Assured Guaranty completes Financial Security Assurance acquisition

By Jennifer Chiou

New York, July 1 - Assured Guaranty Ltd. said it completed its acquisition of Financial Security Assurance Holdings Ltd. from Dexia SA.

Assured said in a news release that it has expanded its franchise in the bond insurance industry and increased its capabilities when it comes to the municipal, public infrastructure and structured finance sectors.

Under the terms of the agreement, Assured paid about $546 million in cash and 22.3 million shares.

Dexia will own 13.9% of Assured's issued common shares as a result of this transaction, according to the release.

The transaction excludes FSA's financial products business.

The companies announced the acquisition plans on Nov. 14, 2008. At the time, Assured planned to purchase the New York-based bond insurer in a $722 million deal. Of the purchase price, $361 million was to be in cash and the remainder was planned in the form of 44,567,000 shares. Also as part of the deal, Assured was to assume $730 million of FSA's outstanding debt.

Assured, according to a prior statement, financed the cash portion of the acquisition with proceeds from a public equity offering.

"With this highly accretive acquisition, we have created a compelling value proposition for our customers, shareholders and employees with significant opportunity for growth," Assured chief executive officer Dominic Frederico said in the release.

"Importantly, these are the two companies that have come through the financial crisis in strong capital positions due to their strict underwriting discipline. By continuing to operate them as two separate platforms, we can provide the financial strength, flexibility and product diversity that will help issuers achieve cost-efficient market access and provide investors with increased stability and liquidity."

Frederico also said that Séan W. McCarthy, president and chief operating officer of FSA Holdings, has been named president and chief operating officer of Assured Guaranty US Holdings Inc.

Assured Guaranty 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.

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