Assured Guaranty Ltd. ("Assured” or the "Company”) (NYSE:AGO) today
completed its acquisition of Financial Security Assurance Holdings Ltd.
("FSA Holdings”) from Dexia SA, expanding its franchise in the bond
insurance industry and significantly increasing its capabilities to
serve issuers and investors in the municipal, public infrastructure and
structured finance sectors throughout the world.
Assured now has two distinct and highly capitalized platforms to write
direct business -- Financial Security Assurance Inc. ("FSA”), serving
the public finance business, and Assured Guaranty Corp., a diversified
bond insurer. The combination is further enhanced by the financial
strength of the Company’s affiliated reinsurers, bringing the Assured
companies’ aggregate claims-paying ability to approximately $12.5
billion.
"With this highly accretive acquisition, we have created a compelling
value proposition for our customers, shareholders and employees with
significant opportunity for growth,” said Dominic Frederico, President
and Chief Executive Officer of Assured. "Importantly, these are the two
companies that have come through the financial crisis in strong capital
positions due to their strict underwriting discipline. By continuing to
operate them as two separate platforms, we can provide the financial
strength, flexibility and product diversity that will help issuers
achieve cost-efficient market access and provide investors with
increased stability and liquidity.
"Additionally, I am pleased to announce that Séan W. McCarthy, President
and Chief Operating Officer of FSA Holdings, has been named President
and Chief Operating Officer of Assured Guaranty US Holdings Inc., the
holding company for the Company’s direct business units, FSA and Assured
Guaranty Corp.”
"We have assembled a great team of talented people from both Assured and
FSA and are well on our way toward a smooth transition of staff and
systems. Our customers can look forward to responsive service starting
day one,” stated Séan McCarthy.
The Company’s executive team also includes Michael J. Schozer, President
of Assured Guaranty Corp.; Robert B. Mills, Chief Financial Officer;
James M. Michener, General Counsel; and Robert A. Bailenson, Chief
Accounting Officer, who continue in their respective positions. In
addition to its direct business headquarters in New York City, the
combined companies will have offices in San Francisco, London, Sydney,
Tokyo and Bermuda.
Robert P. Cochran, former Chairman and Chief Executive Officer of FSA
Holdings, stated: "I believe that joining the human and financial
resources of these two companies will create a strong leader in the bond
insurance industry. Both companies have kept their promises to insured
bondholders through this unprecedented financial turmoil. As the most
highly rated non-governmental (and non-TARP-supported) financial
institutions standing, they will play a much needed role in the capital
markets.”
Under the terms of the agreement, the purchase price paid by Assured was
approximately $546 million in cash and approximately 22.3 million common
shares of Assured. Dexia will own approximately 13.9% of Assured’s
issued common shares, as a result of this transaction. The transaction
excludes FSA’s Financial Products business, which included the FSA
guaranteed investment contract business. Assured is fully indemnified
against exposure to this business.
Assured Guaranty Ltd. is a Bermuda-based holding company. Its operating
subsidiaries provide credit enhancement products to the U.S. and
international public finance, structured finance and mortgage markets.
Any forward-looking statements made in this press release reflect
Assured’s current views with respect to future events and financial
performance 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. For example,
Assured’s forward-looking statements, including its statements regarding
financial strength and growth opportunities, could be affected by a
rating agency action, such as a ratings downgrade, difficulties with the
execution of Assured’s business strategy, contract cancellations,
developments in the world's financial and capital markets, more severe
or frequent losses associated with products affecting the adequacy of
Assured’s loss reserve, impact of market volatility on the marking to
market on our contracts written in credit default swap form, changes in
regulation or tax laws, governmental actions, natural catastrophes,
Assured’s dependence on customers, decreased demand or increased
competition, loss of key personnel, technological developments, the
effects of mergers, acquisitions and divestitures, changes in accounting
policies or practices, changes in general economic conditions, 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’s filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the dates on which
they are made. Assured undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
