Outstanding Exposure

The Company’s financial guaranty contracts are written in either insurance or credit derivative form, but collectively are considered financial guaranty contracts. The Company seeks to limit its exposure to losses by underwriting obligations that are investment grade at inception, or in the case of restructurings of troubled credits, the Company may underwrite new issuances that one or more of the rating agencies may rate below-investment-grade ("BIG") as part of its loss mitigation strategy. The Company diversifies its insured portfolio across asset classes and, in the structured finance portfolio, maintains rigorous subordination or collateralization requirements. Reinsurance is utilized in order to reduce net exposure to certain insured transactions.

Public finance obligations insured by the Company consist primarily of general obligation bonds supported by the taxing powers of U.S. state or municipal governmental authorities, as well as tax-supported bonds, revenue bonds and other obligations supported by covenants from state or municipal governmental authorities or other municipal obligors to impose and collect fees and charges for public services or specific infrastructure projects. The Company also includes within public finance obligations those obligations backed by the cash flow from leases or other revenues from projects serving substantial public purposes, including utilities, toll roads, health care facilities and government office buildings.

Structured finance obligations insured by the Company are generally issued by special purpose entities, including variable interest entities ("VIEs"), and backed by pools of assets having an ascertainable cash flow or market value or other specialized financial obligations. Some of these VIEs are consolidated as described in Note 10, Consolidated Variable Interest Entities. Unless otherwise specified, the outstanding par and Debt Service amounts presented in this note include outstanding exposures on VIEs whether or not they are consolidated.

Significant Risk Management Activities

The Portfolio Risk Management Committee, which includes members of senior management and senior credit and surveillance officers, sets specific risk policies and limits and is responsible for enterprise risk management, establishing the Company's risk appetite, credit underwriting of new business, surveillance and work-out.

Surveillance personnel are responsible for monitoring and reporting on all transactions in the insured portfolio. The primary objective of the surveillance process is to monitor trends and changes in transaction credit quality, detect any deterioration in credit quality, and recommend to management such remedial actions as may be necessary or appropriate. All transactions in the insured portfolio are assigned internal credit ratings, and surveillance personnel are responsible for recommending adjustments to those ratings to reflect changes in transaction credit quality.

Work-out personnel are responsible for managing work-out and loss mitigation situations, working with surveillance and legal personnel (as well as outside vendors) as appropriate. They develop strategies for the Company to enforce its contractual rights and remedies and to mitigate its losses, engage in negotiation discussions with transaction participants and, when necessary, manage (along with legal personnel) the Company's litigation proceedings.

Surveillance Categories

The Company segregates its insured portfolio into investment grade and BIG surveillance categories to facilitate the appropriate allocation of resources to monitoring and loss mitigation efforts and to aid in establishing the appropriate cycle for periodic review for each exposure. BIG exposures include all exposures with internal credit ratings below BBB-. The Company’s internal credit ratings are based on internal assessments of the likelihood of default and loss severity in the event of default. Internal credit ratings are expressed on a ratings scale similar to that used by the rating agencies and are generally reflective of an approach similar to that employed by the rating agencies, except that the Company's internal credit ratings focus on future performance rather than lifetime performance.

The Company monitors its investment grade credits to determine whether any new credits need to be internally downgraded to BIG and refreshes its internal credit ratings on individual credits in quarterly, semi-annual or annual cycles based on the Company’s view of the credit’s quality, loss potential, volatility and sector. Ratings on credits in sectors identified as under the most stress or with the most potential volatility are reviewed every quarter. The Company’s credit ratings on assumed credits are based on the Company’s reviews of low-rated credits or credits in volatile sectors, unless such information is not available, in which case, the ceding company’s credit rating of the transactions are used. The Company models the performance of many of its structured finance transactions as part of its periodic internal credit rating review of them. The Company models most assumed residential mortgage-backed security ("RMBS") credits with par above $1 million, as well as certain RMBS credits below that amount.

