8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) — August 3, 2016

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))

Item 2.02 Results of Operations and Financial Condition On August 3, 2016, Assured Guaranty Ltd. issued a press release reporting its second quarter 2016 results and the availability of its June 30, 2016 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 August 3, 2016 reporting second quarter 2016 results
99.2	June 30, 2016 Financial Supplement of Assured Guaranty Ltd.

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: August 3, 2016

EXHIBIT INDEX

Exhibit Number	Description
99.1	Assured Guaranty Ltd. Press Release dated August 3, 2016 reporting second quarter 2016 results
99.2	June 30, 2016 Financial Supplement of Assured Guaranty Ltd.

EX-99.1

Assured Guaranty Ltd. Reports Results for Second Quarter 2016

• Net income was $146 million, or $1.09 per share, for second quarter 2016, compared with $297 million, or $1.96 per share, for second quarter 2015.

• Operating income¹ was $139 million, or $1.03 per share, for second quarter 2016, compared with $278 million, or $1.83 per share, for second quarter 2015.

• Shareholders' equity per share was $47.06, operating shareholders' equity¹ per share was $45.26 and adjusted book value¹ per share was $61.86.

• Second quarter 2016 share repurchases totaled $60 million, or 2.3 million shares.

• Assured Guaranty Corp. acquired CIFG Holding Inc. on July 1, 2016.

Hamilton, Bermuda, August 3, 2016 -- Assured Guaranty Ltd. (NYSE: AGO) (AGL and, together with its consolidated entities, Assured Guaranty or the Company) announced today its financial results for the three-month period ended June 30, 2016 (second quarter 2016).

Summary Financial Results

(in millions, except per share amounts)

	Quarter Ended
	June 30,
	2016		2015
Net income	$	146	$	297
Operating income1	139		278
Net income per diluted share	$	1.09	$	1.96
Operating income1 per diluted share	1.03		1.83
Diluted shares2	134.8		151.6
Gross written premiums	$	36	$	22
PVP1	41		26
Gross par written	4,775		5,581

¹ Please see “Explanation of Non-GAAP Financial Measures” at the end of this press release.

² Diluted shares for generally accepted accounting principles (GAAP) net income and non-GAAP operating income were the same.

1

Summary Financial Results (continued)

(in millions, except per share amounts)

	As of
	June 30, 2016				December 31, 2015
	Amount		Per Share		Amount		Per Share
Shareholders' equity	$	6,250	$	47.06	$	6,063	$	43.96
Operating shareholders' equity1	6,011		45.26		5,946		43.11
Adjusted book value1	8,215		61.86		8,439		61.18
Common shares outstanding	132.8				137.9

________________________________________________

(1) Please see “Explanation of Non-GAAP Financial Measures” at the end of this press release.

“Assured Guaranty had a solid second quarter,” said Dominic Frederico, President and CEO. “We continued to build our financial strength, and furthered our strategic objectives on July 1 when we completed our acquisition of CIFG.

“S&P Global Ratings took note of our positive risk-adjusted pricing trend in its July 27th report affirming our AA financial strength ratings,” he added.  “In the report, S&P said that none of the severe stress scenarios it applied to our Puerto Rico exposure reduced our ‘very strong’ capital adequacy score.”

Second Quarter Results

GAAP Financial Information

Net income for second quarter 2016 was $146 million, compared with net income of $297 million for the three-month period ended June 30, 2015 (second quarter 2015). Net income was higher in second quarter 2015 compared with second quarter 2016 due primarily to the gains recognized upon the acquisition of Radian Asset Assurance Inc. (Radian Asset) in second quarter 2015. This was offset in part by lower loss and loss adjustment expenses (LAE) in second quarter 2016 compared with second quarter 2015.

Except for credit impairment, the fair value adjustments on credit derivatives in the insured portfolio are non-economic adjustments that reverse to zero over the remaining term of the portfolio. Fair value gains on credit derivatives were $63 million in second quarter 2016, and were generated primarily by terminations of several transactions. Fair value gains on credit derivatives in second quarter 2015 were $90 million, primarily driven by tighter implied net spreads as a result of the increased cost to buy protection in Assured Guaranty Corp. and Assured Guaranty Municipal Corp.

Loss and LAE incurred was $102 million in second quarter 2016, and $188 million in second quarter 2015. In both periods, the primary component of loss and LAE was an increase in loss reserves on Puerto Rico exposures.

2

Consolidated Statements of Operations (unaudited)

(in millions)

	Quarter Ended
	June 30,
	2016			2015
Revenues:
Net earned premiums	$	214		$	219
Net investment income	98			98
Net realized investment gains (losses)	10			(9		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	24			8
Net unrealized gains (losses)	39			82
Net change in fair value of credit derivatives	63			90
Fair value gains (losses) on committed capital securities (CCS)	(11		)	23
Fair value gains (losses) on financial guaranty variable interest entities (FG VIEs)	4			5
Bargain purchase gain and settlement of pre-existing relationship	—			214
Other income (loss)	18			55
Total revenues	396			695
Expenses:
Loss and LAE	102			188
Amortization of deferred acquisition costs	5			6
Interest expense	25			26
Other operating expenses	63			66
Total expenses	195			286
Income (loss) before income taxes	201			409
Provision (benefit) for income taxes	55			112
Net income (loss)	$	146		$	297

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Economic Loss Development

Economic loss development in second quarter 2016 was $22 million, comprising $109 million in loss development in the public finance sector and a benefit of $87 million in the structured finance sector. These amounts include an aggregate $45 million in loss development for all sectors, attributable to the decline in discount rates.

The economic loss development of $109 million in the public finance sector includes losses of $29 million related to the decline in discount rates. The remainder of the loss development was driven by increases in expected losses on various Puerto Rico exposures. The benefit for U.S. residential mortgage-backed securities (RMBS) of $81 million was due mainly to the acceleration of claim payments as a means of mitigating future losses on certain Alt-A transactions.

Roll Forward of Net Expected Loss to be Paid (1)

(in millions)

	Net Expected Loss to be Paid (Recovered) as of March 31, 2016			Economic Loss Development/ (Benefit)			Losses (Paid)/ Recovered			Net Expected Loss to be Paid (Recovered) as of June 30, 2016
Public finance	$	903		$	109		$	(12	)	$	1,000
U.S. RMBS:
Before representations and warranties (R&W) payable (recoverable)	340			(107		)	(99		)	134
R&W payable (recoverable) (2)	(47		)	26			79			58
U.S. RMBS	293			(81		)	(20		)	192
Other structured finance	141			(6		)	(1		)	134
Total	$	1,337		$	22		$	(33	)	$	1,326

________________________________________________

(1) Economic loss development represents the change in net expected loss to be paid attributable to 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 the Company 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.

(2) The Company’s agreements with R&W providers generally provide that, as the Company makes claim payments, the R&W providers reimburse it for those claims; if the Company later receives reimbursement through the transaction (for example, from excess spread), the Company repays the R&W providers. When the Company projects receiving more reimbursements in the future than it projects paying in claims on transactions covered by R&W settlement agreements, the Company will have a net R&W payable.

4

New Business Production

New Business Production

(in millions)

	Quarter Ended June 30,
	2016							2015
	Gross Written Premiums			PVP(1)		Gross Par Written		Gross Written Premiums			PVP(1)		Gross Par Written
Public finance - U.S.	$	33		$	33	$	4,366	$	23		$	25	$	5,581
Public finance - non - U.S.	7			7		406		(1		)	—		—
Structured finance - U.S.	(3		)	1		3		0			1		—
Structured finance - non-U.S.	(1		)	—		—		0			—		—
Total	$	36		$	41	$	4,775	$	22		$	26	$	5,581

________________________________________________

(1) Please see “Explanation of Non-GAAP Financial Measures” at the end of this press release.

Gross written premiums in second quarter 2016 were $36 million, compared to $22 million in second quarter 2015. Gross written premiums include amounts collected upfront on financial guaranty insurance new business written, as well as the present value of contractual or expected premiums discounted at risk free rates, and the effects of changes in the estimated lives of in-force financial guaranty insurance contracts consisting of homogeneous pools of assets. The increase in gross written premiums was primarily attributable to the increase in new business written in the public finance sector.

U.S. public finance PVP increased to $33 million in second quarter 2016 from $25 million in second quarter 2015, representing an increase of 32%. The average premium rate increased compared with second quarter 2015 while the average rating of par written remained in the A- category. During second quarter 2016, Assured Guaranty once again guaranteed the majority of insured par issued. Non-U.S. public finance PVP in second quarter 2016 represents secondary market financial guarantees written on utility bonds.

Other Non-GAAP Financial Measures

Operating income was $139 million in second quarter 2016, compared with operating income of $278 million in second quarter 2015. Operating income was higher in second quarter 2015 compared with second quarter 2016 due primarily to the gains recognized upon the acquisition of Radian Asset in second quarter 2015. This was offset in part by lower loss and LAE in second quarter 2016 compared with second quarter 2015.

Total operating net earned premiums and credit derivative revenues in second quarter 2016 were $248 million, compared with $259 million in second quarter 2015. The acceleration of operating net earned premiums and credit derivative revenues was $136 million in second quarter 2016, compared with $98 million in second quarter 2015. On an operating income basis, credit derivative contracts and FG VIEs are accounted for as financial guaranty insurance.

5

Common Share Repurchases

As of August 3, 2016, the Company's remaining share repurchase authorization was $150 million.

Summary of Share Repurchases

(in millions, except per share amounts)

	Amount		Number of Shares	Average Price Per Share
2013	$	264	12.5	$	21.12
2014	590		24.4	24.17
2015	555		21.0	26.43
2016 (January 1 - March 31)	75		3.0	24.69
2016 (April 1 - June 30, 2016)	60		2.3	25.73
2016 (July 1 - through August 3, 2016)	20		0.9	25.89
Total 2016	155		6.2	25.24
Cumulative repurchases since the beginning of 2013	$	1,564	64.1	$	24.42

As in the past, the Company's execution of its capital management strategy is contingent upon its available free cash and the capital position of the parent company, market conditions, the maintenance of its strong financial strength ratings and other factors. The repurchase program may be modified, extended or terminated by the board of directors at any time. It does not have an expiration date.

On a per-share basis, shareholders' equity, operating shareholders' equity and adjusted book value increased in second quarter 2016 in part due to the Company's repurchase of its common shares.

6

Consolidated Balance Sheets (unaudited)

(in millions)

	As of
	June 30, 2016		December 31, 2015
Assets
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	9,960	$	10,627
Short-term investments, at fair value	585		396
Other invested assets	170		169
Total investment portfolio	10,715		11,192
Cash	190		166
Premiums receivable, net of commissions payable	623		693
Ceded unearned premium reserve	228		232
Deferred acquisition costs	110		114
Reinsurance recoverable on unpaid losses	82		69
Salvage and subrogation recoverable	323		126
Credit derivative assets	36		81
Deferred tax asset, net	235		276
Current income tax receivable	—		40
Funds restricted for CIFG acquisition	451		—
FG VIE assets, at fair value	814		1,261
Other assets	285		294
Total assets	$	14,092	$	14,544
Liabilities and shareholders' equity
Liabilities
Unearned premium reserve	$	3,617	$	3,996
Loss and LAE reserve	1,268		1,067
Reinsurance balances payable, net	56		51
Long-term debt	1,303		1,300
Credit derivative liabilities	432		446
Current income tax payable	19		—
FG VIE liabilities with recourse, at fair value	790		1,225
FG VIE liabilities without recourse, at fair value	115		124
Other liabilities	242		272
Total liabilities	7,842		8,481
Shareholders' equity
Common stock	1		1
Additional paid-in capital	1,213		1,342
Retained earnings	4,648		4,478
Accumulated other comprehensive income	383		237
Deferred equity compensation	5		5
Total shareholders' equity	6,250		6,063
Total liabilities and shareholders' equity	$	14,092	$	14,544

7

Explanation of Non-GAAP Financial Measures

The Company references financial measures that are not in accordance with GAAP. Management and the Board of Directors use non-GAAP financial measures, as well as GAAP financial measures and other factors, to evaluate the Company’s results of operations, financial condition and progress towards long-term goals. By disclosing non-GAAP financial measures, the Company gives investors, analysts and financial news reporters access to some of the same information that management and the Board of Directors review internally. Assured Guaranty believes its 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.

Many investors, analysts and financial news reporters use operating shareholders’ equity as the principal financial measure for valuing AGL’s current share price or projected share price and also as the basis of their decision to recommend, buy or sell AGL’s common shares. Many of the Company’s fixed income investors also use operating shareholders’ equity to evaluate the Company’s capital adequacy. Many investors, analysts and financial news reporters also use adjusted book value to evaluate AGL’s share price and as the basis of their decision to recommend, buy or sell the AGL common shares. Operating income enables investors and analysts to evaluate the Company’s financial results as compared with the consensus analyst estimates distributed publicly by financial databases. Two non-GAAP financial measures, growth in adjusted book value per share and operating income, are key measures used to help determine compensation.

The following paragraphs and tables define each non-GAAP financial measure disclosed by the Company and describe why it is useful. A reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure is presented below.

Operating Income

Management believes that operating income is a useful measure because it presents the results of operations of the Company with all financial guaranty contracts accounted for on a consistent basis and excludes fair value adjustments that are not expected to result in economic gain or loss, which clarifies the understanding of the underwriting results and financial condition of the Company. Operating income is defined as net income (loss) attributable to AGL, as reported under GAAP, adjusted for the following:

1) Elimination of 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.

2) Elimination of 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, this adjustment presents all financial guaranty

8

contracts on a more consistent basis of accounting, whether or not they are subject to derivative accounting rules.

