Good day, ladies and gentlemen, and welcome to the second quarter 2011 Assured Guaranty, Limited earnings conference call. My name is Gina and will be your coordinator for today. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s conference. (Operator instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s conference, Mr. Robert Tucker, Managing Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining Assured Guaranty for our second quarter financial results conference call. Today’s presentation is made pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. It may contain forward-looking statements about our new business and credit outlook, 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 publically update or revise them except as required by law. If you’re listening to this replay, or reading a transcript of the call, please note that our statements made today may have been updated since this call. Please refer to the financial – please refer to the inventor information section of our website for our most recent presentations, SEC filings, most current financial filings or for risk factors. Please note that we plan to release our second quarter 2Q – second quarter 10-Q at the end of the call today. Turning to our presentation, our speakers today ar 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. I will now turn the call over to Dominic.

Thank you, Robert. And thanks to all of you for your interest in and support of Assured Guaranty. Before I begin a discussion of our recent quarter, I want to assure you that today, Assured Guaranty is the same company with a solid capital base, good business prospects, and many strategic alternatives that existed prior to the past few months and before the U.S. downgrade. Now, I like to review our quarterly results, the performance of our Assured portfolio, our new business activity and future opportunities, and the status of our S&P and Moody’s ratings reviews. We reported operating income of $136 million, or $0.73 per share, a strong result. Our reported income would have been higher except that there was a charge of $60 million related to the discount rate required by GAAP to calculate our present value of future losses to be paid. For new business, I was pleased that municipal originations, the PVP, were 32% higher in the second quarter than in the first quarter as issuance volume increased in the municipal market. Our total economic loss development was $71 million for the quarter, with the single biggest – single biggest contributing factor, as mentioned previously, being the decrease in the risk-free discount rates used to calculate the present value of future expected losses. This change is not reflected of any credit impairment in our insured portfolio. In fact, if the accounting rules allowed us to use our own portfolio invested rates of return as the discount factor instead of the risk-free rates, we would have recorded very little economic loss development this quarter. And in reality, it is our investment portfolio and it’s returns that are the exact resources we use to fund these discounts for future loss payments. In terms of other loss developments, for…

Thank you, Dominic, and good morning to everyone on the call. Today I will briefly review the financial highlights, and then provide you with more detail on the individual components of operating income, followed by a summary of economic loss development in the insured portfolio for the quarter. I refer you to our press release in financial supplement for explanations and reconciliations of our non-GAAP operating income and GAAP reported income. I am pleased to report strong operating income for the second quarter 2011 of $136.3 million or $0.73 per diluted share, which brings our year-to-date total operating income to $385.2 million or $2.06 per diluted share. On the year-to-date basis, operating income has increased by 35.3% largely due to the execution of the Bank of America agreement in April, and the resulting increase and the benefit for breeches of reps and warranties. The comparable operating income for second quarter 2010 was 172 million or $0.91 per diluted share. In second quarter of 2011, we received over 900 million in recoveries under the Bank of America agreement, which we invested and as a result, helped to increase net investment income when compared with the second quarter of 2010. Second quarter 2011 gross operating expenses, before deferrals, were also lower compared with the prior year, and I expect this cost savings to recur in future quarters. These positive trends in second quarter 2011 operating income were offset primarily by a decline in net premiums earned, which was consistent with our expectations based on scheduled amortization of net par. Despite the market challenges working against us, we have continued to generate new business, we have managed to maintain a strong and steady adjusted book value compared with the year-end 2010, as new business written, commutations, and loss mitigation efforts offset changes in…

(Operator instructions). Your first question comes from the line of Mike Grasher from Piper Jaffray. Please go ahead.

Thank you, and good morning, everyone. The – Dominic, the first question I have is sort of how much capital would you estimate that you raised internally with the debt repurchase in the quarter, and then the contract cancels?

Since we initiated the process, Mike, including everything we’ve done, so the rep and warranty settlements and terminations, the purchase of secured securities, we estimate capital in excess – in run off, capital in excess of $2 billion as in freed up and/or created through those specific transactions. So that takes us back to when S&P announced the criteria, potential changes back in January.

So the number is in excess of $2 billion at this point in time?

Yeah, per our models. Remember, these are our models, not theirs, so we try to be as, you know, accurate as we can, but that doesn’t mean that’s exactly on the nose, but we think around that kind of number.

