Business World

Financier Wilbur Ross will invest as much as $1 billion in Bermuda-based reinsurer Assured Guaranty Ltd, the bond insurer said Friday.

WL Ross & Co. will purchase $250 million worth of common stock and commit to buying an additional $750 million shares at the company’s option, and Ross will be appointed to Assured Guaranty’s board.

Bond insurers have struggled to maintain "AAA" ratings as bonds they back lose value amid the credit crisis. Assured Guaranty has been seen as one of the strongest in the sector, despite some exposure to the weakening credit markets.

The closing of the initial $250 million investment is subject to regulatory approvals; any subsequent investments will require shareholder approval, which the company will request at its 2008 annual meeting.

In order to draw on the $750 million commitment, Assured Guaranty (AGO) must maintain ‘AAA’ (stable) ratings for itself, and ‘AA’ ratings for Assured Guaranty Re Ltd http://us-no-fax-payday-loans.com. from credit ratings agencies Standard & Poor’s, Moody’s (MCO) and Fitch. Furthermore, the credit quality of its financial guaranty portfolio and investment portfolio must not decline significantly.

Merrill Lynch & Co. acted as financial adviser to Assured on the deal. 

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