ equity attributable to Assured Guaranty Ltd.	(67		)	(64		)	(55		)	(50		)
	Book value attributable to Assured per share	(0.37		)	(0.35		)	(0.30		)	(0.56		)
Non-GAAP Financial Measures(1)
	Operating income	(3		)	(9		)	(5		)	(9		)
	Operating income per diluted share	(0.02		)	(0.05		)	(0.03		)	(0.11		)
	Operating shareholders' equity	(67		)	(64		)	(55		)	(50		)
	Operating shareholders' equity per share	(0.37		)	(0.35		)	(0.30		)	(0.56		)

1) The adoption of new accounting guidance on acquisition costs had no effect on adjusted book value and adjusted book value per share.

37

Assured Guaranty Ltd.

Summary Financial and Statistical Data

(dollars in millions, except per share amounts)

			Year Ended December 31,
			2012			2011		2010		2009		2008
GAAP Summary Income Statement Data
	Net earned premiums		$	853		$	920	$	1,187	$	930	$	261
	Net investment income		404			396		361		262		163
	Realized gains and other settlements on credit derivatives		(108		)	6		153		164		118
	Total expenses		841			790		779		808		455
	Income (loss) before income taxes		132			1,029		534		109		98
	Net income (loss) attributable to Assured Guaranty Ltd.		110			773		484		82		60
	Net income (loss) attributable to Assured Guaranty Ltd. per diluted share		0.57			4.16		2.56		0.63		0.67
GAAP Summary Balance Sheet Data
	Total investments and cash		$	11,223		$	11,314	$	10,849	$	11,013	$	3,644
	Total assets		17,242			17,709		19,370		16,449		4,505
	Unearned premium reserve		5,207			5,963		6,973		8,381		1,234
	Loss and LAE reserve		601			679		574		300		197
	Long-term debt		836			1,038		1,053		1,066		347
	Shareholders’ equity attributable to Assured Guaranty Ltd.		4,994			4,652		3,670		3,455		1,876
	Book value attributable to Assured per share		25.74			25.52		19.97		18.76		20.62
Non-GAAP Financial Measures
	Operating income		$	535		$	601	$	655	$	278	$	65
	Operating income per diluted share		2.81			3.24		3.46		2.15		0.73
	Adjusted book value		9,151			8,987		8,989		8,887		3,818
	PVP		210			243		363		640		823
Other Financial Information (GAAP Basis)
	Net debt service outstanding (end of period)		$	782,180		$	845,665	$	927,143	$	958,265	$	348,816
	Gross debt service outstanding (end of period)		834,950			936,132		1,029,982		1,095,037		354,858
	Net par outstanding (end of period)		519,893			558,048		617,131		640,422		222,722
	Gross par outstanding (end of period)		552,039			614,342		681,248		726,929		227,164
Other Financial Information (Statutory Basis)(1)
	Net debt service outstanding (end of period)		$	757,914		$	829,545	$	905,131	$	942,193	$	348,816
	Gross debt service outstanding (end of period)		809,341			917,719		1,004,096		1,076,039		354,858
	Net par outstanding (end of period)		497,399			543,100		598,843		626,274		222,722
	Gross par outstanding (end of period)		528,318			597,290		659,765		709,786		227,164
	Consolidated qualified statutory capital		5,943			5,688		4,915		4,841		2,310
	Consolidated policyholders' surplus and reserves		10,288			10,626		10,247		10,409		3,652
	Ratios:
		Par insured to statutory capital	84		:1	95:1		122:1		129:1		96:1
		Capital ratio(2)	128		:1	146:1		184:1		195:1		151:1
		Financial resources ratio(3)	61		:1	65:1		72:1		72:1		70:1
	Gross debt service written:
		Public finance - U.S.	$	25,252		$	26,630	$	48,990	$	87,940	$	68,265
		Public finance - non-U.S.	40			208		51		894		3,350
		Structured finance - U.S.	623			1,731		2,962		2,501		13,972
		Structured finance - non-U.S.	—			—		—		—		5,490
	Total gross debt service written		$	25,915		$	28,569	$	52,003	$	91,335	$	91,077
	Net debt service written		$	25,915		$	28,569	$	52,003	$	91,335	$	89,871
	Net par written		16,816			16,892		30,759		49,759		55,418
	Gross par written		16,816			16,892		30,759		49,921		56,140

1) Statutory amounts prepared on a consolidated basis. The NAIC Annual Statements for U.S. Domiciled Insurance Subsidiaries are prepared on a stand-alone basis.

