Good morning, and welcome to the Assured Guaranty Ltd. Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Becky, and I will be the operator for the call today. All participants will be in a listen-only mode. Should you need any assistance, signal a conference specialist by pressing star then 0 on your telephone keypad. During today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to our host, Robert S. Tucker, Senior Managing Director, Investor Relations and Corporate Communications. Please go ahead. Thank you, operator, and thank you all for joining Assured Guaranty Ltd. for our full year and fourth quarter 2025 financial results conference call.

Today's presentation is made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The presentation may contain forward-looking statements about our new business and credit market conditions, credit spreads, financial ratings, loss reserves, financial results, and other items that may affect our future results. These statements are subject to change due to new information or future events. Therefore, you should not place undue reliance on them as we do not undertake any obligation to publicly update or revise them except as required by law. If you are listening to a replay of this call, or if you are reading the transcript of the call, please note that our statements made today may have been updated since this call. Please refer to the Investor Information section of our website for our most recent presentations and SEC filings, most current financial filings, and for the risk factors. The presentation also includes references to non-GAAP financial measures. We present the GAAP financial measures most directly comparable to the non-GAAP financial measures referenced in this presentation along with a reconciliation between such GAAP and non-GAAP financial measures in our current financial supplement and equity investor presentation, which are on our website at assuredguaranty.com. Turning to the presentation, our speakers today are Dominic John Frederico, President and Chief Executive Officer of Assured Guaranty Ltd., Robert Adam Bailenson, our Chief Operating Officer, and Benjamin G. Rosenblum, our Chief Financial Officer. After their remarks, we will open the call to your questions. As the webcast is not enabled for Q&A, please dial into the call if you would like to ask a question. I will now turn the call over to Dominic.

Thank you, Robert, and welcome to everyone joining today's call. We significantly advanced Assured Guaranty Ltd.’s key business strategies in 2025, positioning us for sustainable long-term growth. Among this year's most important accomplishments, we again brought our key shareholder value metrics at year-end 2025 to new per-share highs of $186.43 for adjusted book value, $126.78 for adjusted operating shareholders' equity, and $125.32 for shareholders' equity. We earned adjusted operating income per share of $9.80 compared with $7.10 in 2024 and created significant future earnings from financial guarantee originations. Our present value of new business production, or PVP, totaled $286 million with meaningful contributions from each of our three financial guarantee underwriting groups. We continue to be the leader in the new issue market for U.S. municipal bond insurance. In our strategic efforts to expand our U.S. municipal secondary market business, we saw great success as we more than tripled our secondary market par insured over last year's performance. Rob will provide details on our financial guarantee production in a few minutes. In our capital management program, we repurchased 12% of the common shares that were outstanding on 12/31/2024 while meeting our 2025 target of repurchasing $500 million of our shares. We also distributed $69 million to shareholders through dividends, and last week, we announced that we have increased our current quarterly dividend per share by 12% compared to November 2025, representing fourteen years in a row of dividend growth. Our alternative investments continue to perform well, including funds managed by Sound Point Capital Management and Assured Healthcare Partners. Alternative investments have provided an annualized, inception-to-date internal rate of return of 13% through year-end 2025. As we mentioned on prior calls, we successfully defended our legal rights in litigation with Lehman Brothers International, resulting in a pretax gain of approximately $103…

Thank you, Dominic. In 2025, we generated $286 million of PVP from transactions that, in aggregate, were of higher credit quality than in recent years. Municipal bond insurance remained in strong demand during 2025, as the U.S. municipal market experienced the second consecutive year of record issuance. In U.S. public finance, we originated $206 million in PVP, finishing the second half of the year strongly with $132 million in PVP, a 19% increase over the second half of 2024. In looking at 2025, PVP was limited by the mix of business that came to market, which resulted in our insuring fewer large transactions in the BBB category than in 2024. As a result, municipal par we insured was weighted more heavily toward higher credit-quality transactions with lower capital charges, and these higher-rated deals produce less premium. Overall, we guaranteed over $27 billion of municipal par, 16% more than in 2024, across more than 1,500 primary and secondary market policies. For insured new-issue municipal par sold in 2025, Assured Guaranty Ltd. achieved a fifteen-year high, wrapping more than $25 billion and leading the bond insurance industry with 58% of new-issue insured par sold. Our new-issue deal count grew 15% year-over-year to more than 900 transactions. Perhaps most notably, we increased our U.S. public finance secondary insured par written more than 240% year-over-year to approximately $2 billion, which generated $44 million of PVP. With over $4 trillion of municipal bonds outstanding, we are excited about the opportunity available in bonds we can insure in the secondary market. We have made several technological and operational process improvements over a multiyear investment period to greatly enhance the secondary market team's ability to source, evaluate, and execute transactions. Modernization of our platforms, including deployment of new market analysis tools and applications and real-time data integration,…

