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Assured records $57m loss

Assured Guaranty Ltd posted a net loss of $57.7 million for the second quarter but saw its book value per share rise by 3.7 percent during the first half of the year.

The Bermuda-based bond insurer said operating earnings were $136.3 million, compared with $172 million in the same period of 2010, and the net loss was driven by a fall in the fair value of consolidated financial guaranty variable interest entities and credit derivatives.

“I am pleased with the progress we made in the second quarter,” said Dominic Frederico, president and chief executive officer of Assured Guaranty. “We reported strong operating earnings for the quarter, which contributed to a year-over-year operating income increase of 35.3 percent. Additionally, during the quarter, we originated 32 percent more municipal PVP than in the first quarter of 2011, we reached an important agreement with Bank of America regarding representation and warranty claims, and we further improved our capital position by executing our plan of strategic terminations and continued purchases of securities we’ve insured.”

PVP measures the present value of new business production. Second-quarter PVP was down 42 percent year over year, as US municipal bond issuance fell 32 percent.

Mr Frederico noted that Assured insured 12.1 percent of municipal bond issuances in the second quarter, represneting an improvement in market share over each of the previous two quarters.

“We view this level of activity as a good result given the continued uncertainty caused by Standard & Poor’s Ratings Services’ proposed ratings criteria changes and the global economic pressures experienced by the capital markets.

“Additionally, while most of our recent new business originations have been in the municipal market, we are seeing growing opportunities in the international and structured finance markets.”

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Published August 10, 2011 at 2:00 am (Updated August 10, 2011 at 10:40 am)

Assured records $57m loss

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