2) The capital ratio is calculated by dividing net debt service outstanding by qualified statutory capital.

3) The financial resources ratio is calculated by dividing net debt service outstanding by total claims paying resources.

Note: Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

38

Glossary

Net Par Outstanding and Internal Ratings

Internal Rating for the Company’s ratings scale is similar to that used by the nationally recognized statistical rating organizations; however, the ratings in the tables may not be the same as ratings assigned by any such rating agency. The super senior category, which is not generally used by rating agencies, is used by the Company in instances where Assured Guaranty's AAA-rated exposure on its internal rating scale has additional credit enhancement due to either (a) the existence of another security rated AAA that is subordinated to Assured Guaranty's exposure or (b) Assured Guaranty's exposure benefiting from a different form of credit enhancement that would pay any claims first in the event that any of the exposures incurs a loss, and such credit enhancement, in management's opinion, causes Assured Guaranty's attachment point to be materially above the AAA attachment point.

Net par outstanding is insured par exposure net of reinsurance cessions.

Performance Indicators

The performance information described below is obtained from third parties and/or provided by the trustee and may be subject to restatement or correction:

60+ Day Delinquenciesare defined as loans that are greater than 60 days delinquent and all loans that are in foreclosure, bankruptcy or real estate owned divided by current collateral balance.

Average Credit Enhancementis intended to provide a measure of the amount of equity and/or subordinated tranches that are junior in the capital structure to Assured Guaranty’s exposure, expressed as a percentage of the total transaction size, and reflects any reduction of that credit support resulting from defaults or other factors. For transactions where excess spread may be available to absorb certain losses, the amounts shown do not include any benefit from excess spread. The calculation methodologies differ for the various asset classes to reflect differences in transaction structures in order to provide a measure that management believes is comparable across asset classes.

Cumulative Lossesare defined as net charge-offs on the underlying loan collateral divided by the original collateral balance.

Pool Factoris the percentage of the current collateral balance divided by the original collateral balance of the transactions at inception.

Subordinationrepresents the sum of subordinate tranches and overcollateralization, expressed as a percentage of total transaction size, and does not include any benefit from excess spread collections that may be used to absorb losses. Many of the closed-end second lien RMBS transactions insured by the Company have unique structures whereby the collateral may be written down for losses without a corresponding write-down of the obligations insured by the Company. Many of these transactions are currently undercollateralized, with the principal amount of collateral being less than the principal amount of the obligation insured by the Company. The Company is not required to pay principal shortfalls until legal maturity (rather than making timely principal payments), and takes the undercollateralization into account when estimating expected losses for these transactions.

Sectors

Below are brief descriptions of selected types of public and structured finance obligations that the Company insures and reinsures. For a more complete description, please refer to Assured Guaranty Ltd.’s Annual Report on Form 10-K for December 31, 2012.

Public Finance:

General Obligation Bonds are full faith and credit bonds that are issued by states, their political subdivisions and other municipal issuers, and are supported by the general obligation of the issuer to pay from available funds and by a pledge of the issuer to levy ad valorem taxes in an amount sufficient to provide for the full payment of the bonds.

Tax-Backed Bonds are obligations that are supported by the issuer from specific and discrete sources of taxation. They include tax-backed revenue bonds, general fund obligations and lease revenue bonds. Tax-backed obligations may be secured by a lien on specific pledged tax revenues, such as a gasoline or excise tax, or incrementally from growth in property tax revenue associated with growth in property values. These obligations also include obligations secured by special assessments levied against property owners and often benefit from issuer covenants to enforce collections of such assessments and to foreclose on delinquent properties. Lease revenue bonds typically are general fund obligations of a municipality or other governmental authority that are subject to annual appropriation or abatement; projects financed and subject to such lease payments ordinarily include real estate or equipment serving an essential public purpose. Bonds in this category also include moral obligations of municipalities or governmental authorities.

Municipal Utility Bonds are obligations of all forms of municipal utilities, including electric, water and sewer utilities and resource recovery revenue bonds. These utilities may be organized in various forms, including municipal enterprise systems, authorities or joint action agencies.

Transportation Bonds include a wide variety of revenue-supported bonds, such as bonds for airports, ports, tunnels, municipal parking facilities, toll roads and toll bridges.

Healthcare Bonds are obligations of healthcare facilities, including community-based hospitals and systems, as well as of health maintenance organizations and long-term care facilities.

