CIFG Holding, Ltd., the holding company for CIFG's financial guaranty subsidiaries, has reached an agreement to commute approximately $12 billion in troubled credit swaps and reinsure $13 billion of municipal bonds. The transactions were announced in a press release by CIFG and a news release from the New York Insurance Department. According to New York Superintendent Eric Dinallo, the result will be that the bonds are novated to Assured Guaranty Corp., with the municipal bonds going from junk bond to highest investment grade rating, leaving CIFG as a solvent bond insurer in a position to pay claims on its remaining policies. The consideration for the transactions include cash payment and equity consideration. The result is a change in the controlling shareholders of CIFG, with changes in senior management expected.
This post written by Rollie Goss.