Assured Completes CIFG Assurance Acquisition
Assured Guaranty Ltd. announced today that its subsidiary Assured Guaranty Corp. [AGC] acquired CIFG Holding Inc., the parent of financial guaranty insurer CIFG Assurance North America, Inc. [CIFG] in accordance with the agreement announced on April 13, 2016.
“On or about July 5, 2016, CIFG will merge with and into AGC, with AGC as the surviving company. After the merger, all insurance policies issued by CIFG will become direct insurance obligations of AGC,” the company said.
“This includes $2.7 billion of CIFG public finance and infrastructure insurance policies assumed by AGC in 2009 that were not novated to AGC following that reinsurance transaction. Between July 1, 2016 and the date that CIFG merges into AGC, CIFG will operate as an Assured Guaranty subsidiary.”
“We are pleased to have completed our third acquisition of a legacy bond insurer, adding $5.5 billion to Assured Guaranty’s insured portfolio,” said Dominic Frederico, President and CEO of Assured Guaranty.
“Much like our previous acquisitions of Financial Security Assurance and Radian Asset Assurance, this acquisition will strengthen Assured Guaranty’s franchise by adding a solid book of financial guaranty business and will also increase AGC’s shareholders’ equity and statutory capital.
“This transaction will strengthen CIFG-insured bondholders’ security and enhance the liquidity of their bonds by providing the financial strength, protection and market acceptance of AGC.”
The CIFG acquisition is expected to be accretive to Assured Guaranty’s operating shareholders’ equity and adjusted book value at the acquisition date. It is also expected to be accretive to future operating earnings per share and, subject to mark-to-market adjustments, earnings per share.
“We appreciate the responsiveness and timely review by both the New York State Department of Financial Services and the Maryland Insurance Administration in diligently reviewing this multi-step transaction in just two-and-a-half months from the date of its announcement and, by doing so, permitting a significant benefit to the policyholders of both CIFG and AGC,” said Mr. Frederico.
As of March 31, 2016, CIFG had approximately $644 million of statutory capital. AGC paid $450.6 million in cash to acquire CIFG.
