The two financial guarantors who have remained relatively spared from the crisis are now coming together.
Assured Guaranty announced agreement with Dexia SA, the parent company of
Financial Security Assurance Holdings (FSA), to buy FSA for $722 million, consisting of $361 million in cash and 44,567,000 common shares of Assured.
The deal will be financed with a public equity offering by Assured, who has also received a back-up commitment from funds affiliated with WL Ross & Co. to fund the cash portion of the transaction.
In the deal, Assured said it will be fully protected against exposure to FSAs Financial Products segment, which includes its guaranteed investment contract business.
The transaction closing will be dependent on shareholder approval as well as a confirmation from Standard & Poors, Moodys Investors Services and Fitch Ratings that the acquisition of FSA would not have a negative impact on Assureds or FSAs financial strength ratings. The deal is expected to close in 1Q09.
Banc of America Securities served as financial advisor on the transaction and Mayer Brown is the legal counsel.