Assured Guaranty Enters into Definitive Agreements to Reassume $12.9 Billion Portfolio, Reinsure $1.8 Billion Public Finance Portfolio and Acquire Municipal and Infrastructure Assurance Corporation
Assured Guaranty Ltd. (NYSE:AGO) (together with its subsidiaries, "Assured Guaranty") announced today that Assured Guaranty Municipal Corp. ("AGM") has entered into an agreement to reassume $12.9 billion of par it had previously ceded to Radian Asset Assurance Inc. ("Radian Asset"). Also, through Assured Guaranty Corp. ("AGC"), Assured Guaranty has agreed to reinsure approximately $1.8 billion of Radian Asset public finance par. In addition, Assured Guaranty has agreed to acquire Municipal and Infrastructure Assurance Corporation ("MIAC"), which is licensed to provide financial guaranty insurance and reinsurance in 38 U.S. jurisdictions including the District of Columbia. The parties anticipate the reassumption and reinsurance will be completed this week; the purchase of MIAC is subject to regulatory approval and is expected to close in the first quarter of 2012.
"We are pleased to enter into this transaction with Radian Asset, as this shows our continued commitment to building a stronger franchise and repositioning the financial guaranty industry," said Dominic Frederico, President and CEO of Assured Guaranty. "This transaction helps us achieve success on several strategic fronts, including increasing our adjusted book value per share by approximately $0.37, based on expected intercompany reinsurance amounts, and increasing the size of our insured portfolio by approximately $15 billion. The acquisition of MIAC enhances our flexibility to respond to changes in the financial guaranty industry."
Assured Guaranty will receive a payment of $86 million from Radian Asset for the re-assumption of the $12.9 billion of ceded risk, which consists 96% of public finance exposure and 4% of structured finance credits; additionally, Assured Guaranty projects it will receive an incremental $1.9 million present value from future installment premiums. In connection with the reinsurance of $1.8 billion of public finance par, Assured Guaranty will receive a payment of $22 million. Both the reassumed and reinsured portfolios are composed entirely of selected credits that meet Assured Guaranty's underwriting standards. Assured Guaranty will pay $91 million in cash for MIAC; at closing, MIAC will have cash and cash equivalent assets of approximately $75 million. MIAC has not issued any guarantees since its formation.
"Assured Guaranty's relationship with Radian Asset spans over 20 years and the current transactions represent the ongoing benefits of that long relationship," Mr. Frederico added.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made in this press release reflect Assured Guaranty's current views with respect to future events and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. These risks and uncertainties include, but are not limited to, those resulting from Assured Guaranty's inability to obtain regulatory approval for its proposed purchase of Municipal and Infrastructure Assurance Corporation; adverse developments in the reassumed portfolio; and other risks and uncertainties that have not been identified at this time, management's response to these factors, and other risk factors identified in Assured Guaranty's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of January 24, 2012. Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Assured Guaranty Ltd. is a publicly traded (NYSE: AGO) Bermuda-based holding company. Its operating subsidiaries, including AGM, AGC and Assured Guaranty Re Ltd., provide credit enhancement products to the U.S. and international public finance, infrastructure and structured finance markets. More information on Assured Guaranty Ltd. and its subsidiaries can be found at www.assuredguaranty.com.
Contacts:
Assured Guaranty Ltd.
Investor Relations:
Robert
Tucker, 212-339-0861
Managing Director, Investor Relations and
Corporate Communications
rtucker@assuredguaranty.com
or
Ross
Aron, 212-261-5509
Vice President, Equity Investor Relations
raron@assuredguaranty.com
or
Media:
Ashweeta
Durani, 212-408-6042
Vice President, Corporate Communications
adurani@assuredguaranty.com
