Muni insurer Assured Guaranty Corp. has acquired Radian Asset Assurance Inc.
AGC paid $804.5 million in cash for the company. Radian Asset’s capital, as of Dec. 31, 2014, was approximately $1.3 billion. As of Feb. 28, 2015, its statutory net par outstanding was about $13.9 billion.
AGC expects S&P to upgrade Radian Asset’s insured securities to “AA,” the same as AGC, with the exception of securities already rated “AA” or higher based on S&P’s rating of the underlying credit.
Additionally, AGC expects Moody’s to upgrade Radian’s insured bonds to “A3,” the financial strength rating Moody’s assigns to AGC, with the exception of bonds already rated “A3” or higher based on Moody’s rating of the underlying credit.
Radian Asset, which had strayed from its muni business to insure other more exotic securities, faltered after the financial crisis beginning in late 2007 and its rating suffered. Last year, Radian hired Goldman Sachs to gauge interest in its financial guaranty business. An agreement to sell was announced on Dec. 23, 2014.