Assured Guaranty to Be Paid $360 Million Plus Future Installment Premiums
Assured Guaranty Ltd. (NYSE: AGO) (together with its subsidiaries,
Assured Guaranty), announced today an agreement with Syncora Guarantee
Inc. (SGI), a wholly owned subsidiary of Syncora Holdings Ltd. (SHL),
under which Assured Guaranty Corp. (AGC) will reinsure, generally on a
100% quota share basis, SGI-insured financial guaranty insurance
policies. The transaction also includes the commutation of a book of
business previously ceded to SGI by Assured Guaranty Municipal Corp.
(AGM). The transactions reinsured and commuted will total approximately
$14.5 billion in net par amount. As consideration for the transaction,
at closing, SGI will pay $360 million and assign installment premiums
estimated to total $55 million on a present value basis to Assured
Guaranty. Included in those amounts are approximately $100 million of
statutory loss reserves for RMBS transactions.
Additionally, on behalf of SGI, AGC will provide certain administrative
services on the reinsured portfolio, including surveillance, risk
management, and claims processing. The transaction is subject to
regulatory approval and other closing conditions and is expected to
close by the end of the second quarter of 2018.
“We are pleased to announce this transaction, which we expect to be
accretive to Assured Guaranty’s future earnings and financial strength,"
commented Dominic Frederico, President and Chief Executive Officer of
Assured Guaranty. “By reinsuring and administering substantially all of
Syncora’s insured portfolio, the transaction continues our successful
strategy of acquiring legacy financial guarantors or their insured
portfolios.”
The reinsured portfolio consists predominantly of public finance and
infrastructure obligations that meet AGC’s new business underwriting
criteria. The consideration for the transaction includes proceeds that
Assured Guaranty will use to establish loss reserves for certain RMBS
transactions. Furthermore, the transaction does not include any Puerto
Rico exposure.
Goldman Sachs & Co. LLC served as financial advisor to Assured Guaranty,
and Willkie Farr & Gallagher LLP was Assured Guaranty’s legal counsel.
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, failure to close the
reinsurance/commutation transaction by the expected date, or at all;
failure to meet all closing conditions, including regulatory approvals
and third-party consents; uncertainty as to the timing and amount, if
any, of payment on SGI’s surplus notes that the New York Department of
Financial Services may approve; 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 February 5, 2018. 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 Bermuda-based holding company that provides,
through AGC and its other operating subsidiaries, insurance products to
the U.S. and international public finance, infrastructure and structured
finance markets. More information can be found at: AssuredGuaranty.com.