Assured Guaranty Completes Acquisition of BlueMountain Capital Management

Category:

Tuesday, October 1, 2019 4:20 pm EDT

Dateline:

HAMILTON, Bermuda

Public Company Information:

NYSE:
AGO
"This transformative transaction combines two culturally compatible companies that have complementary strengths"

HAMILTON, Bermuda--(BUSINESS WIRE)--Assured Guaranty Ltd. (together with its subsidiaries, Assured Guaranty), the leading financial guaranty insurance company, announced that its subsidiary Assured Guaranty US Holdings Inc. (AGUS) has completed the acquisition of alternative asset management firm BlueMountain Capital Management, LLC (BlueMountain), on substantially the same terms disclosed on August 7, 2019, including the purchase of all of the outstanding equity interests in BlueMountain and its associated entities for a purchase price of approximately $160 million. Of the approximately $160 million purchase price, $3 million is being withheld and will be paid if a particular consent is received within the two months following the closing.

“This transformative transaction combines two culturally compatible companies that have complementary strengths,” said Assured Guaranty President and CEO Dominic Frederico. “We expect it to significantly benefit Assured Guaranty’s shareholders and policyholders by furthering our goal of leveraging our capital through business diversification while continuing our share repurchase program and supporting growth at BlueMountain. Assured Guaranty is now not only the world’s leading financial guarantor but also, through BlueMountain, a respected alternative asset manager with a highly ranked position in the collateralized loan obligation (CLO) market. BlueMountain diversifies Assured Guaranty’s business profile by providing a fee-based revenue source to complement our risk-based premium revenues, and gives us an in-house platform to generate improved investment returns that may unlock greater dividend potential for our insurance companies. At the same time, Assured Guaranty is supporting BlueMountain’s growth through an infusion of working capital and an allocation of our investment portfolio to BlueMountain-managed investment vehicles.”

BlueMountain is an alternative asset management firm with $18.9 billion in assets under management (AUM). It is the 18th largest global CLO manager by AUM1 and also manages long-duration opportunity funds and relative value hedge funds.

The purchase price was paid in cash, and Andrew Feldstein separately agreed to purchase $22.5 million of Assured Guaranty common shares during the course of the next two months to evidence his commitment to Assured Guaranty. Mr. Feldstein, a co-founder of BlueMountain, has joined Assured Guaranty as Chief Investment Officer and Head of Asset Management and will remain Chief Executive Officer and Chief Investment Officer of BlueMountain.

Mr. Feldstein said, “By becoming a member company of the Assured Guaranty group, BlueMountain has gained greater financial stability and duration of capital, along with access to the experience and strategic outlook of the long-time leader in its credit-intensive market. We intend to expand Assured Guaranty’s asset management capabilities and to make the most of the synergies inherent in our companies’ mutual strengths in credit, asset-backed finance, infrastructure and healthcare.”

Goldman Sachs & Co. LLC and Greensledge Capital Markets LLC served as financial advisors, and Mayer Brown LLP acted as legal advisor, to Assured Guaranty. Barclays Capital Inc. served as financial advisor, and Purrington Moody Weil LLP acted as legal advisor, to BlueMountain Capital Management.

1 Source: CreditFlux CLO manager rankings as of second quarter 2019

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, the impact of Assured Guaranty's acquisition of BlueMountain and its associated entities on Assured Guaranty and its relationships with its investors, regulators, rating agencies, employees and the obligors it insures and on the business of BlueMountain and its relationships with its clients and employees; the failure of Assured Guaranty to successfully integrate the business of BlueMountain; the possibility that acquisitions or alternative investments made by Assured Guaranty, including its BlueMountain Acquisition, do not result in the benefits anticipated or subject Assured Guaranty to unanticipated consequences; difficulties executing Assured Guaranty’s business strategy; 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 October 1, 2019. 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 publicly traded Bermuda-based holding company whose operating subsidiaries provide credit enhancement products to the U.S. and international public finance, infrastructure and structured finance markets and alternative asset management services to institutional investors. More information on Assured Guaranty and its subsidiaries can be found at AssuredGuaranty.com.

Contact:

Assured Guaranty Contacts:
Robert Tucker, 212-339-0861
Senior Managing Director, Investor Relations and Corporate Communications
rtucker@agltd.com

Media:
Ashweeta Durani, 212-408-6042
Vice President, Corporate Communications
adurani@agltd.com

BlueMountain Capital Management Contact:
Media:
Tom Vogel, 646-808-3663
Dukas Linden Public Relations
bmcm@dlpr.com