3) Elimination of 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 foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables and loss and LAE reserves represent the present value of future contractual or expected cash flows. 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. 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. This adjustment presents all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation.

6) Elimination of the tax effects related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

Summary Reconciliation of

GAAP Net Income to Non-GAAP Operating Income (1)

(in millions)

	Quarter Ended
	June 30,
	2016			2015
Net income (loss)	$	146		$	297
Less pre-tax adjustments:
Realized gains (losses) on investments	9			(12		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	32			10
Fair value gains (losses) on CCS	(11		)	22
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(17		)	13
Effect of consolidating FG VIEs	(3		)	4
Total pre-tax adjustments	10			37
Less tax effect on pre-tax adjustments	(3		)	(18		)
Operating income	$	139		$	278

________________________________________________

(1) The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

9

Detailed Reconciliation of GAAP Net Income

to Non-GAAP Operating Income (1)

(in millions, except per share amounts)

	Quarter Ended June 30, 2016									Quarter Ended June 30, 2015
	GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Components			GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Components
Revenues:
Net earned premiums	$	214		$	(3	)	$	217		$	219		$	(5	)	$	224
Net investment income	98			5			93			98			(1		)	99
Net realized investment gains (losses)	10			10			—			(9		)	(9		)	0
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	24			24			—			8			8			—
Net unrealized gains (losses)	39			44			(5		)	82			82			—
Credit derivative revenues	—			(31		)	31			—			(35		)	35
Net change in fair value of credit derivatives	63			37			26			90			55			35
Fair value gains (losses) on CCS	(11		)	(11		)	—			23			23			—
Fair value gains (losses) on FG VIEs	4			4			—			5			5			—
Bargain purchase gain and settlement of pre-existing relationships	—			—			—			214			(35		)	249
Other income (loss)	18			(18		)	36			55			13			42
Total revenues	396			24			372			695			46			649
Expenses:
Loss and LAE:
Financial guaranty insurance	102			3			99			188			(1		)	189
Credit derivatives	—			11			(11		)	—			9			(9		)
Amortization of deferred acquisition costs	5			0			5			6			0			6
Interest expense	25			—			25			26			—			26
Other operating expenses	63			0			63			66			1			65
Total expenses	195			14			181			286			9			277
Income (loss) before income taxes	201			10			191			409			37			372
Provision (benefit) for income taxes	55			3			52			112			18			94
Income (loss)	$	146		$	7		$	139		$	297		$	19		$	278
Diluted shares	134.8						134.8			151.6						151.6
Per share	$	1.09					$	1.03		$	1.96					$	1.83
Effective tax rate	26.9		%				27.4		%	27.5		%				25.4		%

________________________________________________

(1) The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

10

Operating Shareholders’ Equity and Adjusted Book Value

Management believes that operating shareholders’ equity is a useful measure because it presents the equity of the Company with all financial guaranty contracts accounted for on a consistent basis and excludes fair value adjustments that are not expected to result in economic gain or loss, which clarifies the understanding of the underwriting results and financial condition of the Company. 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:

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 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 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 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.

 5) Elimination of the tax asset or liability related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

Management uses adjusted book value to measure the intrinsic value of the Company, excluding franchise value. Growth in adjusted book value per share is one of the key financial measures used in determining the amount of certain long term compensation to management and employees and used by rating agencies and investors. 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 net of expected losses. Adjusted book value is operating shareholders’ equity, as defined above, further adjusted for the following:

1) Elimination of 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 net present value of estimated net future credit derivative revenue. See below.

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3) Addition of the deferred premium revenue 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.

4) Elimination of the tax asset or liability related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

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.

Reconciliation of GAAP Shareholders' Equity to

Operating Shareholders' Equity (1) and Adjusted Book Value (1)

(in millions, except per share amounts)

	As of
	June 30, 2016			December 31, 2015
Shareholders' equity	$	6,250		$	6,063
Less pre-tax adjustments:
Effect of consolidating FG VIEs	(18		)	(35		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(265		)	(241		)
Fair value gains (losses) on CCS	35			62
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	598			376
Taxes	(111		)	(45		)
Operating shareholders' equity	6,011			5,946
Pre-tax adjustments:
Less: Deferred acquisition costs	110			114
Plus: Net present value of estimated net future credit derivative revenue	93			169
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,073			3,417
Taxes	(852		)	(979		)
Adjusted book value	$	8,215		$	8,439
Shares outstanding at the end of the period	132.8			137.9
Per share:
Shareholders' equity	$	47.06		$	43.96
Operating shareholders' equity	45.26			43.11
Adjusted book value	61.86			61.18

________________________________________________

(1) The non-GAAP financial measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

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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 written premiums 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 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. 

13

Reconciliation of PVP

to Gross Written Premiums (1)

(in millions)

	Quarter Ended
	June 30, 2016
	Public Finance				Structured Finance
	U.S.		Non - U.S.		U.S.			Non - U.S.			Total
Total PVP	$	33	$	7	$	1		$	—		$	41
Less: PVP of non-financial guaranty insurance	—		—		1			—			1
Less: Financial guaranty installment premium PVP	—		7		—			—			7
Plus: Installment gross written premiumsand other GAAP adjustments(2)	0		7		(3		)	(1		)	3
Total gross written premiums	$	33	$	7	$	(3	)	$	(1	)	$	36

	Quarter Ended
	June 30, 2015
	Public Finance						Structured Finance
	U.S.			Non - U.S.			U.S.		Non - U.S.		Total
Total PVP	$	25		$	—		$	1	$	—	$	26
Less: PVP of non-financial guaranty insurance	—			—			0		—		0
Less: Financial guaranty installment premium PVP	—			—			1		—		1
Plus: Installment gross written premiumsand other GAAP adjustments(2)	(2		)	(1		)	0		0		(3		)
Total gross written premiums	$	23		$	(1	)	$	0	$	0	$	22

________________________________________________

(1) The non-GAAP financial measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

(2) Includes present value of new business on installment policies discounted at the prescribed GAAP discount rates, gross written premium adjustments on existing installment policies due to changes in assumptions, any cancellations of assumed reinsurance contracts, and other GAAP adjustments.

14

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, August 4, 2016. 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 1-877-281-1545 (in the U.S.) or 1-412-902-6609 (International). A replay of the call will be made available through November 4, 2016. To listen to the replay, dial 1-877-344-7529 (in the U.S.) or 1-412-317-0088 (International), passcode 10089860. The replay will be available one hour after the conference call ends.

Please refer to Assured Guaranty's June 30, 2016 Financial Supplement, which is posted on the Company's website at assuredguaranty.com/investor-information/by-company/assured-guaranty-ltd, 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 2Q 2016,” which lists the U.S. public finance new issues insured by the Company in second quarter 2016, and

• “Structured Finance Transactions at June 30, 2016,” which lists the Company's structured finance exposure as of that date.

In addition, the Company is posting at assuredguaranty.com/presentations the “June 30, 2016 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 will be furnished to the Securities and Exchange Commission 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.

15

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 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 AGL or any of its subsidiaries, and/or of any securities AGL or any of its subsidiaries have issued, and/or of transactions that AGL’s subsidiaries have insured; reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance; developments in the world’s financial and capital markets that adversely affect obligors’ payment rates, Assured Guaranty’s loss experience, or its exposure to refinancing risk in transactions (which could result in substantial liquidity claims on its guarantees); the possibility that budget or pension shortfalls or other factors will result in credit losses or impairments on obligations of state, territorial and local governments and their related authorities and public corporations that Assured Guaranty insures or reinsures; the failure of Assured Guaranty to realize loss recoveries that are assumed in its expected loss estimates; 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; increased competition, including from new entrants into the financial guaranty industry; rating agency action on obligors, including sovereign debtors, resulting in a reduction in the value of securities in Assured Guaranty's investment portfolio and in collateral posted by and to Assured Guaranty; the inability of Assured Guaranty to access external sources of capital on acceptable terms; changes in the world’s credit markets, segments thereof, interest rates or general economic conditions; the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; changes in applicable accounting policies or practices; changes in applicable laws or regulations, including insurance, bankruptcy and tax laws, or other governmental actions; the impact of changes in the world’s economy and credit and currency markets and in applicable laws or regulations relating to the decision of the United Kingdom to exit the European Union;difficulties with the execution of Assured Guaranty’s business strategy; loss of key personnel; 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 AGL’s filings with the U.S. 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 August 3, 2016, and Assured Guaranty undertakes no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

16

Contact Information

Robert Tucker

Senior 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

17

EX-99.2

Assured Guaranty Ltd.

June 30, 2016

Financial Supplement

Table of Contents		Page
	Selected Financial Highlights	1
	Consolidated Balance Sheets (unaudited)	2
	Consolidated Statements of Operations (unaudited)	3
	Net Income (Loss) Reconciliation to Operating Income	4
	Selected Financial Highlights Non-GAAP Reconciliations	6
	Operating Shareholders' Equity and Adjusted Book Value	7
	Claims-Paying Resources	8
	New Business Production	9
	Gross Par Written	10
	New Business Production by Quarter	11
	Available-for-Sale Investment Portfolio and Cash	12
	Estimated Net Exposure Amortization and Estimated Future Net Premium and Credit Derivative Revenues	13
	Expected Amortization of Net Par Outstanding	14
	Present Value of Net Expected Loss to be Expensed	15
	Financial Guaranty Profile	16
	Exposure to Puerto Rico	20
	Direct Pooled Corporate Obligations Profile	23
	Consolidated U.S. RMBS Profile	24
	Below Investment Grade Exposures	25
	Largest Exposures by Sector	30
	Rollforward of Net Expected Loss and Loss Adjustment Expenses to be Paid After Benefit for R&W	34
	Loss Measures	35
	Summary of Financial and Statistical Data	36
	Summary of Non-GAAP Financial Measures	37
	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, 2015 and its Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2016 and June 30, 2016.

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 AGL or any of its subsidiaries, and/or of any securities AGL or any of its subsidiaries have issued, and/or of transactions that AGL’s subsidiaries have insured; (2) reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance; (3) developments in the world’s financial and capital markets that adversely affect obligors’ payment rates, Assured Guaranty’s loss experience, or its exposure to refinancing risk in transactions (which could result in substantial liquidity claims on its guarantees); (4) the possibility that budget or pension shortfalls or other factors will result in credit losses or impairments on obligations of state, territorial and local governments and their related authorities and public corporations that Assured Guaranty insures or reinsures; (5) the failure of Assured Guaranty to realize loss recoveries that are assumed in its expected loss estimates; (6) 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; (7) increased competition, including from new entrants into the financial guaranty industry; (8) rating agency action on obligors, including sovereign debtors, resulting in a reduction in the value of securities in Assured Guaranty’s investment portfolio and in collateral posted by and to Assured Guaranty; (9) the inability of Assured Guaranty to access external sources of capital on acceptable terms; (10) changes in the world’s credit markets, segments thereof, interest rates or general economic conditions; (11) the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; (12) changes in applicable accounting policies or practices; (13) changes in applicable laws or regulations, including insurance, bankruptcy and tax laws, or other governmental actions; (14) the impact of changes in the world’s economy and credit and currency markets and in applicable laws or regulations relating to the decision of the United Kingdom to exit the European Union;(15) difficulties with the execution of Assured Guaranty’s business strategy; (16) loss of key personnel; (17) the effects of mergers, acquisitions and divestitures; (18) natural or man-made catastrophes; (19) other risks and uncertainties that have not been identified at this time; (20) management’s response to these factors; and (21) other risk factors identified in AGL’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 update publicly or review any forward looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Assured Guaranty Ltd.

Selected Financial Highlights

(dollars in millions, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Net income (loss)	$	146		$	297		$	205		$	498
Operating income (3)	139			278			252			418
Net income (loss) per diluted share	$	1.09		$	1.96		$	1.51		$	3.23
Operating income per diluted share (3)	1.03			1.83			1.86			2.71
Weighted average shares outstanding
Basic shares outstanding	134.0			150.6			135.1			153.2
Diluted shares outstanding (1)	134.8			151.6			135.9			154.1
Effect of refundings and terminations, net on:
Net earned premiums	$	117		$	96		$	206		$	137
Net change in fair value of credit derivatives	67			2			78			13
Net income effect	151			67			238			102
Net income per diluted share	1.12			0.44			1.75			0.66
Operating net earned premiums	116			96			205			137
Credit derivative revenues	20			2			20			13
Operating income effect	118			68			198			103
Operating income per diluted share	0.87			0.44			1.45			0.67
Effective tax rate on net income	26.9		%	27.5		%	22.8		%	26.2		%
Effective tax rate on operating income (5)	27.4		%	25.4		%	24.4		%	24.3		%
Return on equity (ROE) calculations (2)(6):
GAAP ROE	9.5		%	20.5		%	6.7		%	17.2		%
ROE, excluding unrealized gain (loss) on investment portfolio	10.1		%	21.7		%	7.1		%	18.2		%
Operating ROE	9.3		%	18.7		%	8.4		%	14.0		%
New business:
Gross written premiums (GWP)	$	36		$	22		$	55		$	54
Present value of new business production (PVP) (3)	41			26			79			62
Gross par written	4,775			5,581			7,524			8,289
							As of
							June 30,			December 31,
							2016			2015
Shareholders' equity							$	6,250		$	6,063
Operating shareholders' equity							6,011			5,946
Adjusted book value							8,215			8,439
Shares outstanding at the end of period							132.8			137.9
Shareholders' equity per share							$	47.06		$	43.96
Operating shareholders' equity per share							45.26			43.11
Adjusted book value per share							61.86			61.18
Net debt service outstanding							$	488,362		$	536,341
Net par outstanding							329,864			358,571
Claims-paying resources (4)							11,938			12,306

1) Non-GAAP diluted shares outstanding were the same as GAAP diluted shares since both net income and operating income were positive for all periods.

