Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity

Shareholders' Equity

16. Shareholders' Equity

Share Issuances

        The Company has an authorized share capital of $5.0 million divided into 500,000,000 shares, par value $0.01 per share. Except as described below, the Company's common shares have no preemptive rights or other rights to subscribe for additional common shares, no rights of redemption, conversion or exchange and no sinking fund rights. In the event of liquidation, dissolution or winding-up, the holders of the Company's common shares are entitled to share equally, in proportion to the number of common shares held by such holder, in the Company's assets, if any remain after the payment of all the Company's liabilities and the liquidation preference of any outstanding preferred shares. Under certain circumstances, the Company has the right to purchase all or a portion of the shares held by a shareholder at fair market value. All of the common shares are fully paid and non assessable. Holders of the Company's common shares are entitled to receive dividends as lawfully may be declared from time to time by the Company's Board of Directors.

        Subject to the Company's Bye-Laws and Bermuda law, the Company's Board of Directors has the power to issue any of the Company's unissued shares as it determines, including the issuance of any shares or class of shares with preferred, deferred or other special rights.

Issuance of Shares

	Number of Shares		Price per Share		Proceeds		Net Proceeds
	(in millions, except per share amounts)
December 4, 2009(1)		27.5	$	20.90	$	575.0	$	573.8
June 24, 2009(1)(2)		44.3		11.00		487.0		448.9

(1)

Includes over allotment. On December 8, 2009, $500 million was contributed to AGC in satisfaction of the external capital portion of the rating agency capital initiatives for AGC.

(2)

Concurrent with this common share offering, the Company sold equity units. See Note 15, Long-Term Debt and Credit Facilities. Proceeds were used to fund the AGMH Acquisition.

        Under the Company's Bye-Laws and subject to Bermuda law, if the Company's Board of Directors determines that any ownership of the Company's shares may result in adverse tax, legal or regulatory consequences to the Company, any of the Company's subsidiaries or any of its shareholders or indirect holders of shares or its Affiliates (other than such as the Company's Board of Directors considers de minimis), the Company has the option, but not the obligation, to require such shareholder to sell to the Company or to a third party to whom the Company assigns the repurchase right the minimum number of common shares necessary to avoid or cure any such adverse consequences at a price determined in the discretion of the Board of Directors to represent the shares' fair market value (as defined in the Company's Bye-Laws).

Share Repurchases

        On August 4, 2010, the Company's Board of Directors approved a share repurchase program for up to 2.0 million common shares. In August 2011, the Company paid $23.3 million to repurchase 2.0 million common shares. On November 14, 2011, the Company's Board of Directors approved a new share repurchase program, for up to 5.0 million common shares, to replace the prior program. Share repurchases will take place at management's discretion depending on market conditions. No shares were repurchased in 2011 under the program that was approved in 2011.

Share Repurchases

Year	Number of Shares Repurchased		Total Payments
	(in millions)
2011		2.0	$	23.3
2010		0.7		10.5
2009		1.0		3.7

Deferred Compensation

        In August 2011, the Chief Executive Officer and the General Counsel of the Company elected to invest a portion of their accounts under the Assured Guaranty Ltd. supplemental employee retirement plan ("AGL SERP") in 138,375 units in the employer stock fund in the AGL SERP. Each unit in the employer stock fund represents the right to receive one AGL common share upon a distribution from the AGL SERP. The 138,375 units equal the number of AGL common shares which could have been purchased with the value of the account deemed invested in the employer stock fund as of the date of such election. When such investment elections were made in August 2011, the Company purchased, for $1.5 million, 138,375 AGL common shares and placed such shares in trust to be distributed to the Chief Executive Officer and the General Counsel upon a distribution from the AGL SERP in settlement of their units invested in the employer stock fund. The Company recorded the purchases of such common shares in "deferred equity compensation" account in the consolidated balance sheet.

        In December 2011, certain executives of the Company elected to invest a portion of their accounts under the Assured Guaranty Corp. supplemental employee retirement plan ("AGC SERP") in 68,181 units in the employer stock fund in the AGC SERP. Each unit in the employer stock fund represents the right to receive one AGL common share upon a distribution from the AGC SERP. The 68,181 units equals the number of AGL common shares which could have been purchased with the value of the account deemed invested in the employer stock fund as of the date of such election. See Note 17 Employee Benefit Plans.

Dividends

        Any determination to pay cash dividends will be at the discretion of the Company's Board of Directors, and will depend upon the Company's results of operations and operating cash flows, its financial position and capital requirements, general business conditions, legal, tax, regulatory, rating agency and any contractual restrictions on the payment of dividends and any other factors the Company's Board of Directors deems relevant. For more information concerning regulatory constraints that will affect the Company's ability to pay dividends, see Note 10, Insurance Company Regulatory Requirements.

        On February 9, 2012, the Company declared a quarterly dividend of $0.09 per common share, an increase of 100% from $0.045 per common share paid on November 30, 2011. The dividend is payable on March 8, 2012 to shareholders of record at the close of business on February 23, 2012.