39

Glossary (continued)

Sectors (continued)

Higher Education Bonds are obligations secured by revenue collected by either public or private secondary schools, colleges and universities. Such revenue can encompass all of an institution’s revenue, including tuition and fees, or in other cases, can be specifically restricted to certain auxiliary sources of revenue.

Infrastructure Bonds include obligations issued by a variety of entities engaged in the financing of infrastructure projects, such as roads, airports, ports, social infrastructure and other physical assets delivering essential services supported by long-term concession arrangements with a public sector entity.

Investor-Owned Utility Bonds are obligations primarily backed by investor-owned utilities, first mortgage bond obligations of for-profit electric or water utilities providing retail, industrial and commercial service, and also include sale-leaseback obligation bonds supported by such entities.

Housing Revenue Bonds are obligations relating to both single and multi-family housing, issued by states and localities, supported by cash flow and, in some cases, insurance from entities such as the Federal Housing Administration.

Regulated Utilities Obligations are issued by government-regulated providers of essential services and commodities, including electric, water and gas utilities. The majority of the Company's international regulated utility business is conducted in the United Kingdom.

Pooled Infrastructure Obligations are synthetic asset-backed obligations that take the form of CDS obligations or credit‑-linked notes that reference either infrastructure finance obligations or a pool of such obligations, with a defined deductible to cover credit risks associated with the referenced obligations.

Other Public Finance primarily includes government insured student loans, government-sponsored project finance and structured municipal transactions, which includes excess of loss reinsurance on portfolios of municipal credits.

Structured Finance:

Pooled Corporate Obligationsare securities primarily backed by various types of corporate debt obligations, such as secured or unsecured bonds, bank loans or loan participations and trust preferred securities. These securities are often issued in ‘‘tranches,’’ with subordinated tranches providing credit support to the more senior tranches. The Company’s financial guaranty exposures generally are to the more senior tranches of these issues.

Residential Mortgage-Backed Securities (‘‘RMBS’’) and Home Equity Securitiesare obligations backed by closed-end first mortgage loans and closed- and open-end second mortgage loans or home equity loans on one-to-four family residential properties, including condominiums and cooperative apartments. First mortgage loan products in these transactions include fixed rate, adjustable rate (‘‘ARM’’) and option adjustable-rate (‘‘Option ARM’’) mortgages. The credit quality of borrowers covers a broad range, including ‘‘prime’’, ‘‘subprime’’ and ‘‘Alt-A’’. A prime borrower is generally defined as one with strong risk characteristics as measured by factors such as payment history, credit score, and debt-to-income ratio. A subprime borrower is a borrower with higher risk characteristics, usually as determined by credit score and/or credit history. An Alt-A borrower is generally defined as a prime quality borrower that lacks certain ancillary characteristics, such as fully documented income.

Additional insured obligations within RMBS include Home Equity Lines of Credit (“HELOCs”), whichrefers to a type of residential mortgage-backed transaction backed by second-lien loan collateral consisting of home equity lines of credit. U.S. Prime First Lien is a type of residential mortgage-backed securities transaction backed primarily by prime first-lien loan collateral plus an insignificant amount of other miscellaneous RMBS transactions.

CBOs/CLOs (collateralized bond obligations and collateralized loan obligations)are asset-backed securities largely backed by non-investment grade/high yield collateral.

Commercial Mortgage-Backed Securities (‘‘CMBS’’)are obligations backed by pools of commercial mortgages. The collateral supporting CMBS include office, multifamily, retail, hotel, industrial and other specialized or mixed-use properties.

Financial Productsis the guaranteed investment contracts ("GICs") portion of the former Financial Products Business of AGMH. AGM has issued financial guaranty insurance policies on the GICs and in respect of the GICs business that cannot be revoked or cancelled. Assured Guaranty is indemnified against exposure to the former financial products business by Dexia SA and certain of its affiliates. In addition, the French and Belgian governments have issued guaranties in respect of the GICs portion of the financial products business. The financial products business is currently being run off.

Consumer Receivables Securitiesare obligations backed by non-mortgage consumer receivables, such as automobile loans and leases, credit card receivables and other consumer receivables.

Commercial Receivables Securitiesare obligations backed by equipment loans or leases, fleet auto financings, business loans and trade receivables. Credit support is derived from the cash flows generated by the underlying obligations, as well as property or equipment values as applicable.

40

Glossary (continued)

Sectors (continued)

Insurance Securitization Securitiesare obligations secured by the future earnings from pools of various types of insurance/reinsurance policies and income produced by invested assets.

