Assured Guaranty Corporation (AGC), a subsidiary of Bermuda-based Assured Guaranty, has agreed to acquire MBIA UK Insurance (MBIA UK), the European operating subsidiary of MBIA Insurance Corporation.
Under the agreement, AGC will deliver to MBIA all of the notes issued in the Zohar II 2005-1 transaction that AGC holds, and the seller, MBIA UK (Holdings), will transfer to AGC all of the outstanding shares of MBIA UK plus $23 million in cash.
The Zohar notes to be transferred had, as of June 30, 2016, a total outstanding principal of approximately $347 million. MBIA Insurance Corporation insures all of the notes issued in the Zohar II 2005-1 transaction. The transaction is expected to close in early January 2017.
“This agreement furthers our strategy of acquiring legacy financial guaranty companies. In this case, we will be acquiring a seasoned insured portfolio of almost exclusively European transactions and the capital resources to support those exposures,” said Dominic Frederico, president and chief executive officer (CEO) of Assured Guaranty.
“We expect this transaction to be accretive to Assured Guaranty’s earnings per share, operating shareholders’ equity and adjusted book value.”
Nick Proud, CEO of Assured Guaranty Europe (AGE), said: “This is a landmark transaction that will significantly increase the size of Assured Guaranty’s European insured portfolio, creating a total non-US portfolio of approximately $45 billion.
“It also sends a strong message to the market that the monoline model, and Assured Guaranty specifically, is an active source of infrastructure funding solutions. AGE is currently mandated on a number of primary UK transactions, and we expect this acquisition to add further momentum to our expanding European opportunities.”
Assured Guaranty Corporation, Bermuda, MBIA UK Insurance, Reinsurance UK, Assured Guaranty Europe, Europe, Insurance, M&A, Dominic Frederico, Nick Proud