1273813--3/1/2010--ASSURED_GUARANTY

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{condition, economic, financial}

{regulation, change, law}

{capital, credit, financial}

{provision, law, control}

{loss, insurance, financial}

{debt, indebtedness, cash}

{stock, price, share}

{operation, international, foreign}

{cost, operation, labor}

{gas, price, oil}

{operation, natural, condition}

{personnel, key, retain}

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{financial, litigation, operation}

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Risks Related to the Company's Expected Losses Recorded estimates of expected losses are subject to uncertainties and such estimates may not be adequate to cover potential paid claims. Risks Related to the Company's Financial Strength and Financial Enhancement Ratings A downgrade of the financial strength or financial enhancement ratings of any of the Company's insurance and reinsurance subsidiaries would adversely affect its business and prospects and, consequently, its results of operations and financial condition. If AGC's, AG Re's or AGRO's financial strength or financial enhancement ratings were downgraded, the Company could be required to make termination payments or post collateral under certain of its credit derivative contracts, which could impair its liquidity, results of operations and financial condition. The downgrade of AG Re's financial strength ratings gives reinsurance counterparties the right to recapture ceded business, which would lead to a reduction in the Company's unearned premium reserve, net income and future net income. Actions taken by the rating agencies with respect to capital models and rating methodology of the Company's business or changes in capital charges or downgrades of transactions within its insured portfolio may adversely affect its ratings, business prospects, results of operations and financial condition. Risks Related to the AGMH Acquisition and the Integration of AGMH The Company has exposure through financial guaranty insurance policies to AGMH's former financial products business, which the Company did not acquire. The Company has substantial exposure to credit and liquidity risks from Dexia and the Belgian and French states. AGMH and its subsidiaries could be subject to non-monetary consequences arising out of litigation associated with AGMH's former financial products business, which the Company did not acquire. Restrictions on the conduct of AGM's business subsequent to the AGMH Acquisition place limits on the Company's operating and financial flexibility. Risks Related to the Financial, Credit and Financial Guaranty Markets If the recent difficult conditions in the U.S. and world-wide financial markets do not improve, the Company's business, liquidity, financial condition and stock price may be adversely affected. Some of the state and local governments and entities that issue obligations the Company insures are experiencing unprecedented budget deficits and revenue shortfalls that could result in increased credit losses or impairments and capital charges on those obligations. Recent adverse developments in the credit and financial guaranty markets have substantially increased uncertainty in the Company's business and may materially and adversely affect its financial condition, results of operations and future business. Changes in interest rate levels and credit spreads could adversely affect demand for financial guaranty insurance as well as the Company's financial condition. Competition in the Company's industry may adversely affect its revenues. Changes in rating scales applied to municipal bonds may reduce demand for financial guaranty insurance. The Company's international operations expose it to less predictable credit and legal risks. The Company's investment portfolio may be adversely affected by credit, interest rate and other market changes. Risks Related to the Company's Capital and Liquidity Requirements The Company may require additional capital from time to time, including from soft capital and liquidity credit facilities, which may not be available or may be available only on unfavorable terms. An increase in the Company's subsidiaries' risk-to-capital ratio or leverage ratio may prevent them from writing new insurance. The Company's ability to meet its obligations may be constrained. The ability of AGL and its subsidiaries to meet their liquidity needs may be limited. Risks Related to the Company's Business The Company's financial guaranty products may subject it to significant risks from individual or correlated credits. Some of the Company's direct financial guaranty products may be riskier than traditional financial guaranty insurance. The Company's reinsurance business is primarily dependent on facultative cessions and portfolio opportunities, which may not be available to the Company in the future. Further downgrades of one or more of the Company's reinsurers could reduce the Company's capital adequacy and return on equity. The performance of the Company's invested assets affects its results of operations and cash flows. The Company is dependent on key executives and the loss of any of these executives, or its inability to retain other key personnel, could adversely affect its business. The Company's business could be adversely affected by Bermuda employment restrictions. Risks Related to Accounting Principles Generally Accepted in the United States of America ("GAAP") and Applicable Law Marking-to-market the Company's insured credit derivatives portfolio may subject net income to volatility. Change in industry and other accounting practices could impair the Company's reported financial results and impede its ability to do business. Changes in or inability to comply with applicable law could adversely affect the Company's ability to do business. Proposed legislative and regulatory reforms could, if enacted or adopted, result in significant and extensive additional regulation. AGL's ability to pay dividends may be constrained by certain regulatory requirements and restrictions. Applicable insurance laws may make it difficult to effect a change of control of AGL. Changes in U.S. tax laws could reduce the demand or profitability of financial guaranty insurance, or negatively impact the Company's investment portfolio. Certain of the Company's foreign subsidiaries may be subject to U.S. tax. AGL and its Bermuda subsidiaries may become subject to taxes in Bermuda after March 2016, which may have a material adverse effect on the Company's results of operations and on an investment in the Company. The Organization for Economic Cooperation and Development and the European Union are considering measures that might increase the Company's taxes and reduce its net income. U.S. Persons who hold 10% or more of AGL's shares directly or through foreign entities may be subject to taxation under tax rules. U.S. Persons who hold shares may be subject to U.S. income taxation at ordinary income rates on their proportionate share of the Company's related person insurance income. U.S. Persons who dispose of AGL's shares may be subject to U.S. income taxation at ordinary income tax rates on a portion of their gain, if any. U.S. Persons who hold common shares will be subject to adverse tax consequences if AGL is considered to be a "passive foreign investment company" for U.S. federal income tax purposes. Changes in U.S. federal income tax law could materially adversely affect an investment in AGL's common shares. Recharacterization by the Internal Revenue Service of the Company's U.S. federal tax treatment of losses on the Company's CDS portfolio can adversely affect the Company's financial position. An ownership change under Section 382 of the Code could have adverse U.S. federal tax consequences. AGMH likely experienced an ownership change under Section 382 of the Code. Risks Related to AGL's Common Shares The market price of AGL's common shares may be volatile, which could cause the value of an investment in the Company to decline. AGL's common shares are equity securities and are junior to existing and future indebtedness. There may be future sales or other dilution of AGL's equity, which may adversely affect the market price of its common shares. Anti-takeover provisions in AGL's Bye-Laws could impede an attempt to replace or remove its directors, which could diminish the value of its common shares. Provisions in the Code and AGL's Bye-Laws may reduce or increase the voting rights of its common shares. Provisions in AGL's Bye-Laws may restrict the ability to transfer common shares, and may require shareholders to sell their common shares. Existing reinsurance agreement terms may make it difficult to effect a change of control of AGL

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1273813--3/1/2010--ASSURED_GUARANTY_LTD