Assured Guaranty Ltd. announced Thursday night that it had agreed to sell 38.5 million of common shares at $11 per share to raise $423.5 million it will use to finance its acquisition of Financial Security Assurance Holdings Ltd.

The offering was upsized from the $400 million Assured originally expected. Underwriters have a 30-day option to purchase another 5.775 million shares at the same price.

Assured has also agreed to sell $150 million in equity units at $50 per unit. Each unit gives the holder 5% ownership in a $1,000 principal amount 8.5% senior note due 2014 to be issued by Assured Guaranty U.S. Holdings Inc., and a forward purchase contract requiring they buy Assured common shares by June 1, 2012.

Assured has agreed to pay FSA parent Dexia SA $364 million in cash and up to 44.6 million in common shares for the acquisition. Assured will use the proceeds of the common stock and equity unit offering to finance the cash portion and to exercise its option to halve the number of shares it pays Dexia by paying cash at a rate of $8.10 per share.

Assured said it will not need the backstop offered by W.L. Ross & Co. to purchase 3.85 million common shares. An investment fund controlled by W.L. Ross had offered to purchase 10% of the common share offering.

Assured's acquisition of FSA, which excludes its troubled financial products unit, is set to be completed July 1. Dexia and the French and Belgium governments will retain all risks and responsibilities for the financial products business.

Assured stock rose 3.70% Friday to $11.50 It finished the week down from $14.15 at close on Monday, before the details of the equity offering were announced.

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