Assured Guaranty Ltd (NYSE:AGO) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Rep & Warranty
Geoffrey Dunn – Dowling & Partners: Couple of questions, first, Rob, did I hear, or you said $400 million of your remaining rep and warranty is not covered by risk sharing?
Robert A. Bailenson – CFO: That’s correct.
Geoffrey Dunn – Dowling & Partners: It looks like you guys have a systematic buyback in place. Can you give any details behind that, any governing metrics?
Robert A. Bailenson – CFO: As we’ve said before, Jeff the first governing metric is with cash is available in the Bermuda holding company that would be a free capital to buy back shares and typically we will create authorizations where we know that we have the free cash and the free capital available so we can execute on a new authorization that we’ve put in through the company. As we look at – as I mentioned in my conversation, other strategies to create even additional capital flexibility, we will alert you of the fact of the changes, and then as money becomes available and we believe we are still in an excess capital position. As we do believe we will continue authorize more share buybacks.
Geoffrey Dunn – Dowling & Partners: What was the holdco. balance at the quarter end?
Robert A. Bailenson – CFO: Holdco. balance is, well, as of now we have about $143 million in cash at the holding Company.
Geoffrey Dunn – Dowling & Partners: Then last, Dominic, can you talk to the competitive dynamic from Build America? It looks like they wrote a little over $800 million of business this quarter par. What kind of competitive dynamic are you seeing in the marketplace? Are you going head-to-head with them and is there any impact on pricing?
Dominic J. Frederico – President and CEO: Well, I guess I will begin (indiscernible). I believe there is a competitive dynamic. Obviously, they have begun writing business. I think as we look to the first quarter as I talked typically we will always experience some market dislocation relative to any ratings action or involvement in any given period of time and we saw that again in the first quarter when you get a rating that comes out publicly without much explanation. And as we saw in the Moody’s case, when you go back to the credit score card and AGM is truly AA1 Company as per their own published metrics which we put in as one of the highest rated companies in the world and ultimately that messages gets delivered. Things typically revert back to a norm. And as you look in April we did more than double the business that they did in April and I would expect that to continue. I don’t see them as a long-term viable entity that could continue to be active in the marketplace relative to their shrinking capital base, continued operating losses in their U.S. regulated entity. So, we are very positive about our position in the market, expected to see a reaction, saw it obviously, we’re able to go back out connect with our constituents, maintain our pricing discipline in a market focus, and as we look forward, we do expect to see further competition without question and obviously we think we are very well positioned to be able to manage our way through that.
Line of Credit
Brian Meredith – UBS: Couple of questions, good morning. First, Dominic I was hoping you could elaborate a little bit about your comments on kind of fixing or changing the corporate structure to make it more conducive for the capital management and to the elimination of the $200 million standby line of credit at AG. Do you have anything to do with that?
Dominic J. Frederico – President and CEO: The elimination of line of credit had nothing to do with that. Brian, I’d like to be a lot more specific, but as you can appreciate and anything that we have to do with mirror to regulations that we have sitting over the Company, there are just too many authorities that needed to be contacted, presented to and seek approval to do what we want to do. As I said in my comments, we’re very comfortable at our direction, we’ve committed to a direction, we’ve contacted all the necessary parties to seek to various levels of approvals and make the necessary changes, like for us, for instance there is a lot of collapsing of our overall corporate structure, so there are some subsidiaries that are no longer necessary and we want to collapse them. They were subject to a reinsurance pooling arrangement, so we had to go to the applicable states and request them to allow us to cancel the reinsurance arrangements and therefore collapse the business. All this stuff takes time. I’d like to tell you is we’re very optimistic about the outcome. We’re making the necessary progress and we hope to announce within the next quarter or so the changes and therefore be able to communicate specifically with you what will be the changes and what is then the resolving effect on capital flexibility.
Robert A. Bailenson – CFO: Brian one more thing the AG (re-facility) was not a line of credit. It was a soft capital facility and so it wasn’t available for us to draw and left certain triggers were hit, so it was not giving us much benefit, so that’s why we cancelled it.
Brian Meredith – UBS: Quick second question here, you noticed a pretty big pop in the trouble HELOC exposures in March, anything behind that?
Dominic J. Frederico – President and CEO: We did a servicing transfer on a big hunk of that portfolio and in any transfer and this took long period of time to accomplish, obviously the existing servicer didn’t pay a whole lot of attention in those last few months as we are preparing the transfer and bow having moved it to our preferred servicer with an incentive based contract by May all the numbers are not only coming back in the balance, but we expect significant improvement going forward.