Assured Guaranty Municipal Corp. merges into Assured Guaranty

Assured Guaranty Inc. (AG), a company that offers financial guarantees and credit enhancement products, has completed the merger of Assured Guaranty Municipal Corp. (AGM), with AG as the surviving company.

The merger was initially announced on July 8, 2024, and was effective as of August 1, 2024.

With the completion of this transaction, all obligations of AGM are now obligations of AG, and Assured Guaranty UK Limited and Assured Guaranty (Europe) SA are now subsidiaries of AG.

Both companies hold identical ratings from S&P Global Ratings, Kroll Bond Rating Agency, and Moody’s Ratings, so the merger should not impact Assured Guaranty’s strong financial strength ratings.

At the time of merger, AG and AGM had identical financial strength ratings with stable outlooks: AA+ at Kroll Bond Rating Agency, AA at S&P Global Ratings and A1 at Moody’s Ratings.

Credit rating analysis agency KBRA wrote that it “views the merger and the resultant simplification of the overall organisational structure as creating capital, operational, and regulatory efficiencies, as well as enhancing Assured Guaranty Ltd.’s overall global platform and scale as management continues to position its business to optimise its market position and future growth opportunities.”

The merger of AGM and AG into a single insurance company will create a larger capital pool for supporting insurance policies, resulting in a more diversified insured portfolio.

The new AG will have a larger and more diversified insured portfolio, a bigger investment portfolio, and greater claims-paying resources, creating a more efficient capital structure.

Dominic Frederico, President and CEO, commented: “As we said when we announced the plan to form the new AG, this merger creates a larger scale company with a greater capital base to support each of our insured obligations and a more diversified insured portfolio. It also simplifies administrative processes and our brand marketing.

“All this positions us even better for industry leadership and future growth.”

AG will continue to be domiciled in Maryland, with the Maryland Insurance Administration (MIA) as its primary regulator.

The MIA has also approved a $300 million stock redemption (sometimes described as a “special dividend”) by the combined company, In connection with the merger, which is expected to be effectuated shortly following the transaction.

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