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 8 for additional detail on claims-paying resources.

5) Represents the ratio of non-GAAP operating provision for income taxes to operating income before income taxes. See pages 4 and 5.

6) See page 6 for additional information on calculation.

1

Assured Guaranty Ltd.

Consolidated Balance Sheets (unaudited)

(dollars in millions)

	As of:
	June 30,		December 31,
	2016		2015
Assets:
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	9,960	$	10,627
Short-term investments, at fair value	585		396
Other invested assets	170		169
Total investment portfolio	10,715		11,192
Cash	190		166
Premiums receivable, net of commissions payable	623		693
Ceded unearned premium reserve	228		232
Deferred acquisition costs	110		114
Reinsurance recoverable on unpaid losses	82		69
Salvage and subrogation recoverable	323		126
Credit derivative assets	36		81
Deferred tax asset, net	235		276
Current income tax receivable	—		40
Financial guaranty variable interest entities (FG VIE) assets, at fair value	814		1,261
Funds restricted for CIFG acquisition	451		—
Other assets	285		294
Total assets	$	14,092	$	14,544
Liabilities and shareholders' equity:
Liabilities:
Unearned premium reserve	$	3,617	$	3,996
Loss and loss adjustment expense reserve	1,268		1,067
Reinsurance balances payable, net	56		51
Long-term debt	1,303		1,300
Credit derivative liabilities	432		446
Current income tax payable	19		—
FG VIE liabilities with recourse, at fair value	790		1,225
FG VIE liabilities without recourse, at fair value	115		124
Other liabilities	242		272
Total liabilities	7,842		8,481
Shareholders' equity:
Common stock	1		1
Additional paid-in capital	1,213		1,342
Retained earnings	4,648		4,478
Accumulated other comprehensive income	383		237
Deferred equity compensation	5		5
Total shareholders' equity	6,250		6,063
Total liabilities and shareholders' equity	$	14,092	$	14,544

2

Assured Guaranty Ltd.

Consolidated Statements of Operations (unaudited)

(dollars in millions, except per share amounts)

				Three Months Ended						Six Months Ended
				June 30,						June 30,
				2016			2015			2016			2015
Revenues:
	Net earned premiums			$	214		$	219		$	397		$	361
	Net investment income			98			98			197			199
	Net realized investment gains (losses)			10			(9		)	(3		)	7
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		24			8			32			29
		Net unrealized gains (losses)		39			82			(29		)	185
			Net change in fair value of credit derivatives	63			90			3			214
	Fair value gains (losses) on committed capital securities (CCS)			(11		)	23			(27		)	25
	Fair value gains (losses) on FG VIEs			4			5			22			(2		)
	Bargain purchase gain and settlement of pre-existing relationships			—			214			—			214
	Other income (loss)			18			55			52			46
		Total revenues		396			695			641			1,064
Expenses:
	Loss and loss adjustment expenses (LAE)			102			188			192			206
	Amortization of deferred acquisition costs			5			6			9			10
	Interest expense			25			26			51			51
	Other operating expenses			63			66			123			122
		Total expenses		195			286			375			389
Income (loss) before income taxes				201			409			266			675
	Provision (benefit) for income taxes			55			112			61			177
Net income (loss)				$	146		$	297		$	205		$	498
Earnings per share:
	Basic			$	1.09		$	1.97		$	1.52		$	3.25
	Diluted			$	1.09		$	1.96		$	1.51		$	3.23

3

Assured Guaranty Ltd.

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

(dollars in millions)

	Three Months Ended										Three Months Ended
	June 30, 2016										June 30, 2015
	GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components			GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components
Revenues:
Net earned premiums	$	214		$	(3	)	(1)	$	217		$	219		$	(5	)	(1)	$	224
Net investment income	98			5			(1)	93			98			(1		)	(1)	99
Net realized investment gains (losses)	10			10			(2)	—			(9		)	(9		)	(2)	0
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	24			24				—			8			8				—
Net unrealized gains (losses)	39			44				(5		)	82			82				—
Credit derivative revenues	—			(31		)		31			—			(35		)		35
Net change in fair value of credit derivatives	63			37			(2)	26			90			55			(2)	35
Fair value gains (losses) on CCS	(11		)	(11		)	(3)	—			23			23			(3)	—
Fair value gains (losses) on FG VIEs	4			4			(1)	—			5			5			(1)	—
Bargain purchase gain and settlement of pre-existing relationships	—			—				—			214			(35		)	(1)(2)	249
Other income (loss)	18			(18		)	(1)(4)	36			55			13			(1)(4)	42
Total revenues	396			24				372			695			46				649
Expenses:
Loss and LAE:
Financial guaranty insurance	102			3			(1)	99			188			(1		)	(1)	189
Credit derivatives	—			11			(2)	(11		)	—			9			(2)	(9		)
Amortization of deferred acquisition costs	5			0				5			6			0				6
Interest expense	25			—				25			26			—				26
Other operating expenses	63			0				63			66			1				65
Total expenses	195			14				181			286			9				277
Income (loss) before income taxes	201			10				191			409			37				372
Provision (benefit) for income taxes	55			3			(5)	52			112			18			(5)	94
Net income (loss)	$	146		$	7			$	139		$	297		$	19			$	278
Effective tax rate	26.9		%					27.4		%	27.5		%					25.4		%

1) Include adjustments related to elimination of the effects of consolidating FG VIEs.

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

3) Adjustments to eliminate fair value gain (loss) on CCS.

4) Include adjustments related to elimination of foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves.

5) Tax effect of the above adjustments.

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

4

Assured Guaranty Ltd.

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

(dollars in millions)

	Six Months Ended										Six Months Ended
	June 30, 2016										June 30, 2015
	GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components			GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components
Revenues:
Net earned premiums	$	397		$	(8	)	(1)	$	405		$	361		$	(10	)	(1)	$	371
Net investment income	197			1			(1)	196			199			(2		)	(1)	201
Net realized investment gains (losses)	(3		)	(3		)	(2)	—			7			7			(2)	0
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	32			32				—			29			29				—
Net unrealized gains (losses)	(29		)	(9		)		(20		)	185			185				—
Credit derivative revenues	—			(41		)		41			—			(59		)		59
Net change in fair value of credit derivatives	3			(18		)	(2)	21			214			155			(2)	59
Fair value gains (losses) on CCS	(27		)	(27		)	(3)	—			25			25			(3)	—
Fair value gains (losses) on FG VIEs	22			22			(1)	—			(2		)	(2		)	(1)	—
Bargain purchase gain and settlement of pre-existing relationships	—			—				—			214			(35		)	(1)(2)	249
Other income (loss)	52			(20		)	(1)(4)	72			46			—			(1)(4)	46
Total revenues	641			(53		)		694			1,064			138				926
Expenses:
Loss and LAE:
Financial guaranty insurance	192			(4		)	(1)	196			206			(7		)	(1)	213
Credit derivatives	—			17			(2)	(17		)	—			21			(2)	(21		)
Amortization of deferred acquisition costs	9			0				9			10			0				10
Interest expense	51			—				51			51			—				51
Other operating expenses	123			1				122			122			1				121
Total expenses	375			14				361			389			15				374
Income (loss) before income taxes	266			(67		)		333			675			123				552
Provision (benefit) for income taxes	61			(20		)	(5)	81			177			43			(5)	134
Net income (loss)	$	205		$	(47	)		$	252		$	498		$	80			$	418
Effective tax rate	22.8		%					24.4		%	26.2		%					24.3		%

1) Include adjustments related to elimination of the effects of consolidating FG VIEs.

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

3) Adjustments to eliminate fair value gain (loss) on CCS.

4) Include adjustments related to elimination of foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves.

5) Tax effect of the above adjustments.

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

5

Assured Guaranty Ltd.

Selected Financial Highlights Non-GAAP Reconciliations

(dollars in millions, except per share amounts)

Operating Income Reconciliation	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Net income (loss)	$	146		$	297		$	205		$	498
Less pre-tax adjustments:
Realized gains (losses) on investments	9			(12		)	(5		)	4
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	32			10			(28		)	101
Fair value gains (losses) on CCS	(11		)	22			(27		)	24
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(17		)	13			(19		)	0
Effect of consolidating FG VIEs	(3		)	4			12			(6		)
Total pre-tax adjustments	10			37			(67		)	123
Less tax effect on pre-tax adjustments	(3		)	(18		)	20			(43		)
Operating income	$	139		$	278		$	252		$	418
Per diluted share:
Net income (loss)	$	1.09		$	1.96		$	1.51		$	3.23
Less pre-tax adjustments:
Realized gains (losses) on investments	0.06			(0.08		)	(0.04		)	0.02
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0.23			0.07			(0.21		)	0.66
Fair value gains (losses) on CCS	(0.08		)	0.15			(0.20		)	0.16
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(0.12		)	0.08			(0.14		)	0.00
Effect of consolidating FG VIEs	(0.03		)	0.02			0.09			(0.04		)
Total pre-tax adjustments	0.06			0.24			(0.50		)	0.80
Less tax effect on pre-tax adjustments	0.00			(0.11		)	0.15			(0.28		)
Operating income	$	1.03		$	1.83		$	1.86		$	2.71

ROE Reconciliation and Calculation	As of
	June 30,		March 31,		December 31,			June 30,			March 31,			December 31,
	2016		2016		2015			2015			2015			2014
Shareholders' equity	$	6,250	$	6,113	$	6,063		$	5,806		$	5,786		$	5,758
Unrealized gain (loss) on investment portfolio, pre-tax	598		485		376			347			558			534
Less: tax effect	171		141		116			104			163			161
Unrealized gain (loss) on investment portfolio, after-tax	427		344		260			243			395			373
Shareholders' equity, excluding unrealized gain (loss) on investment portfolio	5,823		5,769		5,803			5,563			5,391			5,385
Operating shareholders' equity	6,011		5,954		5,946			6,011			5,876			5,933
					Three Months Ended						Six Months Ended
					June 30,						June 30,
					2016			2015			2016			2015
Net income (loss)					$	146		$	297		$	205		$	498
Operating income					139			278			252			418
Average shareholders' equity					$	6,182		$	5,796		$	6,157		$	5,782
Average shareholders' equity, excluding unrealized gain (loss) on investment portfolio					5,796			5,477			5,813			5,474
Average operating shareholders' equity					5,983			5,944			5,979			5,972
GAAP ROE (1)					9.5		%	20.5		%	6.7		%	17.2		%
ROE, excluding unrealized gain (loss) on investment portfolio(1)					10.1		%	21.7		%	7.1		%	18.2		%
Operating ROE(1)					9.3		%	18.7		%	8.4		%	14.0		%

1) Quarterly ROE calculations represent annualized returns.

6

Assured Guaranty Ltd.

Operating Shareholders' Equity and Adjusted Book Value

(dollars in millions, except per share amounts)

	As of:
	June 30,						December 31, 2015
	Total			Per Share			Total			Per Share
Reconciliation of shareholders' equity to adjusted book value:
Shareholders' equity	$	6,250		$	47.06		$	6,063		$	43.96
Less pre-tax adjustments:
Effect of consolidating FG VIEs	(18		)	(0.13		)	(35		)	(0.25		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(265		)	(2.00		)	(241		)	(1.75		)
Fair value gains (losses) on CCS	35			0.26			62			0.45
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	598			4.50			376			2.73
Taxes	(111		)	(0.83		)	(45		)	(0.33		)
Operating shareholders' equity	6,011			45.26			5,946			43.11
Pre-tax adjustments:
Less: Deferred acquisition costs	110			0.83			114			0.83
Plus: Net present value of estimated net future credit derivative revenue	93			0.70			169			1.23
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,073			23.14			3,417			24.77
Taxes	(852		)	(6.41		)	(979		)	(7.10		)
Adjusted book value	$	8,215		$	61.86		$	8,439		$	61.18

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

7

Assured Guaranty Ltd.

Claims-Paying Resources

(dollars in millions)

	As of June 30, 2016
	Assured Guaranty Municipal Corp.		Assured Guaranty Corp.		Municipal Assurance Corp.		Assured Guaranty Re Ltd. (8)		Eliminations(3)			Consolidated
Claims-paying resources
Policyholders' surplus	$	2,441	$	1,435	$	379	$	1,075	$	(623	)	$	4,707
Contingency reserve(1)	1,400		913		298		—		(298		)	2,313
Qualified statutory capital	3,841		2,348		677		1,075		(921		)	7,020
Unearned premium reserve(1)	1,459		573		400		746		(400		)	2,778
Loss and LAE reserves (1)	333		177		—		342		—			852
Total policyholders' surplus and reserves	5,633		3,098		1,077		2,163		(1,321		)	10,650
Present value of installment premium(1)	239		156		2		133		(2		)	528
CCS	200		200		—		—		—			400
Excess of loss reinsurance facility (2)	360		360		360		—		(720		)	360
Total claims-paying resources (including proportionate MAC ownership for AGM and AGC)	6,432		3,814		1,439		2,296		(2,043		)	11,938
Adjustment for MAC (4)	655		424		—		—		(1,079		)	—
Total claims-paying resources (excluding proportionate MAC ownership for AGM and AGC)	$	5,777	$	3,390	$	1,439	$	2,296	$	(964	)	$	11,938
Statutory net par outstanding (5)	$	123,873	$	38,178	$	52,001	$	81,407	$	(953	)	$	294,506
Equity method adjustment (4)	31,564		20,437		—		—		(52,001		)	—
Adjusted statutory net par outstanding (1)	$	155,437	$	58,615	$	52,001	$	81,407	$	(52,954	)	$	294,506
Net debt service outstanding (5)	$	191,278	$	56,528	$	76,721	$	127,909	$	(2,391	)	$	450,045
Equity method adjustment (4)	46,570		30,151		—		—		(76,721		)	—
Adjusted net debt service outstanding (1)	$	237,848	$	86,679	$	76,721	$	127,909	$	(79,112	)	$	450,045
Ratios:
Adjusted net par outstanding to qualified statutory capital	40:1		25:1		77:1		76:1					42:1
Capital ratio (6)	62:1		37:1		113:1		119:1					64:1
Financial resources ratio (7)	37:1		23:1		53:1		56:1					38:1

1) The numbers shown for Assured Guaranty Municipal Corp. (AGM) and Assured Guaranty Corp. (AGC) have been adjusted to include (i) their 100% share of their respective United Kingdom insurance subsidiaries and (ii) their indirect share of Municipal Assurance Corp. (MAC). AGM and AGC own 60.7% and 39.3%, respectively, of the outstanding stock of Municipal Assurance Holdings Inc., which owns 100% of the outstanding common stock of MAC. Amounts include financial guaranty insurance and credit derivatives.