Okay. Next question, just with regard to sort of the rating issues that are occurring with S&P, what’s the change in the multiplier when a downgrade occurs on one of your exposures in your portfolio, say it goes from AA to A+? And then what’s the degree of change if you have an issue that’s sort of downgraded from say A- to A, or even A to BBB+?

Mike, I guess you’re referring to the cap charges in their models based on the rating of the underlying security?

Exactly.

Well, obviously, this would affect, you know, predominately municipal and although the municipal criteria’s changing, so we really can’t be exactly accurate for an S&P point of view. From a Moody’s point of view because severities are very low, and even probability of default going from a AAA to a AA+ is rather insignificant. As I said in our earlier comments, we don’t expect any significant changes in capital requirements. In other words, that number should be incredibly small, probably with, my guess, $100 million, but that’s a guess, and that’s probably at the far end of the spectrum. We don’t expect this to be a significant issue relative to the, you know, individual downgrades of outstanding municipal transactions.

Okay. And then just sort of the rate of change, I mean, if you go down the ladder to a little riskier holding…

Yeah, the big change, Mike, which is the fallout of investment grade. There’s a huge clip in these deals. So going from AAA to AA, or even AA to an A+ is not significant, it’s only if you fall out of investment grade that you really see significant changes in capital requirements.

Okay, thank you. And then, final question, just your commentary around Credit Suisse. Just to confirm, this is not currently in your receivable for the R&W put backs, is that correct?

That’s a good question. If there is a number out there, it’s under – it’s a low number if I remember correct. Hold on a second, we’re pulling the number for you.

So you’re saying you’ve submitted 1.1 billion?

Yeah, we might have like 130 million receivable up; it’s not significant.

Okay. Thanks, very much.

You’re welcome.

Your next question…

Yeah, Mike, Credit Suisse, we have $56 million to give you an exact answer.

Your next question comes from the line of John Palmer with Sweet Water Capital. Please go ahead. John Palmer – Sweet Water Capital: Hey, guys. Dominic, thanks for taking my call. I – my question here is, why would you not, in this current uncertain environment, consider stock purchases because we obviously, the goal is to have the best credit rating possible, but I would imagine even 200 million spent buying stock here given the massive [inaudible] between ABV and the stock price, and that same 200 million, you would expect, would not make a critical difference in your end rating. And waiting until you do get confirmation would give you a much lower, you know, probably opportunity to buy your stock at a low price.

So far, we disagree with nothing that you’ve said. Remember, we are in blackout period. We also have to consider ourselves with other information that we are aware of. John Palmer – Sweet Water Capital: I don’t mean yourselves. I guess I mean the company itself.

Oh, the company. Even the company can’t – it’s pretty much subject to the same rules as we are. So we’ve got to look at blackout periods, we also have to look at other information known. But we are well aware of the usually accretive nature of a stock buyback. As you know, or as we’ve communicated previously, we would have liked to have gotten more clarity around rating agency capital required levels. We appreciate that the amount of our authorization is rather insignificant relative to that total, and we will consider and take appropriate measures once we clear blackout and we’re confident that we know no other material information that’s not disclosed to the public. John Palmer – Sweet Water Capital: So it is possible – that is in the consideration?

We have a play book that we look at on a daily basis and that’s one of the plays in the playbook. John Palmer – Sweet Water Capital: Obviously, it seems like the more uncertainty there is for a rating agency perspective, the more, you know, the bigger the cost is for you guys. And to a degree, you know, I mean, I happen to be in Warren Buffet’s camp that U.S. should be a AAAA if anything. Their credibility is only going down, so investing, obviously, and having their stamp of approval has arguably less value as we go forward.

Yeah, but we live and die by that sword, so you know, we appreciate the comment and we obviously appreciate the significance of the accretiveness of a buyback. We understand where our authorization is for buyback today. It should not have a material impact, like I said, we’ve got issues to deal with internally regarding blackout and other considerations. [Inaudible], we will continue to evaluate. John Palmer – Sweet Water Capital: Well, the last thing on that, Dominic, and – is – in your opinion, is adjusted book value the best measure to think of when one looks at the longer-term investor, like Sweet Water, is thinking about the underlying intrinsic value of the business?

Well, the only issue with adjusted book is it really don’t forecast further expenses, and obviously, there’s a very little loss content based on a more normalized portfolio. So that’s the only real issue I have. We like to look at operating book value as a reasonably strong measure, and I think that number’s in the $27 range at this point in time. So it’s still usually, you know, our stock price is usually undervalued considering that measurement. John Palmer – Sweet Water Capital: Thank you very much.

You’re welcome.