Structured Credit Securitiesinclude program-wide credit enhancement for commercial paper conduits in the U.S., and securities issued in whole business securitizations and intellectual property securitizations. Program-wide credit enhancement generally involves insuring against the default of ABS in a bank-sponsored commercial paper conduit. Securities issued in whole business and intellectual property securitizations are backed by revenue-producing assets sold to a limited-purpose company by an operating company, including franchise agreements, lease agreements, intellectual property and real property.

Other Structured Finance Securitiesare obligations backed by assets not generally described in any of the other described categories. One such type of asset is a tax benefit to be realized by an investor in one of the Federal or state programs that permit such investor to receive a credit against taxes (such as Federal corporate income tax or state insurance premium tax) for making qualified investments in specified enterprises, typically located in designated low-income areas.

41

Non-GAAP Financial Measures

The Company references financial measures that are not in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Management and the board of directors utilize non-GAAP measures in evaluating the Company’s financial performance and as a basis for determining senior management incentive compensation. By providing these non-GAAP financial measures, investors, analysts and financial news reporters have access to the same information that management reviews internally. In addition, Assured Guaranty’s presentation of non-GAAP financial measures is consistent with how analysts calculate their estimates of Assured Guaranty’s financial results in their research reports on Assured Guaranty and with how investors, analysts and the financial news media evaluate Assured Guaranty’s financial results.

The following paragraphs define each non-GAAP financial measure and describe why it is useful. A reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure, if available, is presented within this financial supplement. Non-GAAP financial measures should not be viewed as substitutes for their most directly comparable GAAP measures.

Operating Income: Management believes that operating income is a useful measure because it clarifies the understanding of the underwriting results of the Company’s financial guaranty insurance business, and also includes financing costs and net investment income, and enables investors and analysts to evaluate the Company’s financial results as compared with the consensus analyst estimates distributed publicly by financial databases. Operating income is defined as net income (loss) attributable to Assured Guaranty Ltd., as reported under GAAP, adjusted for the following:

1) Elimination of the after-tax realized gains (losses) on the Company’s investments, except for gains and losses on securities classified as trading. The timing of realized gains and losses, which depends largely on market credit cycles, can vary considerably across periods. The timing of sales is largely subject to the Company’s discretion and influenced by market opportunities, as well as the Company’s tax and capital profile. Trends in the underlying profitability of the Company’s business can be more clearly identified without the fluctuating effects of these transactions.

2) Elimination of the after-tax non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount in excess of the present value of the expected estimated economic credit losses and non-economic payments. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss. Additionally, such adjustments present all financial guaranty contracts on a more consistent basis of accounting, whether or not they are subject to derivative accounting rules.

3) Elimination of the after-tax fair value gains (losses) on the Company’s committed capital securities. Such amounts are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

4) Elimination of the after-tax foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables constitute a significant portion of the net premium receivable balance and represent the present value of future contractual or expected collections. Therefore, the current period’s foreign exchange remeasurement gains (losses) are not necessarily indicative of the total foreign exchange gains (losses) that the Company will ultimately recognize.

5) Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.

Operating Shareholders’ Equity: Management believes that operating shareholders’ equity is a useful measure because it presents the equity of Assured Guaranty Ltd. with all financial guaranty contracts accounted for on a more consistent basis and excludes fair value adjustments that are not expected to result in economic loss. Many investors, analysts and financial news reporters use operating shareholders’ equity as the principal financial measure for valuing Assured Guaranty Ltd.’s current share price or projected share price and also as the basis of their decision to recommend, buy or sell Assured Guaranty Ltd.’s common shares. Many of the Company’s fixed income investors also use operating shareholders’ equity to evaluate the Company’s capital adequacy. Operating shareholders’ equity is the basis of the calculation of adjusted book value (see below). Operating shareholders’ equity is defined as shareholders’ equity attributable to Assured Guaranty Ltd. , as reported under GAAP, adjusted for the following:

1) Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.

2) Elimination of the after-tax non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount in excess of the present value of the expected estimated economic credit losses and non-economic payments. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

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Non-GAAP Financial Measures (continued)

Operating Shareholders’ Equity (continued):

3) Elimination of the after-tax fair value gains (losses) on the Company’s committed capital securities. Such amounts are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

4) Elimination of the after-tax unrealized gains (losses) on the Company’s investments, that are recorded as a component of accumulated other comprehensive income ("AOCI") (excluding foreign exchange remeasurement). The AOCI component of the fair value adjustment on the investment portfolio is not deemed economic because the Company generally holds these investments to maturity and therefore should not recognize an economic gain or loss.

