Good day, ladies and gentlemen, and welcome to the second quarter 2008 Assured Guaranty earnings conference call. My name is Akiya and I will be your operator for today. At this time all participants are in a listen-only mode. We will conduct a question-and-answer session toward the end of the conference. (Operator instructions) I would now like to turn the presentation over to your host for today’s call Ms. Sabra Purtill, Managing Director of Investor Relations. Please proceed, ma’am.

Thank you, Akiya, and thank you all for joining us today for Assured Guaranty’s second quarter 2008 earnings conference call. Our speakers today are Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Limited and Bob Mills, Chief Financial Officer. After their prepared remarks, they will take questions from the audience. Please note that our call is not web-enabled for Q&A, so please dial in to the telephone connection of this call if you would like to ask a question. I would like to draw your attention to a new disclosure that we have made this quarter that provides investors with much greater transparency on our structured finance disclosures and transactions. We stated in our press release that we have posted late night on our website a 21-page list that compiles all the U.S. and international structured finance transactions underwritten by our financial guaranty direct segment that are currently in force and which are not covered by confidentiality agreement. That’s about 680 transactions. There are only a few transactions that cannot be disclosed due to confidentiality agreements, but the par insured amount of those transactions is de minimis, less than 1% of the portfolio. The list includes transaction name and CUSIP, net par outstanding, internal rating, and asset class. We have also provided a note section, which provides additional information on credit enhancement on those transactions that may be outside of the original transaction. We believe this disclosure will provide investors with the means to look up our exposures on Bloomberg or any other public data source thereby providing you with a very timely data source for your analysis and also as a basis for specific questions to our Investor Relations team on those exposures. Please note that we will update the ratings, par, and new transactions on a…

Thank you, Sabra, and thanks to all of you on the call and webcast for your interest in Assured. I’d like to cover a few highlights of our quarterly results and the credit performance of our portfolio before further discussing the recent Moody’s announcement. Our second quarter results were very strong especially considering the challenging in the credit markets. First of all, we generated an operating profit as contrasted with continued credit losses at many other companies. On a very positive note, we have record new business production in our financial guaranty direct segment for the second quarter in a row. We continue to build on our U.S. public finance franchise, achieving 35% market share in the quarter. Our other two direct markets were more affected by the lack of new issuance, but the secondary market activity in these areas helped us grow our U.S. structured finance production by 4% over second quarter 2007, a good result considering market conditions. The strong business production we experienced in the quarter added more than $200 million to our store of future earnings. So we now have more than $2.7 billion of estimated net future premium income, up 66% over the last year, and now stands at roughly 1.16 times our GAAP equity, excluding unrealized losses on credit derivatives. We have always said that building our earnings and ROE depended on layering [ph] on more years of new business as we were a new entrant to the direct business and many of our competitor had the benefit on their books of business dating back 20 years or more. Our current ratio, 1.16 times, now exceeds that level that Ambac and MBIA were at in 2005 and 2006 when they were producing consistent ROEs in ranges of 12% to 15%. Our results should benefit…

Thanks Dominic, and good morning to everyone. I would like to cover some brief highlights of the quarter. Please refer to our press release and financial supplement for further details on our financial position and results of operation. Operating income, which we calculate as net income excluding after-tax realized gains and losses on investments and after-tax unrealized gains and losses on credit derivatives, for the second quarter was $38.7 million, or $0.42 per diluted share, compared to $46.7 million, or $0.68 per diluted share for the second quarter in 2007. Our operating income is consistent with the pre-announcement we made on July 21st of 2008. As Dominic mentioned, the principal reason for the decline in operating income was that we established pre-tax loss reserves on U.S. RMBS exposures written in either insurance or credit derivative form of $39.7 m`, or $0.33 after-tax per diluted share in loss and loss adjustment expenses incurred. These reserves were largely due to the reserve on one closed end second lien transaction, American Home 0703, in our direct segment. The net impact of this case reserve was a $23.7 million pre-tax loss expense in second quarter 2008, or $0.18 per diluted share after-tax. Our PVP, our present value of gross written premiums for insurance and credit derivatives, totaled $278.9 million for the quarter, up 123%, compared to $125.3 million for the second quarter 2007. The principal driver of growth compared to the prior year was in U.S. public finance, which was $183.2 million for the second quarter 2008, compared to $15.4 million for the second quarter 2007. Reinsurance PVP was $37.5 million, up from $21.3 million in the second quarter 2007, reflecting stable production in our traditional business and about $15 million of PVP from a facultative portfolio transaction with PMI Guaranty. Net earned premiums…

(Operator instructions) Your first question is from the line of Darin Arita of Deutsche Bank. Please proceed. Darin Arita – Deutsche Bank Securities: Hi good morning.

