Assured Guaranty (AGO) Reaches Agreement to Acquire Dexia for $722 Million

November 14, 2008 8:11 AM EST

Assured Guaranty Ltd. (NYSE: AGO) has reached a definitive agreement with Dexia SA (“Dexia”) to purchase Financial Security Assurance Holdings Ltd. (“FSA”), the parent of financial guaranty insurance company, Financial Security Assurance, Inc. The definitive agreement provides that Assured will be fully protected against exposure to FSA’s Financial Products (“FP”) segment, which includes its guaranteed investment contract business.

The purchase price to be paid by Assured is $722 million, consisting of $361 million in cash and 44,567,000 common shares of Assured. The purchase price is approximately 37.5% of FSA’s September 30, 2008 shareholders’ equity adjusted for the FP Segment and certain other accounting items. As part of this transaction, Assured will also be assuming $730 million of FSA’s outstanding debt. The acquisition is not subject to a financing contingency. Assured expects to finance the cash portion of the acquisition with the proceeds of a public equity offering. Assured has received a back-up commitment from funds affiliated with WL Ross & Co. LLC to fund the cash portion of the purchase price with the purchase of newly issued common shares.

Assured Guaranty Ltd. (Assured Guaranty) is a Bermuda-based holding company that provides, through its operating subsidiaries, credit enhancement products to the public finance, structured finance and mortgage markets.[SM]

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• Wilbur Ross

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