Profits increased $4.1 million in the first quarter for Assured Guaranty to $39 million, a 12 percent improvement year-on-year and just above analysts’ expectations.

Favourable credit experience despite the trouble in the US sub-prime market was part of the success story for the Bermuda-based company, along with securing new business as evident by a jump in gross premiums written from $55.4m in the first three months of 2006 to $72.5m this year.

“We continued our track record of success during the quarter,” said Dominic Frederico, president and chief executive officer of Assured Guaranty.

“We generated strong new business production in both of our financial guaranty franchises and had favourable credit experience despite concerns about the sub-prime RMBS market. We were also pleased that during the quarter Moody’s placed Assured Guaranty Corporation under review for possible upgrade to ‘Aaa’, which is a long-standing strategic goal and will have a meaningful impact on our business development.”

The first quarter profits equate to 57 cents a share, compared to the 47 cents a share for the same period a year ago. This was also higher than the 55 cents per-share profit expected by analysts polled by Thomson Financial.

Revenue in the three months of 2007 rose to $85.4 million from $74.3 million in the comparable period last year, while net written premiums rose 35 percent to $68.4 million from $50.8 million.