I am pleased to report fourth quarter 2025 adjusted operating income of $109 million, or $2.32 per share, representing an increase of 83% on a per-share basis from adjusted operating income of $66 million, or $1.27 per share, in 2024. Our full-year 2025 adjusted operating income was $445 million, or $9.08 per share, representing an increase of 28% on a per-share basis from $389 million, or $7.10 per share, in 2024. The largest drivers of the quarter-over-quarter increase were a $23 million pretax gain associated with a loss mitigation strategy, higher earnings from alternative investments, and lower loss expense. Full-year results in 2025 also benefited from a $103 million gain related to the resolution of the Lehman litigation, $15 million in fees related to workout credits, and a $20 million increase in the pretax contribution from the asset management segment. As you can see, 2025 was a big year for resolving several previously troubled exposures. In addition to the gain on the Lehman resolution, loss mitigation efforts resulted in the paydown of our largest below-investment-grade security, reducing the amount of loss mitigation securities in our investment portfolio by over $400 million. In addition, a commercially leased building that was part of a loss mitigation exposure was sold, removing another troubled asset from our balance sheet. The company was able to fully recover its losses through the negotiated settlements that were finalized in 2025. This further demonstrates the strength of our underwriting, our persistence in defending our rights, and our multifaceted approach to working with issuers and developing innovative solutions. Enhancing our investment returns is another strategy that yielded results this past year. As of December 31, 2025, our alternative investments had a fair value of over $1 billion, up from $884 million as of 12/31/2024. In the fourth quarter of…

We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. At this time, we will pause momentarily to assemble our roster. Our first question comes from Marissa Lobo from UBS. Your line is now open. Please go ahead.

Good morning. Thanks for taking my question. Earlier in the quarter, you noted that issuance in BBB credits had come back from prior lower levels. How did this look in the fourth quarter, and what are your thoughts for the mix into 2026?

We are seeing that come back, and we saw it in the fourth quarter. We are off to a very good start in the first quarter, so we believe that is going to continue. We have closed a number of transactions already in U.S. public finance as well as infrastructure finance in Europe, and so we continue to see that. We are very excited about 2026.

Okay. Thank you. And looking at the big exposures, could you give us an update on your outlook across the U.K. utilities and Brightline as well?

Sure. I will start with that unless Dominic and Rob want to chime in. We are looking across, obviously, the U.K. utilities. When you look at what happened during the quarter, our U.K. water utility BIG exposure went down as we upgraded Southern Water. We feel pretty good about that upgrade at Southern Water. It was out in the market and had new equity introduced to it, so they raised debt and equity, making it really, in our opinion, an investment-grade credit. So for U.K. water, we are 100% focused now really on just Thames being the only problem exposure there. We are part of the creditors committee, as you know, on Thames, and we are actively looking to work with the U.K. government at a market-based solution, and we are hopeful to have an update on that relatively shortly. Do you want me to cover Brightline, or do you have any questions on that?

No. That is helpful. Thank you. Brightline, please. Except for Brightline, we remain confident.

Our thesis when we went into Brightline was that there is a lot of subordination below us, over $4 billion below us, and that is a really good position to be in a capital stack of a troubled exposure. Their ridership is going up. I think they are on the way to recovery, and we are obviously happy to be part of any solution they have. But we remain committed to them as well as very confident in our position in that exposure.

Got it. Thanks for taking my questions. Thank you.

Our next question comes from Thomas Patrick McJoynt-Griffith from KBW. Your line is now open. Please go ahead.

Hey, good morning. A question on your alternative investment portfolio. I tend to remember that it is largely CLOs that are in there, but can you just talk about the exposure there? Is there anything with private credit that we should keep on the radar?

We do not really take direct, absolute direct exposure to private credit. Obviously, we are investing in the CLO market, and some of the names are in there as well. However, we do mark our portfolio to market, and we believe that any pain that probably has been experienced in the market today, for many of the names that have been in there, we have experienced. But we remain confident, and again, our exposure there is in good shape. We feel pretty good about it.

Okay. Thanks. In switching gears, to the extent that you allocate some capital into the annuity reinsurance market, would that preclude you from sticking with your $500 million annual buyback target, or should we think of those as two independent opportunities?

You have to look at the entire capital stack as interdependent. We have a range of capital management opportunities this year in terms of stock buyback, but that range will be dictated by what other opportunities we see in the market, specifically the life and annuity reinsurance business. As we said when we made the acquisition, we have substantial excess capital there that allows us to write a substantial amount of new business. But as we have seen, we have gotten more inquiries than we were actually expecting, so we are pretty happy with the opportunities we see there. That might allocate some more capital that will dictate exactly where we will land in the range of our stock buyback. We are committed to capital management. We are committed to stock buybacks and repurchasing. We will just manage that throughout the year.

Thank you. This concludes the question and answer session. I would now like to turn the conference back over to our host, Robert S. Tucker, for closing remarks.

Thank you, operator. I would like to thank everyone for joining us on today's call. If you have additional questions, please feel free to give us a call. Thank you very much.

This concludes today's conference call. Thank you all for attending. You may now disconnect your lines. Have a great day.