Your next question comes from the line of Brian Meredith with UBS. Please go ahead. Brian Meredith – UBS: Hey, good morning, Dominic. I’m wondering if you could talk about where you stand on your leverage ratios, if you kind of take a look at what the S&P post model had? How do you stand, you know, from a capital standpoint when applying current, your current portfolio to that model?

Well, you know, good question. So they came out with the leverage test, which is just a hard [inaudible], par against capital. Obviously they look at debt capital. The big question there is whether they’re going to allow either all or some considerations for the UPR as part of the denominator. We believe, with no changes, that we would meet the leverage test by year end. Since we’ve accelerated more termination than what was in that original forecast, I think we’re probably close to that. It might be a third quarter achievement number because we continue to look at opportunities in terms of the negotiating terminations. We just accomplished another one yesterday, as we speak, for roughly about 2.2 billion of par. So we continue to do that pretty well, and that’s the whole issue around leverage. It’s simply the par number. So as I said, we thought that we would get comfort by year end. I think we might be ahead of that schedule, and that was considering no benefit from the UPR, which we believe was one of the most popular comments that S&P did receive. So if we think there is going to be a modification, that’s probably one of the easier ones that would probably have some change to it. But be that as it may, the original question, we think we’re pretty close. We had an original forecast of 12/31. We’re probably ahead of that schedule today. Brian Meredith – UBS: Great. And then, Dominic, my second question is looking at your R&BS kind of portfolio right now, what’s the sensitivity current, particularly for additional losses if we go into another recession?

Well, you know, we’ve been trying to factor in, you know, kind of the double bit in housing and what would another 20% decline in housing values do. A couple things to consider there. One, you know, ultimately, our net loss exposure, ultimate results for R&BS is going to be predicated on the rep and warranty’s success or activity that we have. Obviously, we feel very comfortable with our position. I think the Bank of America agreement was a real statement in that regard. As we look at litigation out in the marketplace, we’re very pleased with most of the direction being very positive to the mono lines and other people perusing rights and remedies. So that’s all going in our favor, so that’s ultimately going to dictate how much money we win or lose on residential mortgage-backed. But looking at it, you know, from the standpoint of just pure loss, one, those exposures continue to pay down at roughly $1 billion a quarter. I think today we only have about 16 billion that’s below investment grade in that area. So it’s a lot smaller number than when we started this thing, say back in 2008. Two, these are very seasoned, you know, as you look at the portfolio today, you know, the majority of debentures are ’05, ’06, ’07. So even the ’07 year is now four years old. And if people made the decision to defend their mortgage and defend their house for that four-year period, we’re confident that their default rate, other than if there’s a huge spike in unemployment, should proceed on a lot more less, you know, dramatic result than what we’ve seen in the past. So the exposures are the last. The borrowers are stronger. Most of the misrepresentative borrowers have either defaulted or…

Well, you know, we looked at all the credits in our portfolio that rely on federal intervention and there wasn’t that many. Obviously, there – you know, the healthcare part is probably the biggest one from Medicare and Medicaid perspective. You know, they’re all in south economic times, I think, but in most cases, you know, varies states, municipalities have balanced budget requirements, which kinds of keeps the kind of focus on the ball. We do expect, you know, a shortfall or a drop in state-aided funds, and obviously, federal to the state. But we think the portfolio’s in a reasonably good enough shape that it will be able to withstand those numbers. As I said, if you look at the economy we’ve been in, really, we sit here and talk about two municipal credits that are troubled significantly being Jefferson County and Harrisburg, and if you looked at the press, both have deals on the table today that we as a bond insurer are supportive of. We think obviously, it significantly improve the position and we hope that they will be passed in the upcoming days or weeks, and let those credits move on to a lot more stabler, healthier position. So you know, we haven’t seen a whole lot. We think the portfolio is very well protected. Where there is troubled exposure, the exposures are down and what’s left if still pretty stable and solid, and I think it could withstand a fairly reasonable amount of further stress. And we continue to look for other solutions that will further mitigate either those exposures or potential losses within these portfolios. Brian Meredith – UBS: Thank you.

You’re welcome.

Your next question comes from the line of Sean Dargan with Wells Fargo Securities. Please go ahead. Sean Dargan – Wells Fargo Securities: Thank you, and good morning. I was just wondering if you had any inside as to the timing of when S&P would release the bond insurance criteria. I mean, originally they had said early in the third quarter.

