NEW YORK (Reuters) - Wilbur Ross agreed to buy up to $1 billion in shares of bond insurer Assured Guaranty Ltd , the company said on Friday, giving the billionaire investor a key foothold in the struggling market.
Under the agreement, WL Ross & Co LLC, the private equity firm founded by Ross, will purchase $250 million of common shares of Assured and provide a commitment to purchase up to $750 million of additional common shares at the option of the company.
"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," Wilbur Ross, chairman and chief executive officer of WL Ross & Co. said in a statement.
Assured has largely escaped subprime-related losses and, along with Financial Security Assurance, is one of only two existing "triple-A" guarantors with stable outlooks and ratings affirmed by all three rating companies.
"(Ross) probably just thinks it's a better way to go. I don't know why he's avoiding the other ones. He probably sees more problems there and he's not happy with that," said Peter Dunay, chief investment strategist at Meridian Equity Partners in New York.
Earlier this month, Assured Guaranty reported a fourth-quarter loss of $260.1 million on unrealized mark-to-market derivative losses.
But it also raised its dividend and is widely seen as having a competitive advantage at a time when industry titans MBIA Inc
At the same time, Warren Buffett's Berkshire Hathaway
(Reporting by Christopher Kaufman and Franklin Paul; Editing by Derek Caney)
