WL Ross acquires up to $1 billion of Common Stock of Assured Guaranty
Clients WL Ross & Co. LLC
Jones Day represented WL Ross & Co. LLC in its purchase of common stock of Assured Guaranty, Ltd. (Ago). $250 million was acquired at $23.47 per share, for a total purchase of 10.7 million shares, representing 11.7% of the economic ownership of Ago. The $750 million balance is available at the option of Ago for one year from the date of the closing of the $250 million investment.
Ago is a so-called monoline insurer. However, unlike some other companies in its business, it has minimal exposure to the sub-prime mortgage market. The WL Ross & Co. commitment should provide Ago was a significant competitive advantage to write new direct and reinsurance business.
This transaction is another example of how private equity can provide needed capital in a time of market turbulence. WL Ross & Co.'s Ago investment follows its acquisition of American Home Mortgage servicing platform in 2007 for about $475 million and was announced just prior to WL Ross's $1.1 billion acquisition of Option One's mortgage servicing business, which was announced on March 17, 2008.