AGC, a subsidiary of the Bermuda-based insurer Assured Guaranty, has acquired CIFG Holding, the parent of financial guaranty insurer CIFG Assurance North America (CIFG).
CIFG will merge into AGC, with all of the insurance policies issued by CIFG becoming 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.
Dominic Frederico, president and chief executive officer of Assured Guaranty, said: “We are pleased to have completed our third acquisition of a legacy bond insurer, adding $5.5 billion to Assured Guaranty’s insured portfolio.
“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.
“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.”
CIFG had approximately $644 million of statutory capital, as of March 31 2016. AGC paid $450.6 million in cash to acquire CIFG.
Assured Guaranty, AGC, M&A, CIFG Holding, CIFG Assurance North America, M&A, Insurance, Reinsurance, Bermuda, North America