Assured Guaranty Is Paid $360 Million in Cash Plus Assigned Future Installment Premiums
Assured Guaranty Ltd. (NYSE: AGO) (together with its subsidiaries,
Assured Guaranty), announced the completion of the previously disclosed
reinsurance transaction with Syncora Guarantee Inc. (SGI), a wholly
owned subsidiary of Syncora Holdings Ltd. (SHL). Under the terms of the
transaction, Assured Guaranty Corp. (AGC) is reinsuring, generally on a
100% quota share basis, SGI-insured financial guaranty insurance
policies. The transaction also included the commutation of a book of
business previously ceded to SGI by Assured Guaranty Municipal Corp.
(AGM).
The transaction totaled approximately $13 billion in net par amount. As
consideration for the transaction, AGC received approximately $360
million in cash plus assigned future installment premiums estimated to
total $59 million on a present value basis. Included in those amounts
are GAAP expected losses to be paid of approximately $130 million for
RMBS transactions.
Additionally, on behalf of SGI, AGC is providing administrative services
that include claims processing, surveillance, risk management services
and certain other functions for the reinsured portfolio.
"We are pleased to have brought another legacy bond insurance portfolio
onto the Assured Guaranty balance sheet to generate additional future
premium revenue," commented Dominic Frederico, President and Chief
Executive Officer of Assured Guaranty. "Like our previous acquisitions
of financial guarantors or of their insured portfolios, this transaction
helps to strengthen Assured Guaranty in terms of both financial strength
and profitability."
The reinsured portfolio consists predominantly of public finance and
infrastructure obligations that meet AGC's new business underwriting
criteria, and it includes no Puerto Rico exposure. AGC is contractually
obligated to administer transactions and pay claims on SGI’s behalf, but
AGC has no direct obligation to bondholders. As a result, ratings of the
reinsured transactions will continue to reflect only SGI’s financial
strength.
More information about the transaction can be found on assuredguaranty.com/syncora-policies
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 credit deterioration of reinsured
policies, administrative errors with respect to claim payments, 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 June 1, 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.