Bermuda-based financial guarantor Assured Guaranty Ltd. posted a third-quarter loss after a decline in the value of insured securities backed by home loans.

The net loss narrowed to $63.3 million, or 70 cents a share, from $115 million, or $1.70 cents a share, a year earlier, the company said yesterday.

Excluding adjustments, Assured said it had profit of 28 cents a share, compared with the average estimate of eight analysts surveyed by Bloomberg for profit of 50 cents a share.

The earnings statement came after the markets closed. Assured's share price dipped $1.17 (11.7 percent) to $8.80 in New York trading yesterday.

"Market volatility, economic conditions and Moody's review for possible downgrade of Assured's ratings clearly presented us with many challenges this quarter," said Assured's chief executive officer Dominic Frederico

"Our new business production as well as our operating income was reasonable in light of these challenges.

"While Assured's loss and loss adjustment expenses for US RMBS (residential mortgage backed securities) have increased this quarter, we continue to believe that Assured's lack of exposure to collateralised debt obligations of asset-backed securities and our non-participation in the guaranteed investment contract business will protect our balance sheet from the liquidity risks and significant credit losses experienced by many other financial institutions." Assured, which has been backed by billionaire investor Wilbur Ross, is one of few in the financial guaranty market to have hung onto its triple-A credit ratings. As a result, its share of the municipal bond insurance market has grown rapidly this year.

Assured's third-quarter gross premiums rose 65 percent, compared to the same three months last year.

Net earned premiums increased 122 percent to $85.5 million from third quarter 2007.

The growth in net earned premiums was generated by a 91 percent increase in net premiums earned in the financial guaranty direct segment and a 166 percent increase in net premiums earned in the financial guaranty reinsurance segment.

Total expenses rocketed 225 percent, however, to $129.3 million compared to $39.8 million in 2007, largely due to an $80.5 million increase in pre-tax loss and loss adjustment expenses from third quarter 2007.