Yeah, I’ll tell you that you need to ask them that question. Obviously, we had anticipated early third quarter with our individual determination being resolved by the end of the third quarter. We hope to be still –meet that second timetable. We don’t think it’s too complicated once you lock in to the final criteria to run our numbers. Obviously, we just had a review, as you well know, by them that confirms our AA+ stable. This is prior to the government downgrade, but our AA+ stable about a month and a half ago, using the old criteria. Well remember, even in the new criteria, about 60% of the requirements are what I’ll call qualitative, not quantitive. So it’s like risk management, governance, controls, enterprise, risk management, portfolio, those types of things. Well, they’re not going to change from new to old criteria, you know. If you liked our risk management then, you’re going to love it now. If you liked the underwriting guidelines and discipline that shouldn’t change. So you know because of that 40% is going to be quantitive and these are typically the major impacts of the quantitative ones. We hope to see a very quick turnaround of that and we’re hopeful that it happens before the end of the third quarter because we’d like to look at the fourth quarter kind of on a very stable-solid ratings base that allows us to really be, you know, more accepted and more beneficial to issuers in the marketplace. Sean Dargan – Wells Fargo Securities: Sure. Thanks. And as in regards to the discount rate, can you give any sensitivity to what say a move in the ten year – I don’t know if that’s the benchmark, but what a move in interest rates translates into in terms of the impact to your losses because, I mean, the yield on the ten-year is down roughly 70 basis points or so since the end of June.

Yeah, I’ll let our new CFO answer that question.

Yeah, we see, Sean, about a 30-basis point movement in the 15 to 20 year range on the yield curve, actually, 15 to 20 to 25. That 30-basis point movement would be about a $60 million adjustment to our reserves. So is it linear? I wouldn’t say it’s exact linear, but I would say 70 basis points could be anywhere from 70 to $100 million. Sean Dargan – Wells Fargo Securities: Okay, thank you.

You’re welcome.

Your next question comes from the line of Nat Otis with KBW. Please go ahead. Nathaniel Otis – Keefe, Bruyette & Woods: Hey, good morning. All my questions have been answered. Thank you.

Okay, your next question comes from the line of Larry Vitale with Moore Capital. Please go ahead. Larry Vitale – Moore Capital: Hi. Thanks, Dominic. Can you hear me okay?

Yeah, Larry. How are you? Larry Vitale – Moore Capital: I’m good. Good morning. I have just a few sort of housekeeping questions. There was a question earlier about how much in the way of tare ups and that that you’ve done, and you said $2 billion. My recollection is it was roughly that at the end of Q1. Do you have handy what you guys did during Q2?

Yeah, we do. But the $2 billion number, Larry, just to be clear, was something we tore up yesterday. So I'm just saying, we continue to effect that capital, you know, mining technique and looking for opportunistic changes to terminate current insured balances. We’ve done, prior to that most recent tear up, we’ve done 8.8 billion year to date, to kind of give you the number. So if it was 2 in the first, it was 6 in the second and we’ve got another 2 so far in this quarter, if not more. Larry Vitale – Moore Capital: And that’s notional amount or the amount of capital relief that you would experience?

That’s notional part. The capital relief, Larry, that we talked about, the approximately the 2 billion, is made up of all of the strategies. So it includes the benefit from the settlement with Bank of America and other rep and warranty activity. It includes tear ups of CNBS transactions as well as the pooled corporates. It includes the repurchasing of our insured securities. It includes the runoff in the portfolio. So that’s the overall total. So we quote par on terminations. We quote capital when we refer to all the capital enhancement strategies. Larry Vitale – Moore Capital: Okay. That’s helpful. And then just on the Muni side, do you have handy the states on Muni downgrades in – or and upgrades I suppose in Q2 and year to date?

Downgrades have been outpacing the upgrades by about 2 to 1, which is obviously very different than what was previously, say in the ’09 and ’10 when we were 6 to 1 going the other way. Obviously, we rate everything internally so although we look at the external ratings, it’s our internal ratings that drive our reserves and how we look at the portfolio, our below investment grade et cetera dip in our rating. So we monitor them because it will affect the cap charges that we get from the rating agencies. But it’s a monitoring, so yeah, we notice that the downgrade, updates, upgrades, we expect that to continue through the balance of this year at least. Larry Vitale – Moore Capital: And that’s 2 to 1 is on your ratings?

Yeah, it on the rating agency’s rating. But our rating, it’s probably similar. Remember, we had them lower on average anyway because we didn’t have a recalibration. Larry Vitale – Moore Capital: Right. Understood.