Credits identified as BIG are subjected to further review to determine the probability of a loss. See Note 6, Expected Loss to be Paid, for additional information. Surveillance personnel then assign each BIG transaction to the appropriate BIG surveillance category based upon whether a future loss is expected and whether a claim has been paid. For surveillance purposes, the Company calculates present value using a constant discount rate of 4.5%-5% depending on the insurance subsidiary. (A risk-free curve rate is used for calculating the expected loss for financial statement measurement purposes.)

More extensive monitoring and intervention is employed for all BIG surveillance categories, with internal credit ratings reviewed quarterly. The Company expects “future losses” on a transaction when the Company believes there is at least a 50% chance that, on a present value basis, it will pay more claims over the future of that transaction than it will have reimbursed. The three BIG categories are:


•	BIG Category 1: Below-investment-grade transactions showing sufficient deterioration to make future losses possible, but for which none are currently expected.


•	BIG Category 2: Below-investment-grade transactions for which future losses are expected but for which no claims (other than liquidity claims which is a claim that the Company expects to be reimbursed within one year) have yet been paid.


•	BIG Category 3: Below-investment-grade transactions for which future losses are expected and on which claims (other than liquidity claims) have been paid.

Components of Outstanding Exposure

Unless otherwise noted, ratings disclosed herein on the Company's insured portfolio reflect its internal ratings. The Company classifies 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. The Company excludes amounts attributable to loss mitigation securities (unless otherwise indicated) from par and Debt Service outstanding, because it manages such securities as investments and not insurance exposure.

Financial Guaranty

Debt Service Outstanding



	Gross Debt Service Outstanding				Net Debt Service Outstanding
	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
	(in millions)
Public finance	$	587,245	$	650,924	$	553,612	$	610,011
Structured finance	59,477		86,456		56,010		80,524
Total financial guaranty	$	646,722	$	737,380	$	609,622	$	690,535

In addition to the amounts shown in the table above, the Company’s net mortgage guaranty insurance debt service was approximately $127 million as of December 31, 2014 related to loans originated in Ireland and $152 million as of December 31, 2013 related to loans originated in Ireland and U.K..

Financial Guaranty Portfolio by Internal Rating

As of December 31, 2014



	Public Finance U.S.				Public Finance Non-U.S.				Structured Finance U.S				Structured Finance Non-U.S				Total
Rating Category	Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%
	(dollars in millions)
AAA	$	4,082	1.3	%	$	615	2.0	%	$	20,037	48.7	%	$	5,409	59.6	%	$	30,143	7.5	%
AA	90,464		28.1		2,785		8.9		8,213		19.9		503		5.5		101,965		25.3
A	176,298		54.7		7,192		22.9		2,940		7.1		445		4.9		186,875		46.3
BBB	43,429		13.5		19,363		61.7		1,795		4.4		1,912		21.1		66,499		16.4
BIG	7,850		2.4		1,404		4.5		8,186		19.9		807		8.9		18,247		4.5
Total net par outstanding (1)	$	322,123	100.0	%	$	31,359	100.0	%	$	41,171	100.0	%	$	9,076	100.0	%	$	403,729	100.0	%

_____________________


(1)	Excludes $1.3 billion of loss mitigation securities insured and held by the Company as of December 31, 2014, which are primarily in the BIG category.

Financial Guaranty Portfolio by Internal Rating

As of December 31, 2013



	Public Finance U.S.				Public Finance Non-U.S.				Structured Finance U.S				Structured Finance Non-U.S				Total
Rating Category	Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%
	(dollars in millions)
AAA	$	4,998	1.4	%	$	1,016	3.0	%	$	32,317	54.9	%	$	9,684	69.1	%	$	48,015	10.5	%
AA	107,503		30.5		422		1.2		9,431		16.0		577		4.1		117,933		25.7
A	192,841		54.8		9,453		27.9		2,580		4.4		742		5.3		205,616		44.8
BBB	37,745		10.7		21,499		63.2		3,815		6.4		1,946		13.9		65,005		14.1
BIG	9,094		2.6		1,608		4.7		10,764		18.3		1,072		7.6		22,538		4.9
Total net par outstanding (1)	$	352,181	100.0	%	$	33,998	100.0	%	$	58,907	100.0	%	$	14,021	100.0	%	$	459,107	100.0	%

_____________________


(1)	Excludes $1.2 billion of loss mitigation securities insured and held by the Company as of December 31, 2013, which are primarily in the BIG category.

