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Assured Guaranty beats estimates

Assured Guaranty CEO Dominic Frederico

Bermuda-based municipal bond insurer Assured Guaranty posted net income of $201 million for the first quarter and topped Wall Street estimates.

The company’s board also authorised a new $400 million share repurchase programme, as its adjusted book value reached a record high.

“Our first quarter provided an excellent start for 2015,” Assured’s chief executive officer Dominic Frederico said.

“Adjusted book value per share, our key measure of the company’s intrinsic value, reached an all-time high. In US public finance, where we saw the highest municipal bond insurance penetration in years, Assured Guaranty led the industry in terms of par and the number of transactions insured, and we outpaced our competitors by an even wider margin in PVP.

“We also saw the benefit of our diversified business strategy, with solid PVP production in structured finance.”

During the quarter, the company completed the acquisition of Radian Asset and spent $152 million buying back its own shares.

“Additionally, as of May 4, 2015, we completed substantially all of the $400 million of share repurchases authorised in August 2014,” Mr Frederico added. “This week our board authorised an additional $400 million of share repurchases.”

Operating income was $140 million, or 89 cents per share, for first quarter, trouncing the 60 cents per share consensus forecast of analysts tracked by Yahoo Finance.

The earnings statement briefly mentioned a loss relating to the company’s insuring of Puerto Rico debt.

“Economic loss development in first quarter 2015 was a benefit of $3 million, which was driven primarily by improvements in student loan and trust preferred securities transactions, offset in part by loss development in certain Puerto Rico exposures,” the statement read.

Assured ended the quarter with shareholders’ equity of $5.79 billion.