For a guarantee. Larry Vitale – Moore Capital: Okay. And then finally, you got $900 million in cash from Bank of America, and I’m – you don’t, at least if you do I missed it. I’m trying to figure out where that cash went by comparing the Q1 balance sheet to the Q2 balance sheet. It seems that most of it ended up in the investment portfolio, but I can’t reconcile where all of it went. So if you could help me out with that, that would be great.

Yeah, I’d say 90% of it went to the investment portfolio. I mean, we have positive cash flow over the six months. Obviously, that would be a lot of – obviously, we do pay dividends and expenses, but we should have enough, you know, coming out of the investment portfolio to meet most of that requirement. So yeah, we’ll provide you with a reconciliation or we’ll make sure that that information is in the supplement. Larry Vitale – Moore Capital: Okay. And then finally, just on the whole discussion on a buyback, your equity market cap closed yesterday at 1.9 billion. And you said the present value of the BofA settlement is 1.6 billion, and I just sort of leave it at that.

Yeah, thanks for that fine statement, Larry. I appreciate it. Larry Vitale – Moore Capital: Okay.

I’ll take out my razor and I’ll be with you in a moment. Larry Vitale – Moore Capital: Thanks, Dominic.

You’re welcome.

Your next question comes from the line of Michael [Pang] with [Goth] Capital. Please go ahead. Andrew [Goth] – [Goth] Capital: Hi. Actually it’s Andrew Goth. I was just wondering if you could just take us through, if you’d be willing, kind of how you think about – if you just wanted to run off right now and bought back stock, like what kind of value you could potentially realize?

That’s the old question, like if you hanged yourself, how long would it take you to die. Obviously, we consider a lot of scenarios. It’s not one that we think is the most beneficial for the company. I think we can run numbers, as you could as well. You know, you’ve got adjusted book of 50, you’ve got an operating books of 27, you’re currently selling in the 10 range. How much stock could you buy back. You know, it’s a mathematical question at that point. Since we’re very comfortable with our financials, with our reserves, with how we state everything on the record, that those books values and adjusted book values, as I said, the adjusted book has got some adjustments in it that you’d have to make. But we think they’re all a reasonable approximations of ultimate value in the company, so do your math. If you buy back at 10, what does it do to book, what does it do to adjusted book. I think it’s a very positive number. Now, could you free up all that capital to do it? Would the regulators allow you to move that strongly in creating dividends and buyback the stock? These are some of the fundamental administrative-type questions that you’d have to answer. But we have some strategies that would allow us to deploy a certain amount of – significant certain amount of capital to do that. And we’ll continue to look at those numbers and continue to go through that thought process as we see the events unfold. Andrew [Goth] – [Goth] Capital: I mean, is it fair to say just based on what you just said, and the adjusted book value that’s on it, I mean, you think in a scenario like that, the ultimate value of the company is a multiple of where it is right now, like 30, 40?

Well, it has to be higher, right? If you’re going to buy it back… Andrew [Goth] – [Goth] Capital: Well, no, what I mean is like, if you’re saying the adjusted book value – if the adjusted book value or some approximation is the – some kind of indicator of the value of the company, then the – and you’d be buying it back at kind of a 20th of that, or whatever,- I mean, a 10th of that, whatever. I mean, doesn’t it stand to reason that, I mean, you could, you know, triple whatever the stock price is from doing that? I mean, it’s just – I just wonder why it makes sense to keep running it if this adjusted book value really does represent kind of the intrinsic value of the company and you could just kind of play that out and triple the value?

Yeah, I don’t want to cut you off, but obviously, we’ve had a lot of discussion around buybacks. We appreciate the significance of that opportunity. We obviously were very concerned of where ratings capital was going to go. Obviously, we think we’ve done a lot of things to really modify the impact of that and therefore, we put ourselves in a better position to continue all parts of the capital management strategy, the shareholder value creation strategy and as I said, we’re in blackout, we’ve got some other strategic things we need to clear prior to us being able to be active in the stock, and we’re doing all those things as we speak today. Andrew [Goth] – [Goth] Capital: Okay.

Thank you.