Good morning, Darin. Darin Arita – Deutsche Bank Securities: Hi, can you – actually Dominic your introduction there was actually very helpful in talking about the situation with this – the rating agencies. But can you talk a little bit more about your discussions that have occurred over the past two weeks at Moody’s and the other rating agencies?

Sure. Obviously most of the dialog is to do with Moody’s as you can well expect and as recently as last Tuesday we had a meeting at senior levels there and the whole issue that we obviously are trying to understand is how did this happen? Basically, as we see it, the issues that they continue to refer to are really future-looking statements are things about what could possibly happen. Obviously, it would have been our belief that the model that they use to calculate tail logs as in structured portfolio at the AAA level, we have included those kinds of variations or variabilities and potential economic outcome and market outcome and there fore we are confused by that. Number two, as we have talked about the process and the process being if you have got issues you would hope that they would have been identified. And it seems that they had a clear path in the prior periods as they dealt with other companies in the financial guaranty space in terms of identifying an issue, giving us set amount of time relative to response of the issue and then obviously drawing a rate conclusion at the end of both the time and the potential solutions. And we obviously were given none of that benefit. So our first concern and foremost was we really are upset by the process and you need to explain how this is part of your process. And then number two, you’ve got to provide us the specifics. We can all talk about the disaster that might be around the corner. That’s like saying none of us would leave our houses because we are afraid we are get hit by a bus if we step off the kerb. Well that’s not reality. So we need to…

We had a further meeting or phone call with them on Monday where they asked for a lot of information relative to single name overlap in the pooled corporate overall accumulations in any specific asset class. They asked us to give them things like our correlation assumptions that we use on our portfolio. They wanted to look at our top 200 risks and the 200 risk I think is down to about $150 million of net par outstanding. So it’s a pretty low level of detail. So right now, we are obviously cutting down a few forests to provide them all the information that they just recently requested. But once again, frustration on our part, this is information that they have, they always have had. They have had the ability to look at this thing since we were upgraded to AAA last year. There really hasn’t been a seismic shift in the portfolio. If anything, with the current influx of public finance business over the last two quarters, you can see kind of the overall percentages of total portfolio exposed to any given asset class is coming down. So for us it’s all positive news, not negative news. And as we said, we continue to maintain strong operating performance and they are fully aware of the risks that are in the portfolio. Darin Arita – Deutsche Bank Securities: And to the extent despite your best efforts Moody’s downgrades Assured Guaranty to AA, what would be the strategy there?

Well, I don’t think the strategy changes whatsoever. I think as we look at today and as we talked about the executions that we are still able to complete, the market needs the benefit of our industry and how they secure the financing and get product distribution and support for credit needs across many different borrowers and issuers. There is a part of me that says, and of course I am going to be the optimist because I have go to defend our industry and our Company, that we will just trade through whatever issue they’ve put forward because I think the market has its own understanding and appreciation of what we provide. As we talked about it in the early remarks, we did lose some business to the open market uninsured and we were calculating what was the additional interest cost that they wind up paying because of that, and it’s significant. So there is a real problem that A, they are going hurt long-term liquidity or short-term liquidity, and two, they are going to make everything more expensive at a time when, if anything, efficiency is the definite need of the day. So, this doesn’t help. I think the market will understand that and they will trade right through it. Darin Arita – Deutsche Bank Securities: Alright, great. Thanks very much.

You are welcome.

(Operator instructions) Your next question comes from the line of Joseph Timeran [ph] from Piper Jaffray. Please proceed. Joseph Timeran – Piper Jaffray: Good morning.

