Loan Personal Secured Settlement Structured

Assured Guaranty's CEO Discusses Q3 2011 Results - Earnings Call Transcript

Assured Guaranty Ltd. ( AGO ) Q3 2011 Earnings Call November 15, 2011 7:30 AM ET

Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 Assured Guaranty Earnings Conference Call. My name is Latasha and I’ll be your coordinator for today.

(Operator Instructions)

I would now like to turn the call over to Mr. Robert Tucker, Managing Director of Investor Relations. Please proceed.

Robert Tucker

Good morning and thank you for joining Assured Guaranty for our Third Quarter 2011 Financial Results Conference Call. Today’s presentation is made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. It may contain forward-looking statements about our new business and credit outlooks, market conditions, credit spreads, financial ratings, loss reserves, financial results, future reps and warranty settlement agreements or 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’re listening to the call by the replay or if you’re 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 Web site for our recent presentations, SEC filings and most current financial filings, and for the risk factors.

Turning to the presentation, our speakers today are: Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Limited; and Rob Bailenson, our Chief Financial Officer. After their remarks, we will open up the call to questions.

As the webcast is not enabled for Q&A, please dial into the call if you’d like to ask a question.

Why would a company want to buy my structured settlement ...

There are several structured settlement companies and corporates that purchase structured settlements and offer a lump sum in exchange. The simple reason for a company to purchase a structured settlement is that it represents a good investment deal. Structured settlement payments from lottery winnings, royalty payments, and insurance annuities are income-tax free and are secured by federal and state regulations.

Companies that purchase structured settlements are thus assured of a steady stream of income over a period of time which allows them to execute their growth plans in an assured manner. Alternatively the money can be invested by these companies where the principal continues to grow.

Corporates purchase structured settlements at a profit. This means that the amount which the seller receives is a discounted amount arrived at by factoring in the profit margins and bank interest rates. Also, by purchasing a structured settlement companies are able to obtain loans more easily. This is because of the secured nature of these settlements. The loan money can be used to pay off a large chunk of the lump sum. Thus, the company ends up paying very little out of its own pockets.

Structured settlements represent secured finances that help improve the market standing of a company which has a healthy effect on their businesses. They represent a safe business option for their partners because of their financial soundness. The more business they generate and prosper the less need these companies have for middle-men in their dealings with sellers of structured settlements. This allows them to offer the best rates to sellers by eliminating broker’s commissions.

The work involved in executing a structured settlement sale basically consists of marketing activity and working with the seller for acquiring court approval. Companies do not require diverting too many resources to this activity but the returns of the efforts are manifold. At any point in time, there are individuals who need cash for immediate use. By establishing a network through agents and by maintaining an online presence, structured settlement buyers can tap into a lucrative source of guaranteed and income that will last them for a long time.

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