Assured Guaranty Ltd., a newly created holding company and subsidiary of ACE Ltd., has filed an S-1 with the Securities and Exchange Commission for the sale of 49,000,000 shares of common stock with a target price of $18 to $20 per share. With the IPO, Assured Guaranty is looking to expand both its direct financial guaranty and financial guaranty reinsurance businesses. In doing so, the company hopes to attain a Aaa' rating from Moody's Investor Service to match its AAA' rating from Standard & Poor's. Moody's currently rates AG at Aa2'.

In an interesting twist, on March 31, Joseph Swain, former CEO of ACE's financial guaranty business, resigned. In his resignation, which was summarized in AG's filing, Swain cited differences with management over new business strategy and the ability to execute that strategy due to his concerns about the relevant experience of management, staffing levels and corporate culture.

Assured Guaranty will acquire two of ACE's primary operating units, Assured Guaranty Corp. and Assured Guaranty Re International, as well as several smaller units. As of December 31, 2003, structured finance accounted for $21.6 billion of those entities' direct insurance net par outstanding and $13.3 billion of their reinsurance net par outstanding. Total net par outstanding stood at $87.5 billion. Of the structured finance component, CDOs accounted for 46.1%, consumer receivables for 26.9%, commercial receivables for 15.1%, other structured finance for 5.3% and single-name corporate credit derivatives for 6.6%.

Banc of America Securities, Goldman Sachs and Citigroup are leading the IPO. Deutsche Bank Securities, JPMorgan, Merrill Lynch, UBS, Wachovia Securities, William Blair & Company and Keefe, Bruyette & Woods are co-managing the deal. The asking price is expected to range from $18 to $20 per share.

ACE will hold its first-quarter earnings conference call this Wednesday. A Webcast of the call will be available at the company's Web site at

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