Good morning. How are you doing? Joseph Timeran – Piper Jaffray: Good. Could you provide a little more detail on how the Closely Monitored Credit list has changed during the quarter, but – I mean I could see it a little bit but I don’t know if it’s changed within categories, if you’ve moved them between fundamentally sound credits or closely monitored credits. Is there anymore details on that?

There were some – Bob, you want to add?

Yeah, the – I mean during the quarter the – as we said, the overall growth in the CMC list was only $77 million. There was some movement within -- level two actually went down and level three increased as there was movement between those categories during the quarter. It was partially associated with the second lien that we had talked about, the closed end second we report – the reserve that was probably the biggest movement that took place during the quarter.

In most cases the movement from two to three represents the fact that we were carrying a portfolio reserve on those transactions, principally in our reinsurance book and in the most recent quarter on the reinsurance quarter as we got revised the case losses. So in our methodology in term of how the Closely Monitored Credit list works, that moves from two to three.

There were four—in the reinsurance book there were four different credits that went from category two to category three that were home equity loans and that made up most of the difference beyond the one American Home credit. Joseph Timeran – Piper Jaffray: Okay. Thank you. That’s helpful. And then in your international book, I was wondering if you can provide some color on business there and specifically how Moody’s announcement has affected anything overseas.

Well, obviously we think the announcement has impacted – cut [ph] off the entire market and that’s part of the frustration, and that we feel. In terms of international, much like the U.S. market, you really have a total absence of liquidity. There is no one out there really looking to invest and therefore you are not seeing a lot of new deals coming to market. There have been a couple of restructured deals that we were able to execute in the current quarter. We were basically doing re-packs or on-balance sheet type of risk mitigations, but as you look forward, getting to the question of what business does it impact, obviously the PFI business international, which we had really start to get a lot of activity and enquiries on, that’s going to be hurt by both liquidity and the current Moody’s concern. I think the market is going to step back, let this kind of hysteria work its way through, and then make ultimately their value judgments and we’ll see that business probably come back later on in the year, not early next year, but I think we’ve got an adjustment period that we are all going to have to suffer through because of the uncertainty. Joseph Timeran – Piper Jaffray: Thank you.

You are welcome.

And your next question is from the line of Brian Meridus [ph] of UBS. Please proceed. Brian Meridus – UBS: Hey, Dominic, how are you?

Good, Brian, how are you? Brian Meridus – UBS: Good. Just a quick question, on the secondary market transactions you were doing in the quarter, was there any deterioration as far as what you are able to – the returns you are getting on this business versus obviously in the first quarter, and where they kind of – what was pricing like? Was it pricing at a AA or a AAA, was there any differences in spreads you are receiving on it?

On the structured credit, absolutely not. Obviously, those deals were really providing tremendous assistance in how we get those done. So we stay very strong in terms of both pricing discipline and credit discipline and those deals come with significant subordination and in most cases in the true structure, say the non-ABS side, they were all pre – or the – in the ABS side they were all pre-wrapped. So there are wraps on wraps. On the non-ABS side, more the CDO, CLO side, those things came with significant subordination and strong pricing. Where pricing is an issue, being totally honest and disclosing, is in the public finance market where we really believe it’s in our best interest to keep up activity and issuance and obviously providing insured support on that. So there we have seen a deterioration in pricing that we hope is going to be temporary, but if you really compare pricing levels, obviously we had a current market in the first two quarters that was extremely beneficial from a pricing -- so this kind of brings us back to kind of pre- new market pricing, but I think it’s short term and it’s what we think we’ve had to do to respond to the Moody’s disruption and yet still provide kind of ongoing activity in the wrapped paper public finance market, which we view as critical. Brian Meridus – UBS: Great. Thank you.

You are welcome.

There are no further questions at this time. I would now like to turn the presentation back to over to Ms. Sabra Purtill. Please proceed, ma’am.

Thank you. Thank you, Akiya, and thanks to all of you for joining us today. I know it’s a busy day with a lot of earnings announcements out there. So please feel free to give myself or Ross Aron a call with any follow-up questions, in addition, Mike Walker and Jason Falzon of our Fixed Income Investor Relations team in New York. We look forward to receiving your calls and answering your questions and wish you a good day.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and have a wonderful day.