Answers to Questions About AGC's Acquisition of Radian Asset Assurance Inc.
May 7, 2015
Assured Guaranty Corp. (AGC) acquired Radian Asset Assurance Inc. (Radian Asset) from Radian Guaranty Inc. on April 1, 2015. Radian Asset immediately merged with, and into, AGC, with AGC as the surviving company. As a result, the assets and obligations (including insurance policies) of Radian Asset have become the assets and obligations of AGC.
Select one of the following links to view the appropriate information:
Q&A for Issuers and Trustees of Securities Insured by Radian Asset
Q&A for Investors in Securities Insured by Radian Asset
Q&A for Assured Guaranty Shareholders
List of U.S. Public Finance CUSIPs Insured by Radian Asset
Q&A for Issuers and Trustees of Securities Insured by Radian Asset
Do we need to do anything to make sure our Radian Asset insurance policies are covered by AGC?
No. Because Radian Asset has merged with and into AGC, and AGC is the surviving company, by operation of law, Radian Asset’s outstanding insurance policies and obligations have become outstanding insurance policies and obligations of AGC.
We are required to make regular financial disclosures to the guarantor. Where do we send them now?
Beginning April 1, 2015, issuers who previously provided financial disclosures to Radian Asset should provide those disclosures to AGC. Please refer to the disclosure guidelines on the Assured Guaranty website at AssuredGuaranty.com/businesses/us-public-finance/guidance-for-issuer-disclosure.
Where can I find the documents evidencing the merger of Radian Asset into AGC?
A copy of the Articles of Merger filed with the Department of Assessments and Taxation of the State of Maryland is available here.
A copy of the Agreement and Plan of Merger filed with the Department of Financial Services of the State of New York is available here.
Whom do I contact to make a claim or request a waiver or consent?
Please contact the appropriate member of our Surveillance Department based on the type of security:
Tax-Backed, Lease, Tax Allocation, Special Assessment
Karen Hofstein, khofstein@assuredguaranty.com, 212.339.3419
Water And Sewer, Public Power, Gas and Electric, Resource Recovery
Barbara Boulle, bboulle@assuredguaranty.com, 212.339.3504
Airport, Port, Mass Transit Fare Box, Parking Garage, Toll Road and Bridge
Valery Marfitsin, vmarfitsin@assuredguaranty.com, 212.339.3531
Healthcare
Victor Chu, vchu@assuredguaranty.com, 212.339.3556
Housing Bonds, Student Loan Bonds
Geoff Durno, gdurno@assuredguaranty.com, 212.339.3527
Public and Private University, Private School
Karen Hofstein, khofstein@assuredguaranty.com, 212.339.3419 or
Andreea Verfaillie, averfaillie@assuredguaranty.com, 212.261.5536
RMBS
Errol Uhr, euhr@assuredguaranty.com, 212.339.3476
Other Structured Finance
Steven Tremblay, stremblay@assuredguaranty.com, 212.339.3516
Q&A For Investors in Securities Insured by Radian Asset
Are my bonds or notes still insured?
Yes. AGC has acquired Radian Asset’s entire insured portfolio as of April 1, 2015, and has the same responsibility to meet obligations under Radian Asset’s outstanding insurance policies as Radian Asset had before the merger.
Are there any changes to my insurance policy?
No. The insurance policies remain in full force and effect and have the same terms as when they were issued. The only difference is that claims, if any, will be paid by AGC.
Is my credit protection as strong as it was before the merger?
We believe it is stronger. AGC has a proven business model and long track record of success. Your insurance policy is backed exclusively by AGC’s claims-paying resources, which were $3 billion prior to the merger, and AGC reported more than $70 million of investment income in 2014.
AGC is an operating unit of Assured Guaranty, the leading provider of financial guaranty insurance. Including AGC, Assured Guaranty has $12 billion of claims-paying resources and annual investment income of approximately $400 million. Assured Guaranty has provided municipal bond insurance and other financial guarantees for three decades and has the financial guaranty industry’s largest surveillance department to monitor the underlying credit quality of the obligations it insures.
Does the rating of my insured securities change?
Radian Asset insured securities have been upgraded by S&P to AA, the financial strength rating S&P assigns to AGC. The only exception would be securities already rated AA or higher based on S&P’s rating of the underlying credit.
Similarly, Radian Asset insured bonds have been upgraded by Moody’s to A3, the financial strength rating Moody’s assigns to AGC. Again, the exception would be bonds already rated A3 or higher based on Moody’s rating of the underlying credit.
How does the merger affect the market value and market liquidity of my bonds?
The effect should be positive, as we expect the Radian Asset-insured bonds to trade similarly to bonds insured by AGC. Demand for Assured Guaranty-insured bonds has been growing, and the market provides strong liquidity, with $400 million of average daily trading volume for Assured Guaranty- insured bonds.
Where can I obtain more information about AGC and Assured Guaranty?
This website contains extensive information about Assured Guaranty and AGC. The Investor Information section contains Financial Supplements and GAAP and statutory financial statements for Assured Guaranty on a consolidated basis (http://assuredguaranty.com/investor-information/by-company/assured-guaranty-ltd) and for AGC (http://assuredguaranty.com/investor-information/by-company/agc).
I have specific questions about my securities. Where should I direct them?
Please email our Investor Relations department at ir@assuredguaranty.com.
Q&A for Assured Guaranty Shareholders
How does the Radian Asset transaction affect the value of Assured Guaranty as a company?
The acquisition increases AGC’s capital base and policyholders’ surplus, and the transaction is accretive to Assured Guaranty’s earnings, operating shareholders’ equity and adjusted book value.
What did AGC pay for Radian Asset and what did it acquire for that amount?
AGC paid $804.5 million in cash, after certain adjustments, to acquire Radian Asset. As of December 31, 2014, Radian Asset’s statutory capital was approximately $1.3 billion. AGC acquired Radian Asset’s entire insured portfolio, which had a statutory net par outstanding of approximately $13.9 billion as of February 28, 2015.