2) Represents an aggregate $360 million excess-of-loss reinsurance facility for the benefit of AGC, AGM and MAC, which became effective January 1, 2016. The facility terminates on January 1, 2018, unless AGC, AGM and MAC choose to extend it.

3) Eliminations are primarily for (i) intercompany surplus notes between AGM and AGC, and (ii) MAC amounts, whose proportionate share are included in AGM and AGC based on ownership percentages. 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, and net par related to intercompany cessions from AGM and AGC to MAC.

4) Represents adjustments for AGM's and AGC's interest and indirect ownership of MAC.

5) Net par outstanding and net debt service outstanding are presented on a statutory basis.

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

7) The financial resources ratio is calculated by dividing adjusted net debt service outstanding by total claims-paying resources (including MAC adjustment for AGM and AGC).

8) 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, except for contingency reserves.

Please refer to the Glossary for an explanation of changes in the presentation of net debt service and net par outstanding.

8

Assured Guaranty Ltd.

New Business Production

(dollars in millions)

Reconciliation of PVP to GWP for the Three Months Ended June 30, 2016 and June 30, 2015

	Three Months Ended												Three Months Ended
	June 30, 2016												June 30, 2015
	Public Finance				Structured Finance								Public Finance						Structured Finance
	U.S.		Non - U.S.		U.S.			Non - U.S.			Total		U.S.			Non - U.S.			U.S.		Non - U.S.		Total
PVP	$	33	$	7	$	1		$	—		$	41	$	25		$	—		$	1	$	—	$	26
Less: PVP of non-financial guaranty insurance	—		—		1			—			1		—			—			0		—		0
Less: Financial guaranty installment premium PVP	—		7		—			—			7		—			—			1		—		1
Plus: Installment GWP and other GAAP adjustments(1)	0		7		(3		)	(1		)	3		(2		)	(1		)	0		0		(3		)
Total GWP	$	33	$	7	$	(3	)	$	(1	)	$	36	$	23		$	(1	)	$	0	$	0	$	22
Gross par written	$	4,366	$	406	$	3		$	—		$	4,775	$	5,581		$	—		$	—	$	—	$	5,581

Reconciliation of PVP to GWP for the Six Months Ended June 30, 2016 and June 30, 2015

	Six Months Ended														Six Months Ended
	June 30, 2016														June 30, 2015
	Public Finance					Structured Finance									Public Finance						Structured Finance
	U.S.			Non - U.S.		U.S.			Non - U.S.			Total			U.S.			Non - U.S.			U.S.		Non - U.S.		Total
PVP	$	64		$	14	$	1		$	—		$	79		$	38		$	—		$	19	$	5	$	62
Less: PVP of non-financial guaranty insurance	—			—		1			—			1			—			—			1		5		6
Less: Financial guaranty installment premium PVP	—			14		—			—			14			—			—			18		—		18
Plus: Installment GWP and other GAAP adjustments(1)	(16		)	15		(6		)	(2		)	(9		)	(2		)	(1		)	19		0		16
Total GWP	$	48		$	15	$	(6	)	$	(2	)	$	55		$	36		$	(1	)	$	19	$	0	$	54
Gross par written	$	7,115		$	406	$	3		$	—		$	7,524		$	8,022		$	—		$	261	$	6	$	8,289

1) Includes present value of new business on installment policies discounted at the prescribed GAAP discount rates, gross written premium adjustments on existing installment policies due to changes in assumptions, any cancellations of assumed reinsurance contracts, and other GAAP adjustments.

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

9

Assured Guaranty Ltd.

Gross Par Written

(dollars in millions)

Gross Par Written by Asset Type

	Three Months Ended			Six Months Ended
	June 30, 2016			June 30, 2016
	Gross Par Written		Avg. Internal Rating	Gross Par Written		Avg. Internal Rating
Sector:
U.S. public finance
General obligation	$	2,194	A-	$	3,492	A-
Tax backed	613		A	1,316		A-
Transportation	757		BBB	919		BBB
Municipal utilities	536		A-	831		A-
Higher education	244		A	316		A
Housing	21		BBB	155		BBB
Infrastructure finance	—		—	9		A
Other public finance	1		A-	77		AA-
Total U.S. public finance	4,366		A-	7,115		A-
Non-U.S. public finance:
Regulated utilities	406		BBB+	406		BBB+
Total non-U.S. public finance	406		BBB+	406		BBB+
Total public finance	$	4,772	A-	$	7,521	A-
U.S. structured finance:
Other structured finance	$	3	A-	$	3	A-
Total U.S. structured finance	3		A-	3		A-
Non-U.S. structured finance:
Total non-U.S. structured finance	—		—	—		—
Total structured finance	$	3	A-	$	3	A-
Total gross par written	$	4,775	A-	$	7,524	A-

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

10

Assured Guaranty Ltd.

New Business Production by Quarter

(dollars in millions)

																Six Months
	1Q-15		2Q-15			3Q-15			4Q-15		1Q-16			2Q-16		2015		2016
PVP:
Public finance - U.S.	$	13	$	25		$	41		$	45	$	31		$	33	$	38	$	64
Public finance - non-U.S.	—		—			—			27		7			7		—		14
Structured finance - U.S.	18		1			0			3		—			1		19		1
Structured finance - non-U.S.	5		—			—			1		—			—		5		—
Total PVP	$	36	$	26		$	41		$	76	$	38		$	41	$	62	$	79
Reconciliation of PVP to GWP:
Total PVP	$	36	$	26		$	41		$	76	$	38		$	41	$	62	$	79
Less: PVP of non-financial guaranty insurance	6		0			1			0		0			1		6		1
Less: Financial guaranty installment premium PVP	17		1			(1		)	29		7			7		18		14
Plus: Installment GWP and other GAAP adjustments	19		(3		)	(1		)	40		(12		)	3		16		(9		)
Total GWP	$	32	$	22		$	40		$	87	$	19		$	36	$	54	$	55
Gross par written:
Public finance - U.S.	$	2,441	$	5,581		$	4,703		$	3,652	$	2,749		$	4,366	$	8,022	$	7,115
Public finance - non-U.S.	—		—			—			567		—			406		—		406
Structured finance - U.S.	261		—			—			66		—			3		261		3
Structured finance - non-U.S.	6		—			—			59		—			—		6		—
Total	$	2,708	$	5,581		$	4,703		$	4,344	$	2,749		$	4,775	$	8,289	$	7,524

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

11

Assured Guaranty Ltd.

Available-for-Sale Investment Portfolio and Cash

As of June 30, 2016

(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:
	Obligations of states and political subdivisions(4)		$	4,735	3.98	%	3.67	%	$	5,151	$	189
	Insured obligations of state and political subdivisions (2)(4)		408		4.89		4.54		452		20
	U.S. Treasury securities and obligations of U.S. government agencies		165		2.24		1.64		177		4
	Agency obligations		134		4.88		4.13		149		7
	Corporate securities (4)		1,402		3.93		3.10		1,443		55
	Mortgage-backed securities (MBS):
		Residential MBS (RMBS) (3)(4)	1,037		4.64		3.54		1,062		48
		Commercial MBS (CMBS)	505		3.50		2.83		539		18
	Asset-backed securities (4)		745		2.99		2.04		730		22
	Foreign government securities		270		2.37		1.54		257		6
		Total fixed maturity securities	9,401		3.92		3.34		9,960		369
Short-term investments			585		0.03		0.03		585		0
Cash (5)			190		—		—		190		—
		Total	$	10,176	3.69	%	3.15	%	$	10,735	$	369
Ratings (6):			Fair Value		% of Portfolio
	U.S. Treasury securities and obligations of U.S. government agencies		$	177	1.8	%
	Agency obligations		149		1.5
	AAA/Aaa		1,120		11.3
	AA/Aa		5,458		54.8
	A/A		1,774		17.8
	BBB		100		1.0
	Below investment grade (BIG) (7)		1,140		11.4
	Not rated		42		0.4
		Total fixed maturity securities, available-for-sale	$	9,960	100.0	%
Duration of fixed maturity securities and short-term investments (in years):					5.2
Average ratings of fixed maturity securities and short-term investments					A+

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 $149 million insured by AGC and AGM.

3) Includes fair value of $237 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) Cash is not included in the yield calculation.

6) Ratings are represented by the lower of the Moody's and S&P classifications except for bonds purchased for loss mitigation (loss mitigation bonds) or other 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 $1,959 million in par with carrying value of $1,139 million.

12

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		Accretion of Discount		Future Operating Net Premiums Earned		Future Credit Derivative Revenues		Total
2016 (as of June 30)				$	488,362
2016 Q3		$	14,540	473,822		$	93	$	4	$	97	$	8	$	105
2016 Q4		12,596		461,226		89		4		93		7		100
2017		50,131		411,095		326		16		342		19		361
2018		35,241		375,854		298		15		313		9		322
2019		28,825		347,029		266		14		280		7		287
2020		23,961		323,068		243		13		256		6		262
2016-2020		165,294		323,068		1,315		66		1,381		56		1,437
2021-2025		110,728		212,340		943		48		991		29		1,020
2026-2030		85,848		126,492		601		29		630		18		648
2031-2035		60,921		65,571		362		15		377		15		392
After 2035		65,571		—		288		11		299		13		312
	Total	$	488,362			$	3,509	$	169	$	3,678	$	131	$	3,809

Reconciliation of future operating net premiums earned to future GAAP net premiums earned

		Future GAAP Net Premiums Earned		Future Operating Net Premiums Earned related to FG VIEs		Future Operating Net Premiums Earned
2016 Q3		$	93	$	4	$	97
2016 Q4		89		4		93
2017		328		14		342
2018		302		11		313
2019		271		9		280
2020		249		7		256
2016-2020		1,332		49		1,381
2021-2025		969		22		991
2026-2030		617		13		630
2031-2035		365		12		377
After 2035		294		5		299
	Total	$	3,577	$	101	$	3,678

1) Represents the future expected amortization of current debt service outstanding (principal and interest), assuming no advance refundings, as of June 30, 2016. 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 15 for ‘‘Present Value of Financial Guaranty Insurance Net Expected Loss to be Expensed.’’

13

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			Other Structured Finance		Total		Estimated Ending Net Par Outstanding
2016 (as of June 30)													$	29,622
2016 Q3		$	735	$	262	$	56		$	225	$	1,278	28,344
2016 Q4		1,112		288		(13		)	439		1,826		26,518
2017		9,200		893		56			482		10,631		15,887
2018		991		800		(22		)	604		2,373		13,514
2019		474		908		9			557		1,948		11,566
2020		72		647		(3		)	321		1,037		10,529
2016-2020		12,584		3,798		83			2,628		19,093		10,529
2021-2025		372		1,528		175			2,328		4,403		6,126
2026-2030		260		410		899			807		2,376		3,750
2031-2035		512		111		497			930		2,050		1,700
After 2035		717		235		155			593		1,700		—
	Total structured finance	$	14,445	$	6,082	$	1,809		$	7,286	$	29,622

Public Finance

		Estimated Net Par Amortization		Estimated Ending Net Par Outstanding
2016 (as of June 30)				$	300,242
2016 Q3		$	9,721	290,521
2016 Q4		7,208		283,313
2017		26,226		257,087
2018		20,785		236,302
2019		15,691		220,611
2020		12,396		208,215
2016-2020		92,027		208,215
2021-2025		62,743		145,472
2026-2030		54,361		91,111
2031-2035		41,611		49,500
After 2035		49,500		—
	Total public finance	$	300,242

Net par outstanding (end of period)

		1Q-15		2Q-15		3Q-15		4Q-15		1Q-16		2Q-16
Public finance - U.S.		$	313,444	$	312,182	$	300,732	$	291,866	$	282,055	$	272,114
Public finance - non-U.S.		29,619		32,319		30,103		29,577		29,385		28,128
Structured finance - U.S.		38,430		38,906		35,435		31,770		30,452		25,562
Structured finance - non-U.S.		7,606		6,977		6,091		5,358		5,123		4,060
	Net par outstanding	$	389,099	$	390,384	$	372,361	$	358,571	$	347,015	$	329,864

Please refer to the Glossary for an explanation of the presentation of net par outstanding and of the various sectors.

14

Assured Guaranty Ltd.

Present Value (PV) of Net Expected Loss to be Expensed

As of June 30, 2016

(dollars in millions)

		Net Expected Loss to be Expensed (1)
		GAAP(2)		Operating(2)
2016 Q3		$	9	$	11
2016 Q4		8		11
2017		30		39
2018		28		35
2019		29		34
2020		27		32
2016-2020		131		162
2021-2025		103		120
2026-2030		71		79
2031-2035		40		52
After 2035		19		23
	Total expected PV of net expected loss to be expensed	364		436
Future accretion		199		216
	Total expected future loss and LAE	$	563	$	652

1) The present value of net expected loss to be paid is discounted using weighted-average risk free rates ranging from 0.0% to 2.46% for U.S. dollar denominated obligations.

