ASSURED GUARANTY LTD
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 7, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Investment Portfolio
As of June 30, 2026, the Company had $6,817 million of available-for-sale fixed-maturity securities, of which $6,112 million were managed by four investment managers: three for the financial guaranty subsidiaries and one for the annuity reinsurance subsidiary. The Company’s principal objectives in managing its investment portfolio for the financial guaranty subsidiaries 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. The Company’s principal objectives in managing its investment portfolio for the annuity reinsurance subsidiary are to invest in assets with a close cashflow profile to the expected profile of payments of the subsidiary and to be appropriately duration matched against the subsidiary’s liability cashflows. In accordance with their respective investment guidelines, the Company’s investment managers for the financial guaranty subsidiaries are also required to 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. The Company’s annuity reinsurance subsidiary seeks to maintain an investment grade overall credit quality for its investment portfolios.
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 9. Investments, and Note 11. Fair Value Measurement.
Carrying Value
| As of | ||
|---|---|---|
| June 30, 2026 | December 31, 2025 | |
| (in millions) | ||
| Fixed-maturity securities, available-for-sale | $6,817 | $6,369 |
| Fixed-maturity securities, trading (1) | 131 | 124 |
| Short-term investments | 792 | 903 |
| Other invested assets (2) | 1,190 | 1,091 |
| Total (3) | $8,930 | $8,487 |
(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 were consolidated and reported in “assets of consolidated investment vehicles” as of December 31, 2025. See Item 1. Financial Statements, Note 10. Variable Interest Entities. The June 30, 2026 balance includes loans issued by a U.K. regulated utility and a U.S. infrastructure project to which the Company has insured exposure.
(3) June 30, 2026 includes $612 million related to annuity reinsurance consisting of $605 million of available-for-sale fixed-maturity securities and $7 million of short-term investments.
The Company’s available-for-sale fixed-maturity securities had a duration of 5.5 years and 4.9 years as of June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, based on fair value. 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 9. Investments, for additional information.
Distribution of Available-for-Sale Fixed-Maturity Securities by Rating
| As of | ||
|---|---|---|
| Rating | June 30, 2026 | December 31, 2025 |
| AAA | 13.6% | 13.3% |
| AA | 32.8 | 34.6 |
| A | 27.7 | 26.1 |
| BBB | 18.5 | 17.4 |
| BIG | 4.4 | 4.7 |
| Not rated | 3.0 | 3.9 |
| Total | 100.0% | 100.0% |
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. See “— Commitments” below.
Sound Point and Alternative Investments
| As of June 30, 2026 (1) · As of December 31, 2025 | ||||||
|---|---|---|---|---|---|---|
| Investments | CIVs (2) | Consolidated | Investments | CIVs | Consolidated | |
| (in millions) | ||||||
| Fixed-maturity securities, available-for-sale | $243 | $— | $243 | $282 | $— | $282 |
| Fixed-maturity securities, trading | 4 | — | 4 | 10 | — | 10 |
| Other invested assets: | ||||||
| Ownership interest in Sound Point | 398 | — | 398 | 415 | — | 415 |
| CLOs | 48 | — | 48 | 85 | — | 85 |
| Private healthcare investing | 206 | — | 206 | 187 | — | 187 |
| Asset-based/specialty finance | 114 | — | 114 | 184 | (57) | 127 |
| Private minority stakes in alternative asset manager | 110 | — | 110 | 95 | — | 95 |
| Commercial real estate finance | 101 | — | 101 | 81 | — | 81 |
| Other | 102 | — | 102 | 101 | — | 101 |
| Subtotal | $1,326 | $— | $1,326 | $1,440 | $(57) | $1,383 |
| Assets of CIVs, net of non-redeemable noncontrolling interest | $— | $— | $— | $— | $77 | $77 |
(1) The alternative investments, which do not include the Company’s ownership interest in Sound Point, had an inception-to-date annualized internal rate of return of 12%.
(2) During six months 2026, the Company deconsolidated a CIV related to its investments in a fund managed by Sound Point. As of June 30, 2026, the Company did not consolidate any CIVs.
