ASSURED GUARANTY LTD

The Company’s principal objectives in managing its investment portfolio are to support the highest possible ratings for each operating company, manage investment risk within the context of the underlying portfolio of insurance risk, maintain sufficient liquidity to cover unexpected stress in the insurance portfolio, and maximize after-tax net investment income. As of March 31, 2025, the Company had $6,415 million of available-for-sale fixed-maturity securities, of which $5,443 million were managed by three investment managers who are required to, in accordance with the Company’s investment guidelines, maintain their portion of the Company’s investment portfolio with an overall credit quality rated at a minimum of A+/A1/A+ by S&P/Moody’s/Fitch Ratings Inc. In addition, $240 million of available-for-sale fixed-maturity securities were CLO equity tranches managed by Sound Point.

Changes in interest rates affect the value of the Company’s fixed-maturity securities. As interest rates fall, the fair value of fixed-maturity securities generally increases and, as interest rates rise, the fair value of fixed-maturity securities generally decreases. The Company’s portfolio of fixed-maturity securities primarily consists of investment-grade, liquid instruments. Other invested assets include other alternative investments, which are generally less liquid. For more information about the investment portfolio and a detailed description of the Company’s valuation of investments, see Item 1, Financial Statements, Note 7, Investments, and Note 9, Fair Value Measurement.

Carrying Value

(1) Includes primarily CVIs received as part of resolutions of Puerto Rico exposures in 2022, which are not rated.

(2) Excludes investments in Sound Point funds that are consolidated. See Item 1, Financial Statements, Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

The Company’s available-for-sale fixed-maturity securities had a duration of 4.5 years and 4.3 years as of March 31, 2025 and December 31, 2024, respectively.

Available-for-Sale Fixed-Maturity Securities By Rating

The following table summarizes the ratings distributions of the Company’s available-for-sale fixed-maturity securities as of March 31, 2025 and December 31, 2024. Ratings generally reflect the lower of Moody’s and S&P classifications, except for (i) Loss Mitigation Securities rated BIG, and (ii) CLO equity tranches, which are not rated. See Item 1, Financial Statements, Note 7, Investments, for additional information.

Distribution of Available-for-Sale Fixed-Maturity Securities by Rating

Other Investments

Other invested assets, which are generally less liquid than fixed-maturity securities, primarily consist of the ownership interest in Sound Point and alternative investments across a variety of strategies.

The Insurance segment reports the Company’s percentage ownership of Sound Point funds and AHP funds as equity method investments with changes in net asset value included in the Insurance segment adjusted operating income. As of March 31, 2025 and December 31, 2024, one active fund in which the Company invests was accounted for as a CIV and the majority are accounted as equity method investments in the Company’s condensed consolidated financial statements. See “— Commitments” below.

Ownership Interest in Sound Point and Alternative Investments

(1) The alternative investments, excluding the ownership interest in Sound Point, had an inception-to-date annualized internal rate of return of 13%.

Ownership Interest in Sound Point and Alternative Investments

Income from Ownership Interest in Sound Point and Alternative Investments

(1) Includes CLO equity tranches distributed from a CLO fund in the fourth quarter of 2024.

Income from Ownership Interest in Sound Point and Alternative Investments

Commitments

The Company has agreed to invest an aggregate amount of $1.5 billion in alternative investments, including $1 billion in Sound Point managed investments. Unfunded commitments for alternative investments as of March 31, 2025 were $608 million. See Item 1, Financial Statements, Note 1, Business and Basis of Presentation, for a description of the alternative investments agreement with Sound Point.

Restricted Assets

Based on fair value, fixed-maturity securities, short-term investments and cash that are either held in trust for the benefit of third-party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements or otherwise pledged or restricted totaled $82 million as of March 31, 2025 and $79 million December 31, 2024. The investment portfolio also contains securities that are held in trust by certain AGL subsidiaries or are otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements with a fair value of $1,079 million and $1,135 million as of March 31, 2025 and December 31, 2024, respectively.