The merger is expected to create a more robust capital structure and diversify the insured portfolio’s credit profile. Credit: fizkes/Shutterstock.

Assured Guaranty (AG) has announced the merger of Assured Guaranty Municipal Corporation (AGM) into its operations. 

While the financial specifics of the deal remain undisclosed, the merger is expected to create a more robust capital structure and diversify the insured portfolio’s credit profile. 

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This amalgamation of AGM with AG is anticipated to bolster Assured Guaranty’s strategies for achieving its business objectives.  

The merged entity will have a larger, more diversified insured portfolio, an expanded investment portfolio and a strengthened capital base.  

This restructure is designed to enhance the company’s efficiency and increase its claims-paying resources. 

AGM has been the financial guaranty insurance company for Assured Guaranty, covering a range of US and international public and infrastructure finance obligations.  

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AG, on the other hand, has focused on providing risk and capital management solutions across various sectors including insurance and banking, and has been involved in acquiring or reinsuring insured portfolios from other financial guaranty insurers. 

Both AGM and AG have portfolios that include public and infrastructure finance as well as structured finance exposures.  

The merger will not change the domiciliation of AG, which will remain in Maryland, US, with the Maryland Insurance Administration continuing as its primary regulator.  

Post-merger, AGM-insured securities will automatically become guaranteed obligations of the combined entity, AG. 

Additionally, AGM’s subsidiaries, Assured Guaranty UK and Assured Guaranty (Europe), will be integrated as subsidiaries under AG, maintaining their current operational status.  

Assured Guaranty president and CEO Dominic Frederico said: “We see this merger as beneficial for all our stakeholders. It will result in more efficient utilisation of the combined capital of the two companies, and it will simplify the administration and eliminate duplicative expenses of Assured Guaranty’s US financial guaranty operations.  

“Over its nearly 40 years in the financial guaranty business, Assured Guaranty has continually evolved, constantly looking for ways to better serve our customers and grow our business. This merger further positions us to achieve those goals.” 

The merger is due to take effect on 1 August 2024.