Financial Guaranty Portfolio

by Sector



	Gross Par Outstanding				Ceded Par Outstanding				Net Par Outstanding
Sector	As of December 31, 2014		As of December 31, 2013		As of December 31, 2014		As of December 31, 2013		As of December 31, 2014		As of December 31, 2013
	(dollars in millions)
Public finance:
U.S.:
General obligation	$	144,714	$	160,751	$	4,438	$	5,474	$	140,276	$	155,277
Tax backed	65,600		70,552		3,075		3,728		62,525		66,824
Municipal utilities	53,471		57,893		1,381		1,569		52,090		56,324
Transportation	28,914		32,514		1,091		1,684		27,823		30,830
Healthcare	16,225		17,663		1,377		1,531		14,848		16,132
Higher education	13,485		14,470		386		399		13,099		14,071
Infrastructure finance	5,098		5,014		917		900		4,181		4,114
Housing	2,880		3,518		101		132		2,779		3,386
Investor-owned utilities	944		992		0		1		944		991
Other public finance—U.S.	3,575		4,249		17		17		3,558		4,232
Total public finance—U.S.	334,906		367,616		12,783		15,435		322,123		352,181
Non-U.S.:
Infrastructure finance	15,091		17,373		2,283		2,670		12,808		14,703
Regulated utilities	14,582		15,502		3,668		4,297		10,914		11,205
Pooled infrastructure	2,565		2,754		145		234		2,420		2,520
Other public finance—non-U.S.	6,216		6,645		999		1,075		5,217		5,570
Total public finance—non-U.S.	38,454		42,274		7,095		8,276		31,359		33,998
Total public finance	373,360		409,890		19,878		23,711		353,482		386,179
Structured finance:
U.S.:
Pooled corporate obligations	21,791		32,955		1,145		1,630		20,646		31,325
RMBS	10,109		14,542		692		821		9,417		13,721
Insurance securitizations	3,480		3,082		47		47		3,433		3,035
Financial product	2,276		2,709		—		—		2,276		2,709
Consumer receivables	2,157		2,257		58		59		2,099		2,198
Commercial mortgage-backed securities ("CMBS") and other commercial real estate related exposures	1,979		3,990		22		38		1,957		3,952
Commercial receivables	567		918		7		7		560		911
Structured credit	71		71		2		2		69		69
Other structured finance—U.S.	858		2,067		144		1,080		714		987
Total structured finance—U.S.	43,288		62,591		2,117		3,684		41,171		58,907
Non-U.S.:
Pooled corporate obligations	7,439		12,232		835		1,174		6,604		11,058
Commercial receivables	965		1,286		21		23		944		1,263
RMBS	893		1,296		99		150		794		1,146
Structured credit	9		197		—		21		9		176
Other structured finance—non-U.S.	750		403		25		25		725		378
Total structured finance—non-U.S.	10,056		15,414		980		1,393		9,076		14,021
Total structured finance	53,344		78,005		3,097		5,077		50,247		72,928
Total net par outstanding	$	426,704	$	487,895	$	22,975	$	28,788	$	403,729	$	459,107

In addition to amounts shown in the tables above, the Company had outstanding commitments to provide guaranties of $276 million for structured finance and $248 million for public finance obligations at December 31, 2014. The structured finance commitments include the unfunded component of pooled corporate and other transactions. The expiration dates for the public finance commitments range between January 15, 2015 and February 17, 2017, with $124 million expiring prior to December 31, 2015. The commitments are contingent on the satisfaction of all conditions set forth in them and may expire unused or be canceled at the counterparty’s request. Therefore, the total commitment amount does not necessarily reflect actual future guaranteed amounts.

