Assured Guaranty to combine with Sound Point Capital Management

Assured Guaranty announced an agreement with Sound Point Capital Management, pursuant to which Assured Guaranty will contribute its entire equity interest in Assured Investment Management and, with certain exceptions, its related asset management entities to Sound Point. In addition, U.S. insurers Assured Guaranty Municipal Corp. and Assured Guaranty Corp. will engage Sound Point as their sole alternative credit manager to invest $1B over time in alternative credit strategies, including nearly $400M currently managed by AssuredIM as of December 31, 2022. In exchange, Assured Guaranty will receive a 30% ownership interest in the combined business, subject to potential post-closing adjustments. Assured Guaranty acquired AssuredIM in October 2019. AssuredIM will transfer assets under management of approximately $15.2B, including approximately $14.5B of collateralized loan obligations, or CLOs, as of December 31, 2022, to Sound Point upon completion of the transaction. As a result, Sound Point, which had approximately $21.4B in CLOs and $32B in total AUM as of December 31, 2022, is expected to become the fifth largest CLO manager by AUM in the world. Assured Guaranty expects the transaction to be immediately accretive to earnings per share, return on equity and book value per share, as well as the company’s adjusted operating shareholders’ equity per share and adjusted book value per share. It also plans to continue its current capital management program, including share repurchases. The transaction is expected to be completed in the third quarter of 2023, subject to certain customary closing conditions, including the receipt of certain consents and regulatory approval. Following closing, Frederico will be appointed to the Sound Point Board of Managers. Assured Healthcare Partners LLC will remain an independent healthcare investment management firm and is not part of the Sound Point transaction. Carried interest associated with Assured Healthcare Partners funds and another single-asset fund in which Assured Guaranty is invested will be retained by Assured Guaranty, as well.