HAMILTON, Bermuda--(BUSINESS WIRE)--
Assured Guaranty Ltd. (together with its subsidiaries, Assured
Guaranty), the leading financial guaranty insurance company, announced
that its subsidiary Assured Guaranty Corp. (AGC) has entered into an
agreement to acquire MBIA UK Insurance Limited (MBIA UK), the European
operating subsidiary of MBIA Insurance Corporation (together with its
subsidiaries, MBIA). The parties expect the transaction to close in
early January 2017, subject to receipt of regulatory approvals and the
satisfaction of other customary closing conditions. There can be no
assurance that regulatory approvals will be obtained.
Under the agreement, AGC will deliver to MBIA all of the notes issued in
the Zohar II 2005-1 transaction that AGC holds, and the seller, MBIA UK
(Holdings) Limited, will transfer to AGC all of the outstanding shares
of MBIA UK plus $23 million (£18 million) in cash. The Zohar notes to be
transferred had, as of June 30, 2016, a total outstanding principal of
approximately $347 million (£261 million). MBIA Insurance Corporation
insures all of the notes issued in the Zohar II 2005-1 transaction.
"This agreement furthers our strategy of acquiring legacy financial
guaranty companies," said Dominic Frederico, President and CEO of
Assured Guaranty. "In this case, we will be acquiring a seasoned insured
portfolio of almost exclusively European transactions and the capital
resources to support those exposures. We expect this transaction to be
accretive to Assured Guaranty's earnings per share, operating
shareholders' equity and adjusted book value."
Nick Proud, CEO of Assured Guaranty (Europe) Ltd. (AGE), said, "This is
a landmark transaction that will significantly increase the size of
Assured Guaranty's European insured portfolio, creating a total non-U.S.
portfolio of approximately $45 billion (£34 billion). It also sends a
strong message to the market that the monoline model − and Assured
Guaranty specifically − is an active source of infrastructure funding
solutions. AGE is currently mandated on a number of primary UK
transactions, and we expect this acquisition to add further momentum to
our expanding European opportunities."
As of June 30, 2016, MBIA UK had an insured portfolio of approximately
$13 billion (£10 billion) of net par and approximately $500 million
(£374 million) of GAAP book value. At this point, Assured Guaranty plans
to maintain MBIA UK as a stand-alone entity but could combine it with
other European affiliates in the future.
BofA Merrill Lynch is acting as financial advisor to Assured Guaranty,
and Mayer Brown LLP is acting as its legal advisor.
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 acquisition of
MBIA UK or any plan to combine MBIA UK with other Assured Guaranty
affiliates in the future; adverse developments in the acquired
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
September 29, 2016. 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 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 AssuredGuaranty.com.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160929005375/en/