Actual maturities of insured obligations could differ from contractual maturities because borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties. The expected maturities of structured finance obligations are, in general, considerably shorter than the contractual maturities for such obligations.

Expected Amortization of

Net Par Outstanding

As of December 31, 2014



	Public Finance		Structured Finance		Total
	(in millions)
0 to 5 years	$	98,431	$	36,482	$	134,913
5 to 10 years	75,279		5,454		80,733
10 to 15 years	67,354		2,874		70,228
15 to 20 years	51,139		2,412		53,551
20 years and above	61,279		3,025		64,304
Total net par outstanding	$	353,482	$	50,247	$	403,729

Components of BIG Portfolio

Components of BIG Net Par Outstanding

(Insurance and Credit Derivative Form)

As of December 31, 2014



	BIG Net Par Outstanding								Net Par
	BIG 1		BIG 2		BIG 3		Total BIG		Outstanding
					(in millions)
First lien U.S. RMBS:
Prime first lien	$	68	$	33	$	252	$	353	$	471
Alt-A first lien	585		531		725		1,841		2,532
Option ARM	47		18		118		183		407
Subprime	156		654		765		1,575		4,051
Second lien U.S. RMBS:
Closed-end second lien	—		19		115		134		218
Home equity lines of credit (“HELOCs”)	1,012		36		509		1,557		1,738
Total U.S. RMBS	1,868		1,291		2,484		5,643		9,417
Trust preferred securities (“TruPS”)	997		—		336		1,333		4,326
Other structured finance	1,021		240		756		2,017		36,504
U.S. public finance	6,577		1,156		117		7,850		322,123
Non-U.S. public finance	1,402		2		—		1,404		31,359
Total	$	11,865	$	2,689	$	3,693	$	18,247	$	403,729

Components of BIG Net Par Outstanding

(Insurance and Credit Derivative Form)

As of December 31, 2013



	BIG Net Par Outstanding								Net Par
	BIG 1		BIG 2		BIG 3		Total BIG		Outstanding
					(in millions)
First lien U.S. RMBS:
Prime first lien	$	52	$	321	$	30	$	403	$	541
Alt-A first lien	656		1,137		935		2,728		3,590
Option ARM	71		60		467		598		937
Subprime	297		908		740		1,945		6,130
Second lien U.S. RMBS:
Closed-end second lien	8		20		118		146		244
HELOCs	1,499		20		378		1,897		2,279
Total U.S. RMBS	2,583		2,466		2,668		7,717		13,721
TruPS	1,587		135		—		1,722		4,970
Other structured finance	1,367		309		721		2,397		54,237
U.S. public finance	8,205		440		449		9,094		352,181
Non-U.S. public finance	1,009		599		—		1,608		33,998
Total	$	14,751	$	3,949	$	3,838	$	22,538	$	459,107

BIG Net Par Outstanding

and Number of Risks

As of December 31, 2014



	Net Par Outstanding						Number of Risks(2)
Description	Financial Guaranty Insurance(1)		Credit Derivative		Total		Financial Guaranty Insurance(1)	Credit Derivative	Total
	(dollars in millions)
BIG:
Category 1	$	10,195	$	1,670	$	11,865	164	18	182
Category 2	2,135		554		2,689		75	14	89
Category 3	2,892		801		3,693		119	24	143
Total BIG	$	15,222	$	3,025	$	18,247	358	56	414

BIG Net Par Outstanding

and Number of Risks

As of December 31, 2013



	Net Par Outstanding						Number of Risks(2)
Description	Financial Guaranty Insurance(1)		Credit Derivative		Total		Financial Guaranty Insurance(1)	Credit Derivative	Total
	(dollars in millions)
BIG:
Category 1	$	12,391	$	2,360	$	14,751	185	25	210
Category 2	2,323		1,626		3,949		80	21	101
Category 3	3,031		807		3,838		119	27	146
Total BIG	$	17,745	$	4,793	$	22,538	384	73	457

_____________________

(1) Includes net par outstanding for FG VIEs.