Operating return on equity (‘‘Operating ROE’’): Operating ROE represents operating income for a specified period divided by the average of operating shareholders’ equity at the beginning and the end of that period. Management believes that operating ROE is a useful measure to evaluate the Company’s return on invested capital. Many investors, analysts and members of the financial news media use operating ROE to evaluate Assured Guaranty Ltd.’s share price and as the basis of their decision to recommend, buy or sell the Assured Guaranty Ltd. common shares. Quarterly and year-to-date operating ROE are calculated on an annualized basis.

Adjusted Book Value: Management believes that adjusted book value is a useful measure because it enables an evaluation of the net present value of the Company’s in-force premiums and revenues in addition to operating shareholders’ equity. The premiums and revenues included in adjusted book value will be earned in future periods, but actual earnings may differ materially from the estimated amounts used in determining current adjusted book value due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults and other factors. Many investors, analysts and financial news reporters use adjusted book value to evaluate Assured Guaranty Ltd.’s share price and as the basis of their decision to recommend, buy or sell the Assured Guaranty Ltd. common shares. Adjusted book value is operating shareholders’ equity, as defined above, further adjusted for the following:

1) Elimination of after-tax deferred acquisition costs, net. These amounts represent net deferred expenses that have already been paid or accrued and will be expensed in future accounting periods.

2) Addition of the after-tax net present value of estimated net future credit derivative revenue. See below.

3) Addition of the after-tax value of the unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed, net of reinsurance. This amount represents the expected future net earned premiums, net of expected losses to be expensed. Net expected losses to be expensed are not reflected in GAAP equity.

Net present value of estimated net future credit derivative revenue: Management believes that this amount is a useful measure because it enables an evaluation of the value of future estimated credit derivative revenue. There is no corresponding GAAP financial measure. This amount represents the present value of estimated future revenue from the Company’s credit derivative in-force book of business, net of reinsurance, ceding commissions and premium taxes for contracts without expected economic losses, and is discounted at 6%. Estimated net future credit derivative revenue may change from period to period due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults or other factors that affect par outstanding or the ultimate maturity of an obligation.

PVP or present value of new business production: Management believes that PVP is a useful measure because it enables the evaluation of the value of new business production for Assured Guaranty by taking into account the value of estimated future installment premiums on all new contracts underwritten in a reporting period as well as premium supplements and additional installment premium on existing contracts as to which the issuer has the right to call the insured obligation but has not exercised such right,  whether in insurance or credit derivative contract form, which GAAP gross premiums written and the net credit derivative premiums received and receivable portion of net realized gains and other settlement on credit derivatives (“Credit Derivative Revenues”) do not adequately measure. PVP in respect of financial guaranty contracts written in a specified period is defined as gross upfront and installment premiums received and the present value of gross estimated future installment premiums, in each case, discounted at 6%. For purposes of the PVP calculation, management discounts estimated future installment premiums on insurance contracts at 6%, while under GAAP, these amounts are discounted at a risk free rate. Additionally, under GAAP, management records future installment premiums on financial guaranty insurance contracts covering non-homogeneous pools of assets based on the contractual term of the transaction, whereas for PVP purposes, management records an estimate of the future installment premiums the Company expects to receive, which may be based upon a shorter period of time than the contractual term of the transaction. Actual future net earned or written premiums and Credit Derivative Revenues may differ from PVP due to factors including, but not limited to, changes in foreign exchange rates, prepayment speeds, terminations, credit defaults, or other factors that affect par outstanding or the ultimate maturity of an obligation.

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Assured Guaranty Ltd.    

30 Woodbourne Avenue

Hamilton HM 08

Bermuda

(441) 279-5705

www.assuredguaranty.com

Contacts:

Equity and Fixed Income Investors:

Robert Tucker

Managing Director, Investor Relations and Corporate Communications

(212) 339-0861

rtucker@assuredguaranty.com

Michael Walker

Managing Director, Fixed Income Investor Relations

(212) 261-5575

mwalker@assuredguaranty.com

Ross Aron

Vice President, Equity Investor Relations

(212) 261-5509

raron@assuredguaranty.com

Media:

Ashweeta Durani

Vice President, Corporate Communications

(212) 408-6042

adurani@assuredguaranty.com