(Operator instructions). And your next question comes from the line of Scott Frost with Bank of America/Merrill Lynch. Please go ahead. Scott Frost – Bank of America/Merrill Lynch: Hi, thank you. You touched a little bit on the portfolio’s surveillance process I guess for the effects on – of a downgrade. And with respect to the debt ceiling, it’s understandable that you wouldn’t expect a downgrade to really have a whole lot of – from AAA to AA+, to have a serious impact but one of the things I’m worrying about is the longer-term effects on munis will depend on federal support, a consideration of potential budget cuts that are contemplated as well as future cuts that might be necessary if we gain the AAA rating as a goal. Can you sort of touch a little bit more on the mechanics of your portfolio surveillance process with respect to potential budget cuts? I mean, the first round, I guess is defense non-essential spending and another round is supposed to be inact in November. How have you thought about potential cuts and the effect on muni bonds that you wrap?

Sure. Well, first and foremost, any cuts, we believe, will be more impactful on new projects and new financing going forward than the past. Right? And in most cases, we look at our exposures, which already have either a dedicated revenue stream, tax obligations or the general obligation of the specific issuer as the support structure for those debt service payments. And that’s kind of been locked over the past. And as I said, we did take a look at the portfolio to see where there was any reliance on government-type funding, which principally has been the specific project area, like transportation or in the healthcare field for Medicare and Medicaid. So we know those credits, we know what our revenue coverage is. And you know, we’re very comfortable with those exposures and the impact of the downgrade. And as I said, we think most of that debt ceiling and the very much further pressures of a put on the ability of the government to finance other things, will really be more new project specific. And you know, we monitor our underwriting very, very closely. To give you a statistic that we have, if I’ll pull up the right one here in a second. So we looked at our submission activity that we have in the quarter and a good example would be, in a quarter, we declined to even consider underwriting 30% of all submission. We reviewed and rejected another 15% for credit or legal structure issues. So you’re looking at about 45% declination just to kind of show you that we pay attention to essential services. We pay attention to the support of the foundation of the revenue backing each obligation that we consider for insurance. So that’s kind of how we’re taking this on a prospective basis. And as I said, we did the retrospect, the review of the portfolio, for specifically that reliance on U.S. support and are very comfortable with the exposures that we have. Scott Frost – Bank of America/Merrill Lynch: Is there any sort of contemplation of if the federal government is a significant part of the local economy, for example, if a military base is closed, something like that, is that also part of the surveillance?

Yes, military housing would be one of the big issues. But we have very, very small exposures in that area. But you’re exactly right, military housing is a big one in that regard. Scott Frost – Bank of America/Merrill Lynch: Okay, all right. Thanks.

You’re welcome.

Your next question comes from the line of Randy Rasman with Chatham. Please go ahead. Randy Rasman – Chatham : Hi. Can you guys address the – just the increase in the loss, in the loss adjustment expense reserves in AGMC from Q1 to Q2, from like 37 million to 491 million in just the supplement?

Well, remember, in the – go ahead, Rob.

It’s going to be more predicated on the receipt of the rep and warranties because depending on what you’re looking at, net reserves would be the reserve minus the asset. As the asset gets paid down, then the reserve goes up but it doesn’t go up because the offset against it is smaller. Randy Rasman – Chatham : So you should net the – what you expect to receive from rep and warranty against that? Is that the way to think about it?

It depends on the presentation. Obviously, we felt that there was economic loss of development of about 140 in the quarter. If you take out the P-gap, it’s down to 70, and we said the 70, the majority of that, 60 of it was the change in the discount rates.

Yeah, I mean, the economic loss development, just to be clear, is $70 million. That’s – 60 of it was related to discount rates. The additional 74 was already embedded within the premium reserve and was set to go regardless of any change in credit. So there’s 144 coming through the income statement and there is – of that 144, 70 million was related to economic development and 60 million of that was interest rate. Randy Rasman – Chatham : Okay.

It depends on what presentation you’re looking at. In some cases for status net, for GAAP, it’s not. So I don’t know what you’re referring to specifically, but the collection of the rep and warranty at the asset or individual company basis on a STATE basis will increase reserve.

And if you’re looking at the claims page in the supplement, you’re seeing the increase in reserves. What that is the collection of the cash from the [inaudible] transaction by collecting your cash you effectively increase your reserve and you get a benefit from claim [inaudible] resources. Randy Rasman – Chatham : Okay. Thank you.

Yeah, it’s complicated. We apologize for that, but the accounting doesn’t leave for a simple, you know, path or reconciliation. Randy Rasman – Chatham : Got it.

Due to the interest in time, that concludes the Q&A session. I would now like to turn the call over to Mr. Robert Tucker for closing.

Thank you, operator, and thanks to all of you for joining us today for our conference call. If you have additional questions, please feel free to call either Ross, Aaron or myself. Thanks again.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation, you may now disconnect. Have a great day.