(2)	A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making Debt Service payments.

Geographic Distribution of Net Par Outstanding

The Company seeks to maintain a diversified portfolio of insured obligations designed to spread its risk across a number of geographic areas.

Geographic Distribution of

Net Par Outstanding

As of December 31, 2014



	Number of Risks	Net Par Outstanding		Percent of Total Net Par Outstanding
	(dollars in millions)
U.S.:
U.S. Public finance:
California	1,465	$	50,668	12.6	%
Pennsylvania	1,009	26,173		6.5
New York	995	26,044		6.5
Texas	1,239	25,449		6.3
Illinois	830	22,825		5.7
Florida	384	19,470		4.8
New Jersey	602	13,558		3.4
Michigan	668	12,739		3.2
Georgia	192	8,217		2.0
Ohio	507	7,818		1.9
Other states and U.S. territories	4,174	109,162		27.0
Total U.S. public finance	12,065	322,123		79.9
U.S. Structured finance (multiple states)	839	41,171		10.2
Total U.S.	12,904	363,294		90.1
Non-U.S.:
United Kingdom	114	19,856		4.9
Australia	26	4,121		1.0
Canada	10	3,526		0.9
France	20	2,820		0.7
Italy	9	1,501		0.4
Other	78	8,611		2.0
Total non-U.S.	257	40,435		9.9
Total	13,161	$	403,729	100.0	%

Exposure to the Selected European Countries

Several European countries continue to experience significant economic, fiscal and/or political strains such that the likelihood of default on obligations with a nexus to those countries may be higher than the Company anticipated when such factors did not exist. The European countries where the Company believes heightened uncertainties exist are: Hungary, Italy, Portugal and Spain (collectively, the “Selected European Countries”). The Company is closely monitoring its exposures in the Selected European Countries where it believes heightened uncertainties exist. Previously, the Company had included Ireland on this list but removed it during the third quarter of 2014 because of Ireland's strengthening economic performance and improving prospects; in 2014, Ireland's long-term foreign currency rating was upgraded one notch by S&P (to ‘A-’) and three notches by Moody’s (to ‘Baa1’). The Company’s direct economic exposure to the Selected European Countries (based on par for financial guaranty contracts and notional amount for financial guaranty contracts accounted for as derivatives) is shown in the following table, net of ceded reinsurance.

Net Direct Economic Exposure to Selected European Countries(1)

As of December 31, 2014



	Hungary		Italy		Portugal		Spain		Total
	(in millions)
Sovereign and sub-sovereign exposure:
Non-infrastructure public finance(2)	$	—	$	878	$	91	$	239	$	1,208
Infrastructure finance	313		13		11		135		472
Total sovereign and sub-sovereign exposure	313		891		102		374		1,680
Non-sovereign exposure:
Regulated utilities	—		220		—		—		220
RMBS	186		267		—		—		453
Total non-sovereign exposure	186		487		—		—		673
Total	$	499	$	1,378	$	102	$	374	$	2,353
Total BIG (See Note 6)	$	424	$	—	$	102	$	374	$	900

____________________

(1)

While the Company’s exposures are shown in U.S. dollars, the obligations the Company insures are in various currencies, primarily Euros. 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.


(2)	The exposure shown in the “Non-infrastructure public finance” category is from transactions backed by receivable payments from sub-sovereigns in Italy, Spain and Portugal. Sub-sovereign debt is debt issued by a governmental entity or government backed entity, or supported by such an entity, that is other than direct sovereign debt of the ultimate governing body of the country.

When the Company directly insures an obligation, it assigns the obligation to a geographic location or locations based on its view of the geographic location of the risk. The Company may also have direct exposures to the Selected European Countries in business assumed from unaffiliated monoline insurance companies, in which case the Company depends upon geographic information provided by the primary insurer.