2) Net expected loss to be expensed for GAAP reported income is different than operating income, a non-GAAP financial measure, by the amount related to consolidated FG VIEs and credit derivatives.

15

Assured Guaranty Ltd.

Financial Guaranty Profile (1 of 4)

(dollars in millions)

Net Par Outstanding and Average Rating by Asset Type

			June 30, 2016			December 31, 2015
			Net Par Outstanding		Avg. Internal Rating	Net Par Outstanding		Avg. Internal Rating
U.S. public finance:
	General obligation		$	118,551	A	$	126,255	A
	Tax backed		54,876		A	58,062		A
	Municipal utilities		42,959		A	45,936		A
	Transportation		22,383		A-	23,454		A
	Healthcare		13,636		A	15,006		A
	Higher education		10,787		A	11,936		A
	Infrastructure finance		3,096		BBB	4,993		BBB
	Housing		1,845		A-	2,037		A
	Investor-owned utilities		902		A-	916		A-
	Other public finance		3,079		A	3,271		A
		Total U.S. public finance	272,114		A	291,866		A
Non-U.S. public finance:
	Infrastructure finance		12,008		BBB	12,728		BBB
	Regulated utilities		9,535		BBB+	10,048		BBB+
	Pooled infrastructure		1,637		AA	1,879		AA
	Other public finance		4,948		A	4,922		A
		Total non-U.S. public finance	28,128		BBB+	29,577		BBB+
Total public finance			$	300,242	A	$	321,443	A
U.S. structured finance:
	Pooled corporate obligations		$	11,913	AAA	$	16,008	AAA
	RMBS		6,082		BBB-	7,067		BBB-
	Insurance securitizations		2,439		A+	3,000		A+
	Consumer receivables		1,905		A-	2,099		A-
	Financial products		1,809		AA-	1,906		AA-
	CMBS and other commercial real estate related exposures		387		AAA	533		AAA
	Commercial receivables		362		BBB	427		BBB+
	Other structured finance		665		AA	730		AA-
		Total U.S. structured finance	25,562		AA-	31,770		AA-
Non-U.S. structured finance:
	Pooled corporate obligations		2,532		AA-	3,645		AA
	RMBS		484		BBB	492		BBB
	Commercial receivables		441		BBB	600		BBB+
	Other structured finance		603		AA-	621		AA-
		Total non-U.S. structured finance	4,060		A+	5,358		AA-
Total structured finance			$	29,622	A+	$	37,128	AA-
Total			$	329,864	A	$	358,571	A

Please refer to the Glossary for an explanation of the presentation of net par outstanding and the Company's internal rating approach, and of the various sectors.

16

Assured Guaranty Ltd.

Financial Guaranty Profile (2 of 4)

As of June 30, 2016

(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.				Total
Ratings:		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%
AAA		$	2,376	0.9	%	$	695	2.5	%	$	11,362	44.4	%	$	1,628	40.1	%	$	16,061	4.9	%
AA		59,310		21.8		1,775		6.3		6,719		26.3		149		3.7		67,953		20.6
A		142,028		52.2		6,440		22.9		2,008		7.9		457		11.2		150,933		45.7
BBB		60,132		22.1		17,840		63.4		920		3.6		1,235		30.4		80,127		24.3
BIG		8,268		3.0		1,378		4.9		4,553		17.8		591		14.6		14,790		4.5
	Net Par Outstanding (1)	$	272,114	100.0	%	$	28,128	100.0	%	$	25,562	100.0	%	$	4,060	100.0	%	$	329,864	100.0	%

1) Excludes $1.4 billion of loss mitigation securities insured and held by the Company as of June 30, 2016, which are primarily BIG.

Please refer to the Glossary for an explanation of the presentation of net par outstanding and the Company's internal rating approach, and of the various sectors.

17

Assured Guaranty Ltd.

Financial Guaranty Profile (3 of 4)

As of June 30, 2016

(dollars in millions)

Geographic Distribution of Financial Guaranty Portfolio

			Net Par Outstanding		% of Total
U.S.:
U.S. public finance:
	California		$	47,147	14.3	%
	Pennsylvania		22,360		6.8
	Texas		22,009		6.7
	New York		21,075		6.4
	Illinois		19,279		5.8
	Florida		15,320		4.6
	New Jersey		13,252		4.0
	Michigan		9,768		3.0
	Georgia		6,792		2.1
	Ohio		6,346		1.9
	Other states		88,766		26.9
		Total public finance	272,114		82.5
U.S. structured finance:			25,562		7.7
		Total U.S.	297,676		90.2
Non-U.S.:
	United Kingdom		16,702		5.1
	Australia		3,330		1.0
	Canada		2,866		0.9
	France		2,516		0.8
	Italy		1,266		0.4
	Other		5,508		1.6
		Total non-U.S.	32,188		9.8
Total net par outstanding			$	329,864	100.0	%

Please refer to the Glossary for an explanation of the presentation of net par outstanding and of the various sectors.

18

Assured Guaranty Ltd.

Financial Guaranty Profile (4 of 4)

As of June 30, 2016

(dollars in millions)

Net Direct Economic Exposure to Selected European Countries (1)

	Hungary		Italy		Portugal		Spain		Turkey (4)		Total
Sub-sovereign exposure (2)	$	265	$	793	$	80	$	366	$	—	$	1,504
Non-sovereign exposure (3)	174		432		—		—		204		810
Total	$	439	$	1,225	$	80	$	366	$	204	$	2,314
Total BIG	$	369	$	—	$	80	$	366	$	—	$	815

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

2) Sub-sovereign exposure in Selected European Countries includes transactions backed by receivables from or supported by sub-sovereigns, which are governmental or government-backed entities other than the ultimate governing body of the country.

3) Non-sovereign exposure in Selected European Countries includes debt of regulated utilities, RMBS and diversified payment rights (DPR) securitizations.

4) The $204 millionnet insured par exposure in Turkey is to DPR securitizations sponsored by a major Turkish bank. These DPR securitizations were established outside of Turkey and involve payment orders in U.S. dollars, pounds sterling and Euros from persons outside of Turkey to beneficiaries in Turkey who are customers of the sponsoring bank. The sponsoring bank's correspondent banks have agreed to remit all such payments to a trustee-controlled account outside Turkey, where debt service payments for the DPR securitization are given priority over payments to the sponsoring bank.

Please refer to the Glossary for an explanation of the Company's net par outstanding, internal rating approach and of the various sectors.

19

Assured Guaranty Ltd.

Exposure to Puerto Rico (1 of 3)

As of June 30, 2016

(dollars in millions)

Exposure to Puerto Rico

	Gross Par Outstanding		Net Par Outstanding		Gross Debt Service Outstanding		Net Debt Service Outstanding
Total	$	5,756	$	5,054	$	9,483	$	8,466

Net Exposure to Puerto Rico by Risk⁽¹⁾ 

	Net Par Outstanding
	AGM		AGC		AG Re		Eliminations (2)			Total Net Par Outstanding (3)		Gross Par Outstanding
Commonwealth Constitutionally Guaranteed
Commonwealth of Puerto Rico - General Obligation Bonds (5)	$	720	$	415	$	480	$	—		$	1,615	$	1,738
Puerto Rico Public Buildings Authority (PBA)(5)	13		137		38		—			188		194
Public Corporations - Certain Revenues Potentially Subject to Clawback(4)
Puerto Rico Highways and Transportation Authority (PRHTA) (Transportation revenue)	289		476		225		(80		)	910		937
PRHTA (Highways revenue)	219		100		50		—			369		574
Puerto Rico Convention Center District Authority (PRCCDA)	—		82		82		—			164		164
Puerto Rico Infrastructure Financing Authority (PRIFA)(5)	—		10		8		—			18		18
Other Public Corporations
Puerto Rico Electric Power Authority (PREPA)	431		74		239		—			744		902
Puerto Rico Aqueduct and Sewer Authority (PRASA)	—		296		92		—			388		388
Puerto Rico Municipal Finance Agency (MFA)	206		65		116		—			387		570
Puerto Rico Sales Tax Financing Corporation (COFINA)	262		—		8		—			270		270
University of Puerto Rico	—		1		—		—			1		1
Total net exposure to Puerto Rico	$	2,140	$	1,656	$	1,338	$	(80	)	$	5,054	$	5,756

1) The general obligation bonds of Puerto Rico and various obligations of its related authorities and public corporations are rated triple-C or below.

2) Net par 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.

3) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $34 million and a fully accreted net par at maturity of $67 million. Of these amounts, current net par of $18 million and fully accreted net par at maturity of $50 million relate to the Puerto Rico Sales Tax Financing Corporation, current net par of $10 million and fully accreted net par at maturity of $11 million relate to the PRHTA, and current net par of $5 million and fully accreted net par at maturity of $5 million relate to the Commonwealth General Obligation Bonds.

4) The Governor issued executive orders on November 30, 2015, and December 8, 2015, directing the Puerto Rico Department of Treasury and the Puerto Rico Tourism Company to retain or transfer certain taxes and revenues pledged to secure the payment of bonds issued by PRHTA, PRIFA and PRCCDA. On January 7, 2016 the Company sued various Puerto Rico governmental officials in the United States District Court, District of Puerto Rico asserting that this attempt to “claw back” pledged taxes and revenues is unconstitutional, and demanding declaratory and injunctive relief.

5) As of the date of this filing, the Company has paid claims on these credits.

20

Assured Guaranty Ltd.

Exposure to Puerto Rico (2 of 3)

As of June 30, 2016

(dollars in millions)

Amortization Schedule of Net Par Outstanding of Puerto Rico⁽¹⁾ 

	2016 (3Q)			2016 (4Q)		2017			2018			2019			2020			2021			2022			2023		2024		2025			2026 -2030			2031 -2035		2036 -2040		2041 -2045		2046 -2047		Total
Commonwealth Constitutionally Guaranteed
Commonwealth of Puerto Rico - General Obligation Bonds	$	142		$	0	$	95		$	75		$	82		$	137		$	16		$	37		$	14	$	73	$	68		$	255		$	475	$	146	$	—	$	—	$	1,615
PBA	8			—		30			—			5			10			12			0			7		0		8			53			39		16		—		—		188
Public Corporations - Certain Revenues Potentially Subject to Clawback
PRHTA (Transportation revenue)	33			0		36			42			28			23			18			19			21		1		26			150			228		240		45		—		910
PRHTA (Highways revenue)	19			—		10			10			21			22			26			6			8		8		8			27			167		37		—		—		369
PRCCDA	11			—		—			—			—			—			—			—			—		—		—			19			105		29		—		—		164
PRIFA	—			—		—			2			—			—			—			—			2		—		—			—			—		10		4		—		18
Other Public Corporations
PREPA	20			0		5			4			25			42			22			22			81		78		52			309			84		0		—		—		744
PRASA	15			—		—			—			—			—			—			—			—		2		25			84			—		2		92		168		388
MFA	55			—		47			47			44			37			33			33			16		12		11			52			—		—		—		—		387
COFINA	(1		)	0		(1		)	(1		)	(1		)	(1		)	(2		)	(2		)	1		0		(2		)	(6		)	32		99		155		—		270
University of Puerto Rico	0			—		0			0			0			0			0			0			0		0		0			0			1		—		—		—		1
Total net par for Puerto Rico	$	302		$	0	$	222		$	179		$	204		$	270		$	125		$	115		$	150	$	174	$	196		$	943		$	1,131	$	579	$	296	$	168	$	5,054

1) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $34 million and a fully accreted net par at maturity of $67 million. Of these amounts, current net par of $18 million and fully accreted net par at maturity of $50 million relate to the Puerto Rico Sales Tax Financing Corporation, current net par of $10 million and fully accreted net par at maturity of $11 million relate to the PRHTA, and current net par of $5 million and fully accreted net par at maturity of $5 million relate to the Commonwealth General Obligation Bonds.

21

Assured Guaranty Ltd.

Exposure to Puerto Rico (3 of 3)

As of June 30, 2016

(dollars in millions)

Amortization Schedule of Net Debt Service Outstanding of Puerto Rico⁽¹⁾ 

	2016 (3Q)		2016 (4Q)		2017		2018		2019		2020		2021		2022		2023		2024		2025		2026 -2030		2031 -2035		2036 -2040		2041 -2045		2046 -2047		Total
Commonwealth Constitutionally Guaranteed
Commonwealth of Puerto Rico - General Obligation Bonds	$	184	$	0	$	171	$	146	$	150	$	201	$	72	$	93	$	69	$	127	$	117	$	459	$	605	$	161	$	—	$	—	$	2,555
PBA	13		—		39		8		12		18		20		6		14		6		14		72		49		16		—		—		287
Public Corporations - Certain Revenues Potentially Subject to Clawback
PRHTA (Transportation revenue)	57		0		82		86		69		63		57		57		58		37		61		309		348		288		47		—		1,619
PRHTA (Highways revenue)	29		—		29		29		39		39		42		20		21		21		21		87		203		38		—		—		618
PRCCDA	15		—		7		7		7		7		7		7		7		7		7		51		127		30		—		—		286
PRIFA	0		—		1		3		1		1		1		1		3		0		1		4		3		13		4		—		36
Other Public Corporations
PREPA	35		2		38		37		58		74		52		50		109		102		73		366		92		0		—		—		1,088
PRASA	25		—		19		19		19		19		19		19		20		21		45		160		68		70		159		181		863
MFA	64		—		64		62		56		47		40		39		21		16		15		57		—		—		—		—		481
COFINA	6		0		13		13		13		13		13		13		16		15		12		68		103		164		170		—		632
University of Puerto Rico	0		—		0		0		0		0		0		0		0		0		0		0		1		—		—		—		1
Total net par for Puerto Rico	$	428	$	2	$	463	$	410	$	424	$	482	$	323	$	305	$	338	$	352	$	366	$	1,633	$	1,599	$	780	$	380	$	181	$	8,466

1) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $34 million and a fully accreted net par at maturity of $67 million. Of these amounts, current net par of $18 million and fully accreted net par at maturity of $50 million relate to the Puerto Rico Sales Tax Financing Corporation, current net par of $10 million and fully accreted net par at maturity of $11 million relate to the PRHTA, and current net par of $5 million and fully accreted net par at maturity of $5 million relate to the Commonwealth General Obligation Bonds.