Effect of Ownership Interest in Sound Point and Alternative Investments
on Condensed Consolidated Statements of Operations
| Second Quarter 2026 | Second Quarter 2025 | |||||
|---|---|---|---|---|---|---|
| Investments | CIVs | Consolidated | Investments | CIVs | Consolidated | |
| (in millions) | ||||||
| Net investment income | $9 | $— | $9 | $11 | $— | $11 |
| Net realized investment gains (losses) | (7) | — | (7) | (7) | — | (7) |
| Fair value gains (losses) on trading securities | — | — | — | — | — | — |
| Equity in earnings (losses) of investees: | ||||||
| Ownership interest in Sound Point | (5) | — | (5) | (1) | — | (1) |
| Alternative investments: | ||||||
| CLOs | (19) | — | (19) | (5) | — | (5) |
| Private healthcare investing | 3 | — | 3 | 1 | — | 1 |
| Asset-based/specialty finance | 5 | — | 5 | 5 | (1) | 4 |
| Private minority stakes in alternative asset manager | 2 | — | 2 | 1 | — | 1 |
| Commercial real estate finance | 2 | — | 2 | — | — | — |
| Other | 1 | — | 1 | 3 | — | 3 |
| Equity in earnings (losses) of investees | (11) | — | (11) | 4 | (1) | 3 |
| Subtotal | $(9) | $— | $(9) | $8 | $(1) | $7 |
| Fair value gains (losses) on CIVs, net of non-redeemable NCI | $— | $— | $— | $— | $1 | $1 |
| Six Months 2026 | Six Months 2025 | |||||
|---|---|---|---|---|---|---|
| Investments | CIVs | Consolidated | Investments | CIVs | Consolidated | |
| (in millions) | ||||||
| Net investment income | $19 | $— | $19 | $23 | $— | $23 |
| Net realized investment gains (losses) | (21) | — | (21) | (7) | — | (7) |
| Fair value gains (losses) on trading securities | — | — | — | 1 | — | 1 |
| Equity in earnings (losses) of investees: | ||||||
| Ownership interest in Sound Point | 1 | — | 1 | 12 | — | 12 |
| Alternative investments: | ||||||
| CLOs | (30) | — | (30) | 3 | — | 3 |
| Private healthcare investing | 18 | — | 18 | 13 | — | 13 |
| Asset-based/specialty finance | 11 | (2) | 9 | 14 | (7) | 7 |
| Private minority stakes in alternative asset manager | 16 | — | 16 | 15 | — | 15 |
| Commercial real estate finance | 3 | — | 3 | — | — | — |
| Other | 3 | — | 3 | 6 | — | 6 |
| Equity in earnings (losses) of investees | 22 | (2) | 20 | 63 | (7) | 56 |
| Subtotal | $20 | $(2) | $18 | $80 | $(7) | $73 |
| Fair value gains (losses) on CIVs, net of non-redeemable NCI | $— | $6 | $6 | $— | $11 | $11 |
Commitments
The Company has agreed to invest an aggregate amount of $1.4 billion in alternative investments, which includes $1 billion in Sound Point managed investments, subject to certain conditions precedent. Unfunded commitments for alternative investments as of June 30, 2026 were $480 million. See Item 1. Financial Statements, Note 9. Investments, 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 $73 million and $77 million as of June 30, 2026 and December 31, 2025, respectively. The total collateral funded into a reinsurance trust or a similar account by certain AGL subsidiaries or otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements had a fair value of $796 million and $813 million as of June 30, 2026 and December 31, 2025, respectively.
Fixed-maturity securities of $583 million, short-term investments of $3 million and cash of $7 million are held in a consolidated VIE supporting the PRT block of business. See Item 1. Financial Statements, Note 10. Variable Interest Entities. The use of the VIE’s assets is restricted based on the terms of the PRT reinsurance agreement. Total above includes $7 million of fixed-maturity securities that were pledged as collateral for derivatives.
Funds Withheld
The following table summarizes the underlying investments within the Company’s funds withheld. See Item 1. Financial Statements, Note 7. Annuity Reinsurance, for additional information.
Components of Underlying Assets in
Funds Withheld
| As of June 30, 2026 | |
|---|---|
| (in millions) | |
| RMBS | $59 |
| Commercial mortgage-backed securities | 101 |
| Asset-backed securities | 66 |
| Commercial loans | 21 |
| Total investments | 247 |
| Cash, cash equivalents and short-term investments | 67 |
| Other | (18) |
| Total funds withheld, net of allowance for credit losses | $296 |
The following table summarizes the components of the change in funds withheld, which is reported in “fair value gains (losses) on derivatives” in the condensed consolidated statements of operations.
Change in Fair Value of Embedded Derivatives
in Funds Withheld
| Second Quarter | Six Months | |
|---|---|---|
| 2026 | 2026 | |
| (in millions) | ||
| Net investment income on funds withheld | $4 | $9 |
| Net realized investment gains (losses) on funds withheld | — | (1) |
| Net unrealized investment gains (losses) on funds withheld | — | (1) |
| Total change in funds withheld | $4 | $7 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.