Form 8-K ASSURED GUARANTY LTD For: Apr 13
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
___________________________
Current Report
Pursuant To Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report — April 13, 2016 (Date of earliest event reported: April 12, 2016)
___________________________
ASSURED GUARANTY LTD.
(Exact name of registrant as specified in its charter)
___________________________
Bermuda | 001-32141 | 98-0429991 |
(State or other jurisdiction) | (State or other jurisdiction) | (I.R.S. Employer of Incorporation Identification No.) |
Assured Guaranty Ltd. 20 Woodbourne Avenue Hamilton HM 08 Bermuda | ||
(Address of principal executive offices) | ||
Registrant’s telephone number, including area code: (441) 279-5700
Not applicable
(Former name or former address, if changed since last report)
___________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On April 12, 2016, Assured Guaranty Corp. (“AGC”), an indirect wholly owned subsidiary of Assured Guaranty Ltd. (“Assured Guaranty”) entered into an agreement and plan of merger (the “Merger Agreement”) with Cultivate Merger Corp., a wholly owned subsidiary of AGC (“Merger Corp.”), and CIFG Holding Inc. (“CIFG Holding”), pursuant to which Merger Corp. will merge with and into CIFG Holding with CIFG Holding being the surviving corporation (the “Acquisition”). CIFG Holding is the parent company of CIFG Assurance North America, Inc., a New York domiciled financial guaranty insurance company (“CIFG NA”). As part of the transaction, CIFG NA will merge with and into AGC, with AGC being the surviving company.
Under the terms of the Merger Agreement, AGC has agreed to pay an aggregate of $450 million in cash upon the closing of the Acquisition, subject to certain adjustments. AGC will fund the Acquisition with available cash.
The transaction is subject to customary closing conditions, including receipt of regulatory approvals and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and is expected to be completed mid-2016. CIFG Holding’s stockholders have already approved the Acquisition.
The Merger Agreement contains customary representations, warranties and covenants, including, among others, covenants providing for both parties to use their respective reasonable best efforts to obtain required regulatory approvals and for CIFG Holding to conduct its business in the ordinary course during the period between the execution of the Merger Agreement and the closing of the Acquisition. The representations and warranties do not survive the closing of the Acquisition.
The Merger Agreement contains certain termination rights, including, among others, the right of either party to terminate the Merger Agreement if the Acquisition does not occur by October 12, 2016, subject to the right of either party to extend such date for 45 days to obtain required regulatory approvals.
The foregoing summary of the Merger Agreement and the Acquisition does not purport to be a complete description and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, a copy of which will be filed as an exhibit to Assured Guaranty’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
Item 7.01. Regulation FD Disclosure.
On April 13, 2016, Assured Guaranty issued a press release announcing the execution of the Agreement referred to in Item 1.01 above. A copy of the press release is attached as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated April 13, 2016
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ASSURED GUARANTY LTD.
By: /s/ Robert A. Bailenson
Name: Robert A. Bailenson
Title: Chief Financial Officer
Date: April 13, 2016
[Assured Guaranty Letterhead]
Assured Guaranty to Acquire CIFG Holding Inc., Parent of CIFG Assurance North America, Inc.
Completed Acquisition Will Add $5.6 Billion to Assured Guaranty’s
Insured Portfolio
Hamilton, Bermuda - April 13, 2016 - Assured Guaranty Ltd. (NYSE: AGO) (together with its subsidiaries, Assured Guaranty), the leading financial guaranty insurance company, announced that its subsidiary Assured Guaranty Corp. (AGC) has entered into an agreement to acquire CIFG Holding Inc. (CIFG). CIFG is the parent of financial guaranty insurer CIFG Assurance North America, Inc. (CIFG NA). The acquisition is expected to be completed mid-2016, subject to receipt of anti-trust and insurance regulatory approvals as well as satisfaction of customary closing conditions. CIFG’s stockholders have already approved the acquisition. AGC expects to pay $450 million in cash to acquire CIFG.
As part of the transaction, CIFG NA will merge into AGC, which will be the surviving entity. After this merger, the assets and obligations of CIFG NA will become the assets and obligations of AGC, and the bonds insured by CIFG NA will become insured obligations of AGC and, therefore, receive AGC’s financial strength ratings. Additionally, policies associated with the 2009 reinsurance transaction between CIFG NA and AGC that have not been novated to AGC already will become direct obligations of AGC, and the obligations insured by those policies will receive AGC’s financial strength ratings.
“The acquisition will strengthen Assured Guaranty’s franchise by adding a solid book of business that is consistent with our strategic objectives and will also increase AGC’s capital base and policyholders’ surplus,” said Dominic Frederico, President and CEO of Assured Guaranty.
"Acquisitions are one of our key strategies, and this is our third acquisition of a legacy bond insurer," he added. Assured Guaranty previously acquired Financial Security Assurance Inc. (now Assured Guaranty Municipal Corp.) in 2009 and Radian Asset Assurance Inc. in 2015.
The CIFG acquisition is expected to be accretive to Assured Guaranty’s earnings per share, operating shareholders’ equity and adjusted book value. Additionally, the acquisition should enhance the value and market liquidity of the bonds insured by CIFG NA.
As of December 31, 2015, CIFG NA had an insured portfolio of $5.6 billion of net par and approximately $637 million of statutory capital. Assured Guaranty currently estimates the transaction will increase its statutory capital in 2016 by approximately $300 million to $325 million.
Moelis & Company LLC is acting as financial advisor to Assured Guaranty, and Mayer Brown LLP is acting as its legal advisor.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made in this press release reflect Assured Guaranty’s current views with respect to future events and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. These risks and uncertainties include, but are not limited to, those resulting from Assured Guaranty’s inability to obtain regulatory approval for its proposed acquisition of CIFG Holding; adverse developments in the acquired portfolio; and other risks and uncertainties that have not been identified at this time, management’s response to these factors, and other risk factors identified in Assured Guaranty’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of April 13, 2016. Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Contact:
Investor Relations:
Robert Tucker, 212-339-0861
Managing Director, Investor Relations and Corporate Communications
Media:
Ashweeta Durani, 212-408-6042
Vice President, Corporate Communications
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