22

Assured Guaranty Ltd.

Direct Pooled Corporate Obligations Profile

As of June 30, 2016

(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:
	AAA		$	9,840	68.8	%	23.4	%	29.7	%
	AA		2,029		14.2		44.9		54.1
	A		977		6.8		44.3		47.3
	BBB		601		4.2		39.0		37.8
	BIG		855		6.0		39.7		23.6
		Total exposures	$	14,302	100.0	%	29.1	%	34.4	%

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:
	Synthetic investment grade pooled corporates		$	7,116	49.7	%	21.7	%	19.4	%	AAA
	CBOs/CLOs		3,275		22.9		29.3		55.1		AAA
	Trust preferred
		Banks and insurance	2,199		15.4		45.3		46.6		A
		U.S. mortgage and real estate investment trusts	560		3.9		49.5		51.6		BBB
		European mortgage and real estate investment trusts	496		3.5		36.4		37.6		BBB
	Other pooled corporates		656		4.6		—		—		BB
		Total exposures	$	14,302	100.0	%	29.1	%	34.4	%	AA+

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

23

Assured Guaranty Ltd.

Consolidated U.S. RMBS Profile

As of June 30, 2016

(dollars in millions)

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

Ratings:	Prime First Lien		Alt-A First Lien		Option ARMs		Subprime First Lien		Second Lien		Total Net Par Outstanding
AAA	$	2	$	197	$	16	$	1,510	$	9	$	1,736
AA	35		256		73		334		1		699
A	14		8		2		46		0		70
BBB	61		7		—		83		0		151
BIG	124		622		96		1,220		1,366		3,427
Total exposures	$	236	$	1,089	$	186	$	3,193	$	1,376	$	6,082

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

Year insured:	Prime First Lien		Alt-A First Lien		Option ARMs		Subprime First Lien		Second Lien		Total Net Par Outstanding
2004 and prior	$	44	$	49	$	16	$	1,003	$	89	$	1,202
2005	114		414		34		170		302		1,034
2006	79		83		30		674		385		1,251
2007	—		543		107		1,279		600		2,528
2008	—		—		—		67		—		67
Total exposures	$	236	$	1,089	$	186	$	3,193	$	1,376	$	6,082

Please refer to the Glossary for an explanation of the Company's presentation of net par outstanding and a description of performance indicators 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
			June 30, 2016		December 31, 2015
U.S. public finance:
	General obligation		$	3,590	$	2,964
	Tax backed		2,352		2,389
	Municipal utilities		1,188		1,247
	Infrastructure finance		404		403
	Healthcare		303		350
	Higher education		280		244
	Transportation		86		86
	Housing		19		19
	Other public finance		46		82
		Total U.S. public finance	8,268		7,784
Non-U.S. public finance:
	Infrastructure finance		1,054		1,053
	Other public finance		324		325
		Total non-U.S. public finance	1,378		1,378
Total public finance			$	9,646	$	9,162
U.S. structured finance:
	RMBS		$	3,427	$	3,973
	Pooled corporate obligations		563		806
	Consumer receivables		244		305
	Insurance securitizations		216		216
	Commercial receivables		87		75
	Other structured finance		16		94
		Total U.S. structured finance	4,553		5,469
Non-U.S. structured finance:
	Pooled corporate obligations		385		386
	RMBS		105		103
	Commercial receivables		101		63
		Total non-U.S. structured finance	591		552
Total structured finance			$	5,144	$	6,021
Total BIG net par outstanding			$	14,790	$	15,183

Please refer to the Glossary for an explanation of the Company's presentation of net par outstanding and a description of various sectors.

25

Assured Guaranty Ltd.

Below Investment Grade Exposures (2 of 5)

(dollars in millions)

Net Par Outstanding by BIG Category⁽¹⁾  

				June 30, 2016		December 31, 2015
Category 1
	U.S. public finance			$	4,902	$	4,765
	Non-U.S. public finance			863		875
	U.S. structured finance			817		1,874
	Non-U.S. structured finance			474		509
		Total Category 1		7,056		8,023
Category 2
	U.S. public finance			3,191		2,883
	Non-U.S. public finance			515		503
	U.S. structured finance			746		700
	Non-U.S. structured finance			117		43
		Total Category 2		4,569		4,129
Category 3
	U.S. public finance			175		136
	Non-U.S. public finance			—		—
	U.S. structured finance			2,990		2,895
	Non-U.S. structured finance			—		—
		Total Category 3		3,165		3,031
			BIG Total	$	14,790	$	15,183

1) Assured Guaranty's surveillance department is responsible for monitoring the Company's portfolio of credits and maintains a list of BIG credits. 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.

Please refer to the Glossary for an explanation of the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

26

Assured Guaranty Ltd.

Below Investment Grade Exposures (3 of 5)

As of June 30, 2016

(dollars in millions)

Public Finance BIG Exposures with Revenue Sources Greater Than $50 Million

			Net Par Outstanding		Internal Rating
Name or description
U.S. public finance:
		Puerto Rico, General Obligation, Appropriations and Guarantees of the Commonwealth	$	1,821	CCC
		Puerto Rico Highways & Transportation Authority	1,279		CCC-
		Puerto Rico Electric Power Authority (PREPA)	744		CC
		Puerto Rico Aqueduct & Sewer Authority (PRASA)	388		CCC
		Puerto Rico Municipal Finance Agency	387		CCC-
		Oyster Bay, New York	370		BB+
		Louisville Arena Authority Inc.	336		BB
		Puerto Rico Sales Tax Financing Corporation (COFINA)	270		CCC+
		Puerto Rico Convention Center District Authority	164		CCC-
		Woonsocket (City of), Rhode Island	138		BB
		Stockton Pension Obligation Bonds, California	115		D
		Penn Hills School District, Pennsylvania	107		BB
		Butler County General Authority, Pennsylvania	105		BB
		Detroit-Wayne County Stadium Authority, Michigan	93		BB-
		Ebert Metropolitan District, Colorado	87		B+
		Orange County Tourist Development Tax, Florida	85		BB
		Atlantic City, New Jersey	73		BB
		West Mifflin Area School District, Pennsylvania	72		BB
		Knox Hills, LLC	65		B
		Pennsylvania Economic Development Financing Authority (Capitol Region Parking System)	61		BB
		Jennie Stuart Medical Center	58		BB+
		Robert Wood Johnson Health Care Corporation at Hamilton	54		B+
		Southlands Metropolitan District No. 1, Colorado	52		BB
		Pacific Lutheran University, Washington	52		BB+
		University of the Arts, Pennsylvania	51		BB
	Total		$	7,027
Non-U.S. public finance:
		Reliance Rail Finance Pty Limited	$	513	BB
		M6 Duna Autopalya Koncesszios Zartkoruen Mukodo Reszvenytarsasag	265		BB-
		Valencia Fair	243		BB-
		Autovia de la Mancha, S.A.	116		BB-
		CountyRoute (A130) plc	96		BB-
		Metropolitano de PortoLease and Sublease of Railroad Equipment	54		B+
	Total		$	1,287
Total			$	8,314

Please refer to the Glossary for an explanation of the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

27

Assured Guaranty Ltd.

Below Investment Grade Exposures (4 of 5)

As of June 30, 2016

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million

	BIG Net Par Outstanding		Internal Rating	Current Credit Enhancement	60+ Day Delinquencies
Name or description
U.S. structured finance:
RMBS:
Option One 2007-FXD2	$	256	CCC	0.0%	20.7%
Countrywide HELOC 2006-I	213		B	0.0%	2.6%
MABS 2007-NCW	185		CCC	0.0%	37.4%
Nomura Asset Accept. Corp. 2007-1	174		CCC	0.0%	26.0%
Soundview 2007-WMC1	167		CCC	-	41.2%
Countrywide Home Equity Loan Trust 2007-D	130		CCC	0.0%	2.8%
New Century 2005-A	118		CCC	6.2%	18.6%
Countrywide Home Equity Loan Trust 2005-J	116		CCC	0.1%	4.6%
Countrywide HELOC 2006-F	113		CCC	0.0%	5.3%
Countrywide HELOC 2005-D	108		CCC	0.0%	5.0%
Countrywide HELOC 2007-B	101		B	0.0%	2.8%
Countrywide HELOC 2007-A	101		B	0.0%	3.8%
IndyMac 2007-H1 HELOC	84		B	0.0%	1.6%
Doral 2006-1	79		B	7.5%	22.2%
GMACM 2004-HE3	67		CCC	0.0%	6.4%
Soundview (Delta) 2008-1	67		CCC	1.8%	24.5%
Ace 2007-D1	55		CCC	3.6%	26.7%
Ace Home Equity Loan Trust 2007-SL1	55		CCC	-	6.4%
IMPAC CMB Trust Series 2007-A	50		BB	10.1%	16.6%
Total RMBS	$	2,239

Please refer to the Glossary for the Company's internal rating approach, presentation of net par outstanding and a description of performance indicators and sectors.

28

Assured Guaranty Ltd.

Below Investment Grade Exposures (5 of 5)

As of June 30, 2016

(dollars in millions)

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

	BIG Net Par Outstanding		Internal Rating	Current Credit Enhancement
Name or description
U.S. structured finance:
Non-RMBS:
Alesco Preferred Funding XVI, Ltd.	$	215	BB	19.9%
Ballantyne Re Plc	175		CC	N/A
Taberna Preferred Funding II, Ltd.	147		B	31.5%
US Capital Funding IV, Ltd.	127		CCC	11.7%
Taberna Preferred Funding VI, Ltd.	74		BB-	38.8%
National Collegiate Trust Series 2006-2	68		CCC	N/A
Subtotal non-RMBS	$	806
Subtotal U.S. structured finance	$	3,045
Non-U.S. structured finance:
Gleneagles Funding Ltd.	$	231	BB	N/A
Private Pooled Corporate Transaction	88		BB	N/A
Blade Engine Securitization Ltd. Series 2006-1A-1	74		CCC	N/A
FHB	57		BB-	N/A
Subtotal Non-U.S. structured finance	$	450
Total	$	3,495

Please refer to the Glossary for the Company's internal rating approach, presentation of net par outstanding and a description of performance indicators and sectors.

29

Assured Guaranty Ltd.

Largest Exposures by Sector (1 of 4)

As of June 30, 2016

(dollars in millions)

50 Largest U.S. Public Finance Exposures by Revenue Source

Credit Name:	Net Par Outstanding		Internal Rating
New Jersey (State of)	$	4,713	BBB+
California (State of)	2,242		A
Illinois (State of)	2,126		BBB+
New York (City of) New York	1,948		A+
Puerto Rico, General Obligation, Appropriations and Guarantees of the Commonwealth	1,821		CCC
Massachusetts (Commonwealth of)	1,771		AA
New York (State of)	1,756		A+
Los Angeles Unified School District, California	1,615		AA-
Pennsylvania (Commonwealth of)	1,611		A
Chicago (City of) Illinois	1,606		BBB+
Philadelphia (City of) Pennsylvania	1,510		BBB+
Wisconsin (State of)	1,444		A+
Miami-Dade County Florida Aviation Authority - Miami International Airport	1,401		A
Puerto Rico Highways & Transportation Authority	1,279		CCC-
New York Metropolitan Transportation Authority	1,275		A
Chicago Public Schools, Illinois	1,273		BBB-
Massachusetts (Commonwealth of) Water Resources	1,248		AA
Georgia Board of Regents	1,218		A
Port Authority of New York and New Jersey	1,200		A+
North Texas Tollway Authority Dallas, Texas	1,171		A
Michigan (State of)	1,072		A+
Long Island Power Authority	1,054		BBB+
Philadelphia School District, Pennsylvania	1,037		BBB
Great Lakes Water Authority (Sewerage), Michigan	1,032		BBB
Arizona (State of)	1,019		A+
Chicago-O'Hare International Airport, Illinois	1,002		A-
Miami-Dade County School Board, Florida	997		A-
Great Lakes Water Authority (Water), Michigan	878		BBB
Atlanta Georgia Water & Sewer System	870		BBB+
New York City Municipal Water Finance Authority	864		AA
Central Florida Expressway Authority, Florida	845		A+
Washington (State of)	809		AA
San Diego Unified School District, California	801		AA
Kentucky (Commonwealth of)	786		A+
Miami-Dade County, Florida Water & Sewer	771		A+
District of Columbia	771		AA-
Houston, Texas Water and Sewer Authority	764		AA-
Illinois Toll Highway Authority	750		AA-
Puerto Rico Electric Power Authority (PREPA)	744		CC
Metro Washington Airport Authority	729		A+
Oglethorpe Power Corporation, Georgia	718		BBB+
Pennsylvania Turnpike Commission	712		A-
Miami-Dade County, Florida	700		A+
Nassau County, New York	698		A-
Chicago Transit Authority, Illinois	688		AA-
San Jose Airport, California	686		BBB+
Metropolitan Pier & Exposition Authority, Illinois	681		A
Garden State Preservation Trust (Open Space & Farmland), New Jersey	642		AA
Jefferson County Alabama Sewer	637		BBB-
San Francisco (City & County) Airport Commission, California	635		A
Total top 50 U.S. public finance exposures	$	58,620

