Business & Finance
Business and Finance
Business and Finance
Thu, January 22, 2009 Assured Guaranty Corp. Closes Reinsurance Transaction with CIFG Assurance North America, Inc.
NEW YORK--([ BUSINESS WIRE ])--Assured Guaranty Corp. ("Assured"), the principal direct financial guaranty subsidiary of Assured Guaranty Ltd. (NYSE:AGO), announced today the closing of the reinsurance transaction with CIFG Assurance North America, Inc. ("CIFG NA") that was previously announced on October 23, 2008. In addition, pursuant to a separate agreement, effective immediately, Assured has been appointed by CIFG NA as its exclusive agent to provide all administrative and other services with respect to the CIFG NA's entire U.S. public finance portfolio. On behalf of CIFG NA, Assured will be responsible for processing all claims for losses from CIFG NA's U.S. public finance policies as well as for providing surveillance, other risk management services and other administrative functions for this portfolio. For additional information regarding the administrative services to be provided by Assured, CIFG NA policyholders should review the notice posted on Assured's website at [ www.assuredguaranty.com ].
"We are pleased to close this transaction which provides CIFG NA's policyholders with the financial strength and protection of Assured," commented Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Ltd. "In these turbulent times it is important that the market recognizes the necessity and value of financial guaranty insurance. Transactions such as these reinforce the benefits and security that financial guaranties provide to issuers and investors."
Assured is providing reinsurance to CIFG NA with respect to certain U.S. public finance and infrastructure policies (the "covered policies") covering approximately $13 billion of par outstanding. The covered policies principally consist of investment grade credits and do not contain any below investment grade credits, any credit default swaps or any credits for which a loss reserve had been established by CIFG NA. In connection with the reinsurance, Assured has received unearned upfront premium reserves of approximately $85 million.
As previously announced, CIFG NA and Assured have agreed to work together after the closing of the reinsurance transaction to secure written agreements from the holders of each covered policy to transfer by novation the covered policy from CIFG NA to Assured. Until novated, all covered policies will remain direct guarantee obligations of CIFG NA. The novation process for each covered policy will be determined in conjunction with representatives for each underlying insured credit based on the applicable legal requirements and the particular facts and circumstances of each such insured credit. There can be no assurance as to the timing of the novation process or whether an insured credit will be successfully novated. Questions concerning the novation process should be directed to CIFG NA's General Counsel, Michael Knopf at 212-909-0419.
Assured Guaranty Corp. is a leading provider of financial guaranty insurance in the U.S. and international public finance, structured finance and mortgage-backed securities markets. Assured Guaranty Corp. is rated AAA (stable) by Fitch Ratings Inc. and Standard & Poor's and Aa2 (stable) by Moody's Investor Service. Assured Guaranty Corp. is licensed in all 50 states, the District of Columbia and Puerto Rico.
Assured Guaranty Ltd. (the "Company") is a Bermuda-based holding company. Its operating subsidiaries provide credit enhancement products to the U.S. and international public finance, structured finance and mortgage markets. More information can be found at [ www.assuredguaranty.com ].
Any forward-looking statements made in this press release reflect the Company's current views with respect to future events and financial performance 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. For example, the Company's forward-looking statements, including its statements regarding the novation of the covered policies, could be affected by a significant reduction in the amount of reinsurance ceded by one or more of our principal ceding companies, rating agency action such as a ratings downgrade, difficulties with the execution of the Company's business strategy, contract cancellations, developments in the world's financial and capital markets, more severe or frequent losses associated with products affecting the adequacy of the Company's loss reserve, changes in regulation or tax laws, governmental actions, natural catastrophes, the Company's dependence on customers, decreased demand or increased competition, loss of key personnel, technological developments, the effects of mergers, acquisitions and divestitures, changes in accounting policies or practices, changes in general economic conditions, other risks and uncertainties that have not been identified at this time, management's response to these factors, and other risk factors identified in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