The Company has excluded from the exposure tables above its indirect economic exposure to the Selected European Countries through policies it provides on pooled corporate and commercial receivables transactions. The Company calculates indirect exposure to a country by multiplying the par amount of a transaction insured by the Company times the percent of the relevant collateral pool reported as having a nexus to the country. On that basis, the Company has calculated exposure of $418 million of Selected European Countries (plus Greece) in transactions with $11.6 billion of net par outstanding. The indirect exposure to credits with a nexus to Greece is $12 million across several highly rated pooled corporate obligations with net par outstanding of $864 million.

Exposure to Puerto Rico

The Company insures general obligation bonds of the Commonwealth of Puerto Rico and various obligations of its related authorities and public corporations aggregating $4.9 billion net par as of December 31, 2014. The Company rates $4.7 billion net par of that amount BIG; included in that amount are the obligations of Puerto Rico Highway and Transportation Authority (“PRHTA”) (transportation), Puerto Rico Electric Power Authority (“PREPA”), and PRHTA (highway).

Puerto Rico has experienced significant general fund budget deficits in recent years. These deficits have been covered primarily with the net proceeds of bond issuances, interim financings provided by Government Development Bank for Puerto Rico (“GDB”) and, in some cases, one-time revenue measures or expense adjustment measures. In addition to high debt levels, Puerto Rico faces a challenging economic environment.

In June 2014, the Puerto Rico legislature passed the Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the "Recovery Act") in order to provide a legislative framework for certain public corporations experiencing severe financial stress to restructure their debt, including PRHTA and PREPA. Subsequently, the Commonwealth stated PREPA might need to seek relief under the Recovery Act due to liquidity constraints, and disclosed PREPA had utilized approximately $42 million on deposit in its reserve account in order to pay debt service due on its bonds on July 1, 2014.

In August 2014, PREPA entered into forbearance agreements with the GDB, its bank lenders, and bondholders and financial guaranty insurers (including AGM and AGC) that hold or guarantee more than 60% of PREPA's outstanding bonds, in order to address its near-term liquidity issues. Creditors, including AGM and AGC, agreed not to exercise available rights and remedies until March 31, 2015, and the bank lenders agreed to extend the maturity of two revolving lines of credit to the same date. PREPA agreed it would continue to make principal and interest payments on its outstanding bonds, and interest payments on its lines of credit. It also agreed it would develop a five year business plan and a recovery program in respect of its operations; a preliminary business plan was released in December 2014. Creditors, including AGM and AGC, have begun discussions among themselves and with PREPA regarding potentially extending the forbearance agreements beyond March 31, 2015, but there can be no assurance that such discussions will result in such an extension.

Investors in bonds issued by PREPA had filed suit in the United States District Court for the District of Puerto Rico asserting the Recovery Act violates the U.S. Constitution. On February 6, 2015, the U.S. District Court for the District of Puerto Rico ruled the Recovery Act is preempted by the U.S. Bankruptcy Code and is therefore void; on February 19, 2015, the Commonwealth appealed the ruling to the U.S. Court of Appeals for the First Circuit. In addition, the Commonwealth's Resident Commissioner has introduced a bill to the U.S. Congress that, if passed, would enable the Commonwealth to authorize one or more of its public corporations to restructure their debts under chapter 9 of the U.S Bankruptcy Code if they were to become insolvent. The passage of the Recovery Act, its subsequent invalidation, and the introduction of legislation that would enable the Commonwealth to authorize chapter 9 protection for its public corporations have resulted in uncertainty among investors about the rights of creditors of the Commonwealth and its related authorities and public corporations.

Following the enactment of the Recovery Act, S&P, Moody’s and Fitch Ratings lowered the credit rating of the Commonwealth’s bonds and the ratings on certain of its public corporations. In February 2015, S&P and Moody’s each again lowered the credit rating of the Commonwealth's bonds and the ratings on certain of its public corporations. The Commonwealth has disclosed its liquidity has been adversely affected by rating agency downgrades and by the limited market access for its debt, and also noted it has relied on short-term financings and interim loans from the GDB and other private lenders, which reliance has constrained its liquidity and increased its near-term refinancing risk.

