Assured Guaranty (AGC) has signed an agreement to acquire CIFG Holding, the parent of financial guaranty insurer CIFG Assurance North America (CIFG NA), for $450m.
Under the deal, CIFG NA will merge into AGC, and will operate as surviving entity. Its assets and obligations will become part of AGC, once the deal concludes.
In addition, policies associated with the 2009 reinsurance transaction between CIFG NA and AGC that were not replaced to AGC will become direct obligations of the company.
As of last December, CIFG NA had an insured portfolio of $5.6bn of net par and around $637m of statutory capital.
The deal is expected to increase Assured Guaranty’s statutory capital by up to $325m in this year.
Assured Guaranty president and CEO Dominic Frederico said: "The acquisition will strengthen Assured Guaranty’s franchise by adding a solid book of business that is consistent with our strategic objectives and will also increase AGC’s capital base and policyholders’ surplus."
"Acquisitions are one of our key strategies, and this is our third acquisition of a legacy bond insurer."
Subject to anti-trust and insurance regulatory approvals and other customary closing conditions, the deal is expected to complete in the middle of this year.
Image: Assured Guaranty to acquire CIFG Assurance North America parent firm CIFG Holding. Photo: courtesy of adamr / FreeDigitalPhotos.net.