WASHINGTON (dpa-AFX) - Bond insurer Assured Guaranty Ltd. (AGO) said Tuesday that it has agreed to reassume $12.9 billion of par it had earlier ceded to private mortgage insurance Radian Group, Inc.'s (RDN) Radian Asset Assurance Inc. It also agreed to reinsure about $1.8 billion of Radian Asset public finance par and will receive a payment of $22 million. Further, Assured Guaranty agreed to acquire Municipal and Infrastructure Assurance Corp. or MIAC, for $91 million in cash from Radian Asset. The deal is expected to close in the first quarter of 2012. Radian Asset acquired MIAC in June 2011 from Macquarie Group Ltd. (MQBKY.PK, MQG.AX). MIAC is licensed to provide financial guaranty insurance and reinsurance in 38 U.S. jurisdictions including the District of Columbia. The deal will enhances Assured Guaranty's flexibility to respond to changes in the financial guaranty industry. '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,' Assured Guaranty President and CEO Dominic Frederico said in a statement. Assured Guaranty said it 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 percent of public finance exposure and 4 percent of structured finance credits. In addition, Assured Guaranty projects it will receive an incremental $1.9 million present value from future installment premiums. 'Assured Guaranty's relationship with Radian Asset spans over 20 years and the current transactions represent the ongoing benefits of that long relationship,' Frederico added. AGO closed Tuesday's regular trading session at $15.56, down $0.22 or 1.39% on a volume of 1.03 million shares. RDN closed at $2.95, down $0.02 or 0.67% on a volume of 6.53 million shares, but the stock surged $0.18 or 6.10% in after hours trading.
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