In December 2014, Puerto Rico's legislature approved a bill designed to stabilize PRHTA and improve the liquidity of the GDB. Signed by the governor on January 15, 2015, the legislation provides for certain tax revenues that would support PRHTA and require the transfer of certain liabilities and revenues from PHRTA to another authority, as well as requiring the transfer of the operations of poorly performing transit facilities to a new authority.

Puerto Rico

Gross Par and Gross Debt Service Outstanding



	Gross Par Outstanding				Gross Debt Service Outstanding
	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
	(in millions)
Subject to the Now Voided Recovery Act (1)	$	3,058	$	3,279	$	5,326	$	5,748
Not subject to the Now Voided Recovery Act	2,977		3,517		4,748		5,599
Total	$	6,035	$	6,796	$	10,074	$	11,347

____________________


(1)	On February 6, 2015, the U.S. District Court for the District of Puerto Rico ruled that the Recovery Act is preempted by the Federal Bankruptcy Code and is therefore void. On February 19, 2015, the Commonwealth appealed the ruling to the U.S. Court of Appeals for the First Circuit.

The following table shows the Company’s exposure to general obligation bonds of Puerto Rico and various obligations of its related authorities and public corporations.

Puerto Rico

Net Par Outstanding



	As of December 31, 2014			As of December 31, 2013
	Total		Internal Rating	Total		Internal Rating
	(in millions)
Exposures subject to the Now Voided Recovery Act:
PRHTA (Transportation revenue)	$	844	BB-	$	872	BB-
PREPA	772		B-	860		BB-
Puerto Rico Aqueduct and Sewer Authority	384		BB-	384		BB-
PRHTA (Highway revenue)	273		BB	302		BB
Puerto Rico Convention Center District Authority	174		BB-	185		BB-
Puerto Rico Public Finance Corporation	—		—	44		B
Total	2,447			2,647

Exposures not subject to the Now Voided Recovery Act:
Commonwealth of Puerto Rico - General Obligation Bonds	1,672		BB	1,885		BB
Puerto Rico Municipal Finance Agency	399		BB-	450		BB-
Puerto Rico Sales Tax Financing Corporation	269		BBB	268		A-
Puerto Rico Public Buildings Authority	100		BB	139		BB
GDB	33		BB	33		BB
Puerto Rico Infrastructure Finance Authority	18		BB-	18		BB-
University of Puerto Rico	1		BB-	1		BB-
Total	2,492			2,794
Total net exposure to Puerto Rico	$	4,939		$	5,441

The following table shows the scheduled amortization of the general obligation bonds of Puerto Rico and various obligations of its related authorities and public corporations insured and rated BIG by the Company. The Company guarantees payments of interest and principal when those amounts are scheduled to be paid and cannot be required to pay on an accelerated basis. In the event that obligors default on their obligations, the Company would only be required to pay the shortfall between the principal and interest due in any given period and the amount paid by the obligors.

Amortization Schedule of Puerto Rico BIG Net Par Outstanding

and BIG Net Debt Service Outstanding

As of December 31, 2014



	Scheduled BIG Net Par Amortization						Scheduled BIG Net Debt Service Amortization
	Subject to the Now Voided Recovery Act		Not Subject to the Now Voided Recovery Act		Total		Subject to the Now Voided Recovery Act		Not Subject to the Now Voided Recovery Act		Total
	(in millions)
2015	$	126	$	205	$	331	$	249	$	319	$	568
2016	84		183		267		199		287		486
2017	41		166		207		153		262		415
2018	48		109		157		158		195		353
2019	61		126		187		168		207		375
2020	73		182		255		176		258		434
2021	51		58		109		151		124		275
2022	42		67		109		140		129		269
2023	102		40		142		198		99		297
2024	82		78		160		174		136		310
2025 - 2029	576		340		916		951		566		1,517
2030 - 2034	440		387		827		696		541		1,237
2035 - 2039	397		270		667		526		304		830
2040 - 2044	78		12		90		147		13		160
2045 - 2047	246		—		246		271		—		271
Total	$	2,447	$	2,223	$	4,670	$	4,357	$	3,440	$	7,797