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 June 30, 2016

(dollars in millions)

50 Largest U.S. Structured Finance Exposures

Credit Name:	Net Par Outstanding		Internal Rating	Credit Enhancement
Private US Insurance Securitization	$	800	AA	N/A
Synthetic Investment Grade Pooled Corporate CDO	766		AAA	14.8%
Synthetic Investment Grade Pooled Corporate CDO	744		AAA	26.7%
Synthetic Investment Grade Pooled Corporate CDO	655		AAA	14.9%
Synthetic Investment Grade Pooled Corporate CDO	563		AAA	23.4%
Fortress Credit Opportunities I, LP.	546		AA	50.7%
Synthetic Investment Grade Pooled Corporate CDO	516		AAA	14.3%
Private US Insurance Securitization	500		AA	N/A
Synthetic Investment Grade Pooled Corporate CDO	450		AAA	17.7%
SLM Private Credit Student Trust 2007-A	450		A-	18.1%
Synthetic Investment Grade Pooled Corporate CDO	440		AAA	21.2%
LIICA Holdings, LLC	428		AA	N/A
SLM Private Credit Student Loan Trust 2007-6	392		AAA	4.2%
Synthetic Investment Grade Pooled Corporate CDO	380		AAA	29.2%
SLM Private Credit Student Loan Trust 2006-C	356		A-	21.3%
Synthetic Investment Grade Pooled Corporate CDO	346		AAA	16.3%
Synthetic Investment Grade Pooled Corporate CDO	311		AAA	14.2%
Cent CDO 15 Limited	287		AAA	100.0%
Synthetic Investment Grade Pooled Corporate CDO	283		AAA	30.3%
Synthetic Investment Grade Pooled Corporate CDO	270		AAA	29.1%
Cent CDO 12 Limited	258		AAA	25.1%
Option One 2007-FXD2	256		CCC	0.0%
Private US Insurance Securitization	250		AA	N/A
ALESCO Preferred Funding XIV	227		A+	43.7%
Alesco Preferred Funding XVI, Ltd.	215		BB	19.9%
Countrywide HELOC 2006-I	213		B	0.0%
Timberlake Financial, LLC Floating Insured Notes	212		BBB-	N/A
Synthetic Investment Grade Pooled Corporate CDO	204		AAA	9.2%
Synthetic Investment Grade Pooled Corporate CDO	204		AAA	10.4%
MABS 2007-NCW	185		CCC	0.0%
Ballantyne Re Plc	175		CC	N/A
Grayson CLO	175		AAA	47.4%
Nomura Asset Accept. Corp. 2007-1	174		CCC	0.0%
Synthetic Investment Grade Pooled Corporate CDO	170		AAA	27.6%
CWALT Alternative Loan Trust 2007-HY9	167		A+	0.4%
Soundview 2007-WMC1	167		CCC	-
CWABS 2007-4	157		A	2.5%
Taberna Preferred Funding II, Ltd.	147		B	31.5%
Private Other Structured Finance Transaction	144		AAA	N/A
Trapeza CDO XI	137		A-	47.6%
ALESCO Preferred Funding XIII, Ltd.	137		AA	51.7%
Mountain View CLO II	136		AAA	30.4%
Countrywide Home Equity Loan Trust 2007-D	130		CCC	0.0%
US Capital Funding IV, Ltd	127		CCC	11.7%
Private Other Structured Finance Transaction	126		AAA	N/A
Kingsland IV	121		AAA	39.2%
Lime Street CLO, Ltd.	120		AAA	100.0%
Countrywide 2007-13	119		AA-	19.6%
New Century 2005-A	118		CCC	6.2%
Countrywide Home Equity Loan Trust 2005-J	116		CCC	0.1%
Total top 50 U.S. structured finance exposures	$	14,570

Please refer to the Glossary for the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

31

Assured Guaranty Ltd.

Largest Exposures by Sector (3 of 4)

As of June 30, 2016

(dollars in millions)

25 Largest Non-U.S. Exposures by Revenue Source

Credit Name:	Country	Net Par Outstanding		Internal Rating
Hydro-Quebec, Province of Quebec	Canada	$	2,037	A+
Thames Water Utility Finance PLC	United Kingdom	1,045		A-
HIT Finance B.V.	France	996		BBB+
Channel Link Enterprises Finance PLC	France, United Kingdom	830		BBB
Capital Hospitals (Barts)	United Kingdom	730		BBB-
Artesian Finance II Plc (Southern)	United Kingdom	661		A-
Verbund - Lease and Sublease of Hydro-Electric Equipment	Austria	660		AAA
Southern Gas Networks PLC	United Kingdom	598		BBB
International Infrastructure Pool	United Kingdom	585		AA
Campania Region	Italy	572		BBB-
InspirED Education (South Lanarkshire) plc	Scotland	562		BBB-
A28 Motorway	France	537		BBB-
International Infrastructure Pool	United Kingdom	526		AA
International Infrastructure Pool	United Kingdom	526		AA
Reliance Rail Finance Pty Limited	Australia	513		BB
Southern Cross Airports Corporation Pty	Australia	502		BBB
Envestra Limited	Australia	486		BBB
Scotland Gas Networks Plc	United Kingdom	460		BBB
Central Nottinghamshire Hospitals PLC	United Kingdom	457		BBB
United Utilities Water PLC	United Kingdom	432		BBB+
NewHospitals (St Helens & Knowsley) Finance PLC	United Kingdom	424		BBB
The Hospital Company (QAH Portsmouth) Limited	United Kingdom	405		BBB
Yorkshire Water Services Finance Plc	United Kingdom	379		A-
Integrated Accommodation Services PLC	United Kingdom	368		BBB+
Northumbrian Water	United Kingdom	367		BBB+
Total top 25 non-U.S. exposures		$	15,658

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 June 30, 2016

(dollars in millions)

10 Largest U.S. Residential Mortgage Servicer Exposures

Servicer:	Net Par Outstanding
Ocwen Loan Servicing, LLC (1)	$	1,880
Specialized Loan Servicing, LLC	1,560
Bank of America, N.A. (2)	1,344
Wells Fargo Bank N.A.	531
JPMorgan Chase Bank	228
Select Portfolio Servicing, Inc.	145
Banco Popular de Puerto Rico	79
Ditech Financial LLC	55
Carrington Mortgage Services, LLC	41
Citicorp Mortgage Securities, Inc.	38
Total top 10 U.S. residential mortgage servicer exposures	$	5,901

1) Includes GMAC Mortgage LLC, Residential Funding Inc. and Homeward Residential Inc.

2) Includes Countrywide Home Loans Servicing LP.

10 Largest U.S. Healthcare Exposures

Credit Name:	Net Par Outstanding		Internal Rating	State
MultiCare Health System	$	409	AA-	WA
Dignity Health, California	370		A	CA
Children's National Medical Center, District of Columbia	365		A-	DC
CHRISTUS Health	364		A	TX
Methodist Healthcare	359		A+	TN
Bon Secours Health System Obligated Group	323		A-	MD
Carolina HealthCare System	319		AA-	NC
Palmetto Health Alliance, South Carolina	274		A-	SC
Columbus Regional Healthcare System Inc.	272		BBB-	GA
Catholic Health Partners	272		A+	OH
Total top 10 U.S. healthcare exposures	$	3,327

Please refer to the Glossary for the Company's internal rating approach and presentation of net par outstanding.

33

Assured Guaranty Ltd.

Rollforward of Net Expected Loss and LAE to be Paid After Benefit for R&W

(dollars in millions)

Rollforward of Net Expected Loss and LAE to be Paid⁽¹⁾ After Benefit for R&W for the Three Months Ended June 30, 2016

	Net Expected Loss to be Paid (Recovered) as of March 31, 2016			Economic Loss Development During 2Q-16			(Paid) Recovered Losses During 2Q-16			Net Expected Loss to be Paid (Recovered) as of June 30, 2016
Public Finance:
U.S. public finance	$	864		$	111		$	(12	)	$	963
Non-U.S public finance	39			(2		)	—			37
Public Finance	903			109			(12		)	1,000
U.S. RMBS
First lien:
Prime first lien	(1		)	0			4			3
Alt-A first lien	36			(38		)	(94		)	(96		)
Option ARMs	(47		)	(10		)	1			(56		)
Subprime first lien	240			(26		)	13			227
Total first lien	228			(74		)	(76		)	78
Second lien	65			(7		)	56			114
Total U.S. RMBS (2)	293			(81		)	(20		)	192
Triple-X life insurance transactions	102			(2		)	0			100
Student loans	32			(1		)	0			31
Other structured finance	7			(3		)	(1		)	3
Structured Finance	434			(87		)	(21		)	326
Total	$	1,337		$	22		$	(33	)	$	1,326

Rollforward of Net Expected Loss and LAE to be Paid⁽¹⁾ After Benefit for R&W for the Six Months Ended June 30, 2016

	Net Expected Loss to be Paid (Recovered) as of December 31, 2015			Economic Loss Development During 2016			(Paid) Recovered Losses During 2016			Net Expected Loss to be Paid (Recovered) as of June 30, 2016
Public Finance:
U.S. public finance	$	771		$	209		$	(17	)	$	963
Non-U.S public finance	38			(1		)	—			37
Public Finance	809			208			(17		)	1,000
U.S. RMBS
First lien:
Prime first lien	(2		)	0			5			3
Alt-A first lien	127			(54		)	(169		)	(96		)
Option ARMs	(28		)	(31		)	3			(56		)
Subprime first lien	251			(25		)	1			227
Total first lien	348			(110		)	(160		)	78
Second lien	61			(2		)	55			114
Total U.S. RMBS (2)	409			(112		)	(105		)	192
Triple-X life insurance transactions	99			2			(1		)	100
Student loans	54			(15		)	(8		)	31
Other structured finance	20			(2		)	(15		)	3
Structured Finance	582			(127		)	(129		)	326
Total	$	1,391		$	81		$	(146	)	$	1,326

1) Includes expected loss to be paid, economic loss development and paid (recovered) losses for all contracts (i.e. those accounted for as insurance, credit derivatives and FG VIEs).

2) Includes future net representations and warranties (R&W) recoverable (payable) of $79 million as of December 31, 2015, $47 million as of March 31, 2016 and $(58) million as of June 30, 2016.

34

Assured Guaranty Ltd.

Loss Measures

As of June 30, 2016

(dollars in millions)

	Total Net Par Outstanding for BIG Transactions		2Q-16 Loss and LAE			2Q-16 Operating Loss and LAE			2016 Loss and LAE			2016 Operating Loss and LAE			GAAP Net Expected Loss to be Expensed		Operating Net Expected Loss to be Expensed
Public Finance:
U.S. public finance	$	8,268	$	116		$	116		$	213		$	213		$	181	$	181
Non-U.S public finance	1,378		(1		)	(1		)	(1		)	(1		)	13		13
Public Finance	9,646		115			115			212			212			194		194
Structured Finance:
U.S. RMBS:
First lien:
Prime first lien	124		(1		)	(1		)	(1		)	(1		)	$	0	0
Alt-A first lien	621		3			2			10			10			24		34
Option ARMs	96		(7		)	(8		)	(21		)	(24		)	16		16
Subprime	1,220		(9		)	(19		)	(5		)	(17		)	57		61
Total first lien	2,061		(14		)	(26		)	(17		)	(32		)	97		111
Second lien	1,366		5			4			12			17			58		116
Total U.S. RMBS	3,427		(9		)	(22		)	(5		)	(15		)	155		227
Triple-X life insurance transactions	216		(1		)	(1		)	2			2			5		5
TruPS	563		0			1			0			1			—		—
Student loans	110		0			0			(14		)	(14		)	1		1
Other structured finance	828		(3		)	(5		)	(3		)	(7		)	9		9
Structured Finance	5,144		(13		)	(27		)	(20		)	(33		)	170		242
Total	$	14,790	$	102		$	88		$	192		$	179		$	364	$	436

Reconciliation of GAAP to Non-GAAP operating loss measures

	2Q-16			2016
Loss and LAE	$	102		$	192
Adjustments to add losses incurred related to:
Credit derivatives	$	(11	)	$	(17	)
FG VIEs	(3		)	4
Operating loss and LAE	$	88		$	179

	As of June 30, 2016
GAAP net expected loss to be expensed	$	364
Adjustments to add net expected loss to be expensed related to:
Credit derivatives	0
FG VIEs	72
Operating net expected loss to be expensed	$	436
GAAP future accretion	$	199
Adjustments to add future accretion related to:
Credit derivatives	0
FG VIEs	17
Operating future accretion	$	216

Please refer to the Glossary for an explanation of the presentation of net par outstanding and of the various sectors.

35

Assured Guaranty Ltd.

