Assured Guaranty Complete Acquisition Of MBIA

January 11, 2017

Bermuda-based Assured Guaranty Ltd. [together with its subsidiaries, Assured Guaranty] announced that its subsidiary Assured Guaranty Corp. [AGC] completed its acquisition of MBIA UK Insurance Limited [MBIA UK], the European operating subsidiary of MBIA Insurance Corporation, in accordance with the agreement announced on September 29, 2016.

“Assured Guaranty currently intends to maintain MBIA UK as a subsidiary of AGC. It will rebrand MBIA UK as part of the Assured Guaranty group within the next several months,” the company said.

“Assured Guaranty is also actively working to combine MBIA UK with its other affiliated European insurance companies. Any such combination will be subject to regulatory and court approvals; as a result, Assured Guaranty cannot predict when, or if, such a combination will be completed.”

“We are pleased to have completed our fourth acquisition of a legacy bond insurer, which has further diversified Assured Guaranty’s insured portfolio by adding approximately $13 billion [£10 billion] of predominantly European infrastructure transactions,” said Dominic Frederico, President and CEO of Assured Guaranty.

“We expect this acquisition to be accretive to Assured Guaranty’s operating earnings per share, operating shareholders’ equity and adjusted book value.”

“This acquisition significantly expands Assured Guaranty’s presence in the European infrastructure market at a time when we are seeing increasing opportunities and a strong pipeline of transactions,” said Nick Proud, CEO of Assured Guaranty [Europe] Ltd. [AGE].

“It signals our ongoing commitment to the European marketplace and gives MBIA UK bondholders the management resources and surveillance capabilities of an active financial guarantor with proven durability. It is our intention to combine MBIA UK with our European portfolio to create a single balance sheet and rating.”

As of September 30, 2016, using current currency exchange rates, MBIA UK had a guaranteed portfolio of approximately $13 billion [£10 billion] of net par and approximately $470 million [£382 million] of GAAP book value.

As consideration for the outstanding shares of MBIA UK plus $23 million in cash, AGC exchanged all its holdings of notes issued in the Zohar II 2005-1 transaction. AGC’s Zohar II 2005-1 notes had a total outstanding principal of approximately $347 million as of September 30, 2016. MBIA Insurance Corporation insures all of the notes issued in the Zohar II 2005-1 transaction.

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