GoldenTree's Star Insurance buys Syncora Guarantee for $392.5m

Bermuda-based Syncora Holdings has entered into an agreement to sell its New York financial guarantee insurance subsidiary to Star Insurance Holdings, a part of GoldenTree Asset Management, for $392.5 million in cash.

Syncora said it had been exploring and evaluating strategic alternatives for the sale of Syncora Guarantee (SGI) since March this year. In February 2018, SIG agreed a $13.5 billion reinsurance deal with Assured Guaranty.

According to the company, the process included solicitations of interest from several potential acquirers wherein Syncora's board of directors selected GoldenTree’s bid as the most attractive.

Syncora noted that the agreement with Star Insurance allows it to consider other acquisition proposals received prior to 5:00 pm Eastern time on September 13, 2019. If a superior proposal is received, Syncora has the right to terminate the agreement pursuant to the terms and conditions thereof and pay Star Insurance a termination fee of $15.7 million plus reimbursement of Star Insurance’s reasonable expenses, up to $3 million.

The closing of the transaction is subject to customary conditions, including approval by the New York Department of Financial Services, and clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to take place by the end of the fourth quarter of 2019 or during the first quarter of 2020.

Frederick Hnat, CEO and President of Syncora, said: “This agreement is the culmination of years of hard work and focus on our core strategies of risk reduction, asset monetisation and enhancing value for our shareholders.

"We are very pleased with the terms of the agreement with Star Insurance, an entity organised by GoldenTree, one of the largest independent asset managers focused on credit, and believe that it helps accomplish our long stated goal of optimising shareholder value and returning capital to shareholders.”

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