Summary of Financial and Statistical Data

(dollars in millions, except per share amounts)

			As of and for Six Months Ended June 30, 2016			Year Ended December 31,
						2015			2014			2013			2012
GAAP Summary Income Statement Data
	Net earned premiums		$	397		$	766		$	570		$	752		$	853
	Net investment income		197			423			403			393			404
	Realized gains and other settlements on credit derivatives		32			(18		)	23			(42		)	(108		)
	Total expenses		375			776			463			466			822
	Income (loss) before income taxes		266			1,431			1,531			1,142			132
	Net income (loss)		205			1,056			1,088			808			110
	Net income (loss) per diluted share		1.51			7.08			6.26			4.30			0.57
GAAP Summary Balance Sheet Data
	Total investments and cash		$	10,905		$	11,358		$	11,459		$	10,969		$	11,223
	Total assets		14,092			14,544			14,919			16,285			17,240
	Unearned premium reserve		3,617			3,996			4,261			4,595			5,207
	Loss and LAE reserve		1,268			1,067			799			592			601
	Long-term debt		1,303			1,300			1,297			814			834
	Shareholders’ equity		6,250			6,063			5,758			5,115			4,994
	Shareholders’ equity per share		47.06			43.96			36.37			28.07			25.74
Other Financial Information (GAAP Basis)
	Net debt service outstanding (end of period)		$	488,362		$	536,341		$	609,622		$	690,535		$	780,356
	Gross debt service outstanding (end of period)		508,805			559,470			646,722			737,380			833,098
	Net par outstanding (end of period)		329,864			358,571			403,729			459,107			518,772
	Gross par outstanding (end of period)		342,888			373,192			426,705			487,895			550,908
Other Financial Information (Statutory Basis)(1)
	Net debt service outstanding (end of period)		$	450,045		$	502,331		$	583,598		$	663,797		$	756,044
	Gross debt service outstanding (end of period)		469,116			524,104			619,475			709,000			807,420
	Net par outstanding (end of period)		294,506			327,306			379,714			434,597			496,237
	Gross par outstanding (end of period)		306,229			340,662			401,552			461,845			527,126
Claims-paying resources
	Policyholders' surplus		$	4,707		$	4,550		$	4,142		$	3,202		$	3,579
	Contingency reserve		2,313			2,263			2,330			2,934			2,364
	Qualified statutory capital		7,020			6,813			6,472			6,136			5,943
	Unearned premium reserve		2,778			3,045			3,299			3,545			3,833
	Loss and LAE reserves		852			1,043			852			773			512
	Total policyholders' surplus and reserves		10,650			10,901			10,623			10,454			10,288
	Present value of installment premium		528			645			716			858			1,005
	CCS and standby line of credit		400			400			400			400			600
	Excess of loss reinsurance facility		360			360			450			435			435
	Total claims-paying resources		$	11,938		$	12,306		$	12,189		$	12,147		$	12,328
	Ratios:
		Net par outstanding to qualified statutory capital	42		:1	48		:1	59		:1	71		:1	83:1
		Capital ratio(2)	64		:1	74		:1	90		:1	108		:1	127:1
		Financial resources ratio(2)	38		:1	41		:1	48		:1	55		:1	61:1
Par and Debt Service Written
	Gross debt service written:
		Public finance - U.S.	$	11,103		$	25,832		$	20,804		$	15,559		$	25,252
		Public finance - non-U.S.	543			2,054			233			674			40
		Structured finance - U.S.	3			355			423			297			623
		Structured finance - non-U.S.	—			69			387			—			—
	Total gross debt service written		$	11,649		$	28,310		$	21,847		$	16,530		$	25,915
	Net debt service written		$	11,649		$	28,310		$	21,847		$	16,497		$	25,915
	Net par written		7,524			17,336			13,171			9,331			16,816
	Gross par written		7,524			17,336			13,171			9,350			16,816

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

2) See page 8 for additional detail on claims-paying resources.

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

Please refer to the Glossary for an explanation of the presentation of net debt service and net par outstanding and of the various sectors.

36

Assured Guaranty Ltd.

Summary of Non-GAAP Financial Measures (1 of 2)

(dollars in millions, except per share amounts)

	Six Months Ended June 30, 2016			Year Ended December 31,
				2015			2014			2013			2012
PVP:
Public finance - U.S.	$	64		$	124		$	128		$	116		$	166
Public finance - non-U.S.	14			27			7			18			1
Structured finance - U.S.	1			22			24			7			43
Structured finance - non-U.S.	—			6			9			—			—
Total PVP	79			179			168			141			210
Less: PVP of non-financial guaranty insurance	1			7			—			—			—
Less: Financial guaranty installment premium PVP	14			46			42			26			45
Plus: Installment GWP and other GAAP adjustments (1)	(9		)	55			(22		)	8			88
Total GWP	$	55		$	181		$	104		$	123		$	253
Operating income reconciliation:
Net income (loss)	$	205		$	1,056		$	1,088		$	808		$	110
Less pre-tax adjustments:
Realized gains (losses) on investments	(5		)	(37		)	(51		)	54			(7		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(28		)	505			687			(49		)	(672		)
Fair value gains (losses) on CCS	(27		)	27			(11		)	10			(18		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(19		)	(15		)	(21		)	(1		)	21
Effect of consolidating FG VIEs	12			25			235			296			95
Total pre-tax adjustments	(67		)	505			839			310			(581		)
Less tax effect on pre-tax adjustments	20			(148		)	(242		)	(111		)	156
Operating income	$	252		$	699		$	491		$	609		$	535
Operating income per diluted share reconciliation:
Net income (loss) per diluted share	$	1.51		$	7.08		$	6.26		$	4.30		$	0.57
Less pre-tax adjustments:
Realized gains (losses) on investments	(0.04		)	(0.25		)	(0.29		)	0.29			(0.04		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(0.21		)	3.39			3.95			(0.26		)	(3.53		)
Fair value gains (losses) on CCS	(0.20		)	0.18			(0.06		)	0.05			(0.09		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(0.14		)	(0.10		)	(0.12		)	(0.01		)	0.11
Effect of consolidating FG VIEs	0.09			0.17			1.35			1.58			0.50
Total pre-tax adjustments	(0.50		)	3.39			4.83			1.65			(3.05		)
Less tax effect on pre-tax adjustments	0.15			(1.00		)	(1.40		)	(0.60		)	0.81
Operating income per diluted share	$	1.86		$	4.69		$	2.83		$	3.25		$	2.81

1) Includes present value of new business on installment policies discounted at the prescribed GAAP discount rates, gross written premium adjustments on existing installment policies due to changes in assumptions, any cancellations of assumed reinsurance contracts, and other GAAP adjustments.

37

Assured Guaranty Ltd.

Summary of Non-GAAP Financial Measures (2 of 2)

(dollars in millions, except per share amounts)

	As of June 30, 2016			As of December 31,
				2015			2014			2013			2012
Adjusted book value reconciliation:
Shareholders' equity	$	6,250		$	6,063		$	5,758		$	5,115		$	4,994
Less pre-tax adjustments:
Effect of consolidating FG VIEs	(18		)	(35		)	(68		)	(265		)	(545		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(265		)	(241		)	(741		)	(1,447		)	(1,346		)
Fair value gains (losses) on CCS	35			62			35			46			35
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	598			376			534			208			664
Taxes	(111		)	(45		)	65			409			356
Operating shareholders' equity	6,011			5,946			5,933			6,164			5,830
Pre-tax adjustments:
Less: Deferred acquisition costs	110			114			121			124			116
Plus: Net present value of estimated net future credit derivative revenue	93			169			159			214			317
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,073			3,417			3,497			3,880			4,407
Taxes	(852		)	(979		)	(973		)	(1,101		)	(1,287		)
Adjusted book value	$	8,215		$	8,439		$	8,495		$	9,033		$	9,151
Adjusted book value per share reconciliation:
Shareholders' equity per share	$	47.06		$	43.96		$	36.37		$	28.07		$	25.74
Less pre-tax adjustments:
Effect of consolidating FG VIEs	(0.13		)	(0.25		)	(0.43		)	(1.45		)	(2.81		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(2.00		)	(1.75		)	(4.68		)	(7.94		)	(6.94		)
Fair value gains (losses) on CCS	0.26			0.45			0.22			0.25			0.18
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	4.50			2.73			3.37			1.14			3.42
Taxes	(0.83		)	(0.33		)	0.41			2.24			1.84
Operating shareholders' equity per share	45.26			43.11			37.48			33.83			30.05
Pre-tax adjustments:
Less: Deferred acquisition costs	0.83			0.83			0.76			0.68			0.60
Plus: Net present value of estimated net future credit derivative revenue	0.70			1.23			1.00			1.17			1.63
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	23.14			24.77			22.09			21.30			22.72
Taxes	(6.41		)	(7.10		)	(6.15		)	(6.04		)	(6.63		)
Adjusted book value per share	$	61.86		$	61.18		$	53.66		$	49.58		$	47.17

38

Glossary

Net Par Outstanding and Internal Ratings

Net par outstanding is insured par exposure, net of reinsurance cessions. Unless otherwise indicated, GAAP net par outstanding amounts exclude amounts related to securities the Company has purchased for loss mitigation purposes.

Internal Rating utilizes the Company’s ratings scale, which 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.

Statutory Net Par and Net Debt Service Outstanding. Under statutory accounting, net par and net debt service 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 United States (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).

Performance Indicators

The performance information described below is obtained from third parties and/or provided by the trustee and may be subject to revision as updated or additional information are obtained:

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. Some asset classes may not have subordinated tranches so they are excluded from the weighted averages.

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 the year ended December 31, 2015.

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.

39

Glossary (continued)

Sectors (continued)

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.

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 credit default swap 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 (TruPS). 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)are obligations backed by closed-end and open-end first and second lien mortgage loans on one-to-four family residential properties, including condominiums and cooperative apartments. First lien 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 Products Businessis how the Company refers to the guaranteed investment contracts (GICs) portion of a line of business previously conducted by Assured Guaranty Municipal Holdings Inc. (AGMH) that the Company did not acquire when it purchased AGMH in 2009 from Dexia SA and that is being run off. That line of business was comprised of AGMH's GICs business, its medium term notes business and the equity payment agreements associated with AGMH's leveraged lease business. Assured Guaranty is indemnified by Dexia SA and certain of its affiliates against loss from the former Financial Products Business.

40

Glossary (continued)

Sectors (continued)

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

Commercial Receivables Securitiesare obligations backed by equipment loans or leases, aircraft and aircraft engine 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.

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

Other Structured Finance Obligationsare 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 discloses both financial measures determined in accordance with accounting principles generally accepted in the United States of America (GAAP) and financial measures not determined in accordance with GAAP (non-GAAP financial measures).

Financial measures identified as non-GAAP should not be considered substitutes for GAAP financial measures. The primary limitation of non-GAAP financial measures is the potential lack of comparability to financial measures of other companies, which may define non-GAAP financial measures differently than Assured Guaranty.

Management and the Board of Directors use non-GAAP financial measures, as well as GAAP financial measures and other factors, to evaluate the Company’s results of operations, financial condition and progress towards long-term goals. By disclosing non-GAAP financial measures, the Company gives investors, analysts and financial news reporters access to some of the same information that management and the Board of Directors review internally. Assured Guaranty believes its 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.

Many investors, analysts and financial news reporters use operating shareholders’ equity as the principal financial measure for valuing AGL’s current share price or projected share price and also as the basis of their decision to recommend, buy or sell AGL’s common shares. Many of the Company’s fixed income investors also use operating shareholders’ equity to evaluate the Company’s capital adequacy. Many investors, analysts and financial news reporters also use adjusted book value to evaluate AGL’s share price and as the basis of their decision to recommend, buy or sell the AGL common shares. Operating income enables investors and analysts to evaluate the Company’s financial results as compared with the consensus analyst estimates distributed publicly by financial databases. Two non-GAAP financial measures, growth in adjusted book value per share and operating income, are key measures used to help determine compensation.

The following paragraphs define each non-GAAP financial measure disclosed by the Company and describe why it is useful. A reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure is presented within this financial supplement.

Operating Income: Management believes that operating income is a useful measure because it presents the results of operations of the Company with all financial guaranty contracts accounted for on a consistent basis and excludes fair value adjustments that are not expected to result in economic gain or loss, which clarifies the understanding of the underwriting results and financial condition of the Company. Operating income is defined as net income (loss) attributable to AGL, as reported under GAAP, adjusted for the following:

1)Elimination of 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.

2)Elimination of 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, this adjustment presents all financial guaranty contracts on a more consistent basis of accounting, whether or not they are subject to derivative accounting rules.

3)Elimination of 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 foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables and loss and LAE reserves represent the present value of future contractual or expected cash flows. 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. 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. This adjustment presents all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation.

6) Elimination of the tax effects related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

Operating Shareholders’ Equity: Management believes that operating shareholders’ equity is a useful measure because it presents the equity of the Company with all financial guaranty contracts accounted for on a consistent basis and excludes fair value adjustments that are not expected to result in economic gain or loss, which clarifies the understanding of the underwriting results and financial condition of the Company. 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:

42

Non-GAAP Financial Measures (continued)

Operating Shareholders’ Equity (continued):

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 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 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 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.

 5) Elimination of the tax asset or liability related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

Adjusted Book Value:Management uses adjusted book value to measure the intrinsic value of the Company, excluding franchise value. Growth in adjusted book value per share is one of the key financial measures used in determining the amount of certain long term compensation to management and employees and used by rating agencies and investors. 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 net of expected losses. Adjusted book value is operating shareholders’ equity, as defined above, further adjusted for the following:

1)Elimination of 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 net present value of estimated net future credit derivative revenue. See below.

3)Addition of the deferred premium revenue 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.

4) Elimination of the tax asset or liability related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

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.

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 AGL’s share price and as the basis of their decision to recommend, buy or sell the AGL common shares. Quarterly and year-to-date operating ROE are calculated on an annualized basis. Operating ROE is one of the key financial measures used in determining the amount of certain long-term compensation to management and employees and used by rating agencies and investors.

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.

43

Non-GAAP Financial Measures (continued)

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 written premiums 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 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. 

44

Assured Guaranty Ltd.    

30 Woodbourne Avenue

Hamilton HM 08

Bermuda

(441) 279-5705

www.assuredguaranty.com

Contacts:

Equity and Fixed Income Investors:

Robert Tucker

Senior 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

Andre Thomas

Managing Director, Equity Investor Relations

(212) 339-3551

athomas@assuredguaranty.com

Media:

Ashweeta Durani

Vice President, Corporate Communications

(212) 408-6042

adurani@assuredguaranty.com