Assured Guaranty Gets $1 Billion Capital Commitment from Wilbur Ross
Wilbur Ross, the billionaire investor that last year snapped up the servicing platform of failed mortgage lender American Home Mortgage, has committed up to $1 billion in capital to AAA-rated bond guarantor Assured Guaranty Ltd. WL Ross & Co. LLC will purchase $250 million in common shares of Assured, with a company option to purchase up to an additional $750 million should the monoline decide to add further capital within the next 12 months, the bond insurer said in a press statement Friday. The investment is an opportunistic one by Ross, rather than an investment into a troubled monoline, and is contingent on Assured maintaining its AAA-rated status. "We believe that Assured has an excellent opportunity during this time of uncertainty in the financial markets to provide investors with credit enhancement products in both the public and structured finance markets," Ross said. Assured has managed to steer clear of much of the ratings stress that has plagued most of the bond insurance industry, with all three rating agencies affirming the company's AAA rating in the past few months; Assured did not underwrite meaningful volumes of ABS CDOs in recent years, as it exited the mortgage guaranty business in 2005. As the bond insurance industry faces historic upheaval, some insurers are seeing an opportunity to build market share as industry leaders MBIA and Radian falter amid questionable structured finance deals. Ross' investment comes as Assured looks to capitalize on its relatively more stable ratings presence, and as Warren Buffet's Berkshire Hathaway has recently entered the market for munipal bond insurance. For more information, visit http://www.assuredguaranty.com.