Assured Guaranty Corp. Completes Acquisition of CIFG Assurance North America, Inc.
Public Company Information:
HAMILTON, Bermuda--(BUSINESS WIRE)--Assured Guaranty Ltd. (NYSE:AGO) (together with its subsidiaries, Assured Guaranty), the leading provider of financial guaranty insurance, 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. 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’ equity1 and adjusted book value1 at the acquisition date. It is also expected to be accretive to future operating earnings per share1 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.
For additional information about the acquisition, please visit the Assured Guaranty website at AssuredGuaranty.com/CIFG.
1. Operating earnings, operating shareholders’ equity and adjusted book value are non-GAAP financial measures. The most directly comparable GAAP financial measures are net income for operating earnings, and shareholders’ equity for operating shareholders’ equity and adjusted book value. An explanation of these non-GAAP financial measures may be found in the most recent Equity Presentation, Fixed Income Presentation and Assured Guaranty Ltd. Financial Supplement in the Investor Information section of the Company’s website at AssuredGuaranty.com.
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 adverse developments in the acquired portfolio, 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 July 1, 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.
AGC is a Maryland-domiciled insurance company regulated by the Maryland Insurance Administration and licensed to conduct financial guaranty insurance business in all 50 states of the United States, the District of Columbia and Puerto Rico. AGC commenced operations in 1988. AGC is a wholly owned, indirect subsidiary of Assured Guaranty Ltd., a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol AGO. The operating subsidiaries of Assured Guaranty Ltd. 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.