Long-Term Debt and Credit Facilities

The principal and carrying values of the Company’s long-term debt are presented in the table below.

Principal and Carrying Amounts of Debt



	As of March 31, 2018						As of December 31, 2017
	Principal			Carrying Value			Principal			Carrying Value
	(in millions)
AGUS:
7% Senior Notes (1)	$	200		$	197		$	200		$	197
5% Senior Notes (1)	500			496			500			496
Series A Enhanced Junior Subordinated Debentures (2)	150			150			150			150
Total AGUS	850			843			850			843
AGMH(3):
67/8% QUIBS (1)	100			70			100			70
6.25% Notes (1)	230			142			230			142
5.6% Notes (1)	100			57			100			57
Junior Subordinated Debentures (2)	300			194			300			192
Total AGMH	730			463			730			461
AGM(3):
AGM Notes Payable	6			6			6			6
Total AGM	6			6			6			6
Purchased debt (4)	(48		)	(31		)	(28		)	(18		)
Total	$	1,538		$	1,281		$	1,558		$	1,292

____________________


(1)	AGL fully and unconditionally guarantees these obligations


(2)	Guaranteed by AGL on a junior subordinated basis.


(3)	Carrying amounts are different than principal amounts due primarily to fair value adjustments at the AGMH acquisition date, which are accreted or amortized into interest expense over the remaining terms of these obligations.

(4)

In First Quarter 2018 and full year 2017, AGUS purchased $20 million and $28 million, respectively, principal amount of AGMH's outstanding Junior Subordinated Debentures. The Company recognized a $7 million loss on extinguishment of debt in First Quarter 2018, which is included in other income. There were no purchases of debt of the Company's subsidiaries by the Company or any of its subsidiaries in First Quarter 2017.

Intercompany Credit Facility and Intercompany Debt

On October 25, 2013, AGL, as borrower, and AGUS, as lender, entered into a revolving credit facility pursuant to which AGL may, from time to time, borrow for general corporate purposes. Under the credit facility, AGUS committed to lend a principal amount not exceeding $225 million in the aggregate. Such commitment terminates on October 25, 2018 (the loan commitment termination date). The unpaid principal amount of each loan will bear interest at a fixed rate equal to 100% of the then applicable Federal short-term or mid-term interest rate, as the case may be, as determined under Section 1274(d) of the Code, and interest on all loans will be computed for the actual number of days elapsed on the basis of a year consisting of 360 days. Accrued interest on all loans will be paid on the last day of each June and December, beginning on December 31, 2013, and at maturity. AGL must repay the then unpaid principal amounts of the loans by the third anniversary of the loan commitment termination date. No amounts are currently outstanding under the credit facility.

In addition, in 2012 AGUS borrowed $90 million from its affiliate AGRO to fund the acquisition of MAC. During 2017, AGUS repaid $10 million in outstanding principal as well as accrued and unpaid interest. In 2016, the parties agreed to extend the maturity date of the loan from May 2017 to November 2019. As of March 31, 2018, $60 million remained outstanding.

Committed Capital Securities

Each of AGC and AGM have entered into put agreements with four separate custodial trusts allowing AGC and AGM, respectively, to issue an aggregate of $200 million of non-cumulative redeemable perpetual preferred securities to the trusts in exchange for cash. The custodial trusts were created for the primary purpose of issuing $50 million face amount of CCS, investing the proceeds in high-quality assets and entering into put options with AGC or AGM, as applicable. The Company does not consider itself to be the primary beneficiary of the trusts and the trusts are not consolidated in Assured Guaranty's financial statements.

The trusts provide AGC and AGM access to new equity capital at their respective sole discretion through the exercise of the put options. Upon AGC's or AGM's exercise of its put option, the relevant trust will liquidate its portfolio of eligible assets and use the proceeds to purchase the AGC or AGM preferred stock, as applicable. AGC or AGM may use the proceeds from its sale of preferred stock to the trusts for any purpose, including the payment of claims. The put agreements have no scheduled termination date or maturity. However, each put agreement will terminate if (subject to certain grace periods) specified events occur. Both AGC and AGM continue to have the ability to exercise their respective put options and cause the related trusts to purchase their preferred stock.

Prior to 2008 or 2007, the amounts paid on the CCS were established through an auction process. All of those auctions failed in 2008 or 2007, and the rates paid on the CCS increased to their respective maximums. The annualized rate on the AGC CCS is one-month LIBOR plus 250 basis points, and the annualized rate on the AGM CPS is one-month LIBOR plus 200 basis points.

See Note 7, Fair Value Measurement, –Other Assets–Committed Capital Securities, for a fair value measurement discussion.