Triad Guaranty and Essent Guaranty Announce Completion of Sale of Operating Platform
02 December 2009 - 3:00AM
PR Newswire (US)
WINSTON-SALEM, N.C., Dec. 1 /PRNewswire-FirstCall/ -- Triad
Guaranty Inc. (NASDAQ:TGIC) ("Triad Guaranty") and its wholly-owned
subsidiary, Triad Guaranty Insurance Corporation (collectively,
"Triad"), together with Essent Guaranty, Inc. ("Essent"), today
announced the completion of the sale of Triad's information
technology and operating platform (the "asset sale") to Essent. The
asset sale was announced on October 7, 2009. Essent, a new mortgage
insurer founded to provide private capital to America's housing
finance system, has acquired all of Triad's proprietary mortgage
insurance software and substantially all of the supporting
hardware, as well as certain other assets, in exchange for up to
$30 million in cash and the assumption by Essent of certain
contractual obligations related to software use. Triad has received
the initial $10 million installment of the purchase price under the
terms of the asset sale. Essent is establishing its operations and
technology center in Winston-Salem, North Carolina, and
approximately 40 of Triad's information technology and operations
employees joined Essent upon the completion of the asset sale.
Essent's corporate headquarters remains in Radnor, Pennsylvania.
Effective with the completion of the asset sale, Essent has begun
to provide ongoing information systems maintenance and services,
customer service and policy administration support to Triad under
the terms of a services agreement designed to assist Triad in
managing the voluntary run-off of its existing in-force book of
business. Triad retains the obligation for all risks insured under
its existing insurance contracts and will continue to directly
manage loss mitigation and claim activity on its insured business.
Triad retains personnel in loss management, quality assurance and
corporate areas to perform these functions. "Essent is delighted to
have closed our operating platform transaction with Triad Guaranty
in a timely manner. This enables Essent to move expeditiously to
obtain final approvals and prepare to begin writing mortgage
insurance early in 2010," said Mark Casale, President and CEO of
Essent. "The Triad team has been very supportive throughout the
closing process, and our operational readiness preparations are
well underway. We welcome to the Essent team the experienced
mortgage insurance professionals from Triad, who will form the
nucleus of our operations and technology center in Winston-Salem."
"Triad Guaranty is pleased to have been able to move from the
definitive agreement to closing with Essent quickly and
cooperatively," said Ken Jones, Triad's President and CEO. "We
believe that this is a favorable result for Triad's stakeholders
going forward. We also appreciate the hard work of the employees on
both the Essent and Triad teams during this process." Casale also
noted that Essent continues to make excellent progress in the
National Association of Insurance Commissioners' expedited
licensing pilot program, having received approvals from 35 states
to date. "In our discussions with many states, we have heard about
the need for new mortgage insurance capacity to support qualified
borrowers who cannot afford large down payments," Casale added. "We
are gratified that so many states have approved Essent
expeditiously, and we hope to bring borrowers and lenders active in
these states much needed new capacity for affordable, low down
payment loans." About Triad Triad Guaranty Inc.'s wholly owned
subsidiary, Triad Guaranty Insurance Corporation, is a nationwide
mortgage insurer pursuing a voluntary run-off of its existing
in-force book of business. For more information, please visit the
Company's website at http://www.triadguaranty.com/. This release
includes "forward-looking statements" within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. These statements include estimates and assumptions
related to economic, competitive, regulatory, operational and
legislative developments and also include, but are not limited to,
statements relating to subsequent payments related to the asset
sale, future benefits and services, and future economic and
industry conditions and are not historical facts and typically are
identified by use of terms such as "may," "will," "should,"
"could," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential," "continue" and similar words, although some
forward-looking statements are expressed differently. These
forward-looking statements are subject to change, uncertainty and
circumstances that are, in many instances, beyond Triad's control
and they have been made based upon Triad's current expectations and
beliefs concerning future developments and their potential effect
on Triad. Actual developments and their results could differ
materially from those expected by Triad depending on the outcome of
a number of factors, including but not limited to: potential
uncertainties regarding market acceptance of the asset sale;
competitive responses to the asset sale; impact of current and
future economic conditions on the asset sale; the possibility that
the Illinois Department of Insurance may take various actions
regarding Triad if it does not operate its business in accordance
with its revised financial and operating plan and the corrective
orders, including seeking receivership proceedings; Triad's ability
to operate its business in run-off and maintain a solvent run-off;
Triad's ability to continue as a going concern; the possibility of
general economic and business conditions that are different than
anticipated; legislative, regulatory and other similar
developments; changes in interest rates, employment rates, the
housing market, the mortgage industry and the stock market; Triad's
ability to maintain the listing of its common stock on The NASDAQ
Stock Market; Triad's ability to identify and utilize another
trading platform for its common stock if its common stock is
delisted from The NASDAQ Stock Market; and various factors
described under "Risk Factors" and in the "Safe Harbor Statement
under the Private Securities Litigation Reform Act of 1995" in
Triad's Annual Report on Form 10-K for the year ended December 31,
2008 and in other reports and statements filed with the Securities
and Exchange Commission. Forward-looking statements are based upon
Triad's current expectations and beliefs concerning future events
and Triad undertakes no obligation to update or revise any
forward-looking statements to reflect the impact of circumstances
or events that arise after the date the forward-looking statements
are made, other than as is required under the federal securities
laws. About Essent Essent Guaranty, Inc. is a member of the Essent
Group Ltd. family of companies, which, through its subsidiaries, is
preparing to offer private mortgage insurance and reinsurance
coverage with respect to United States risks. The company has
secured $500 million in equity funding from a group of experienced
financial services investors, including Pine Brook Road Partners,
Goldman Sachs, J.P. Morgan, PartnerRe, and RenaissanceRe Ventures
Ltd. Essent's mission is to support homeownership for borrowers who
can afford a home, but not a large down payment, by insuring
mortgage lenders and investors from credit losses. The company will
achieve this mission by providing private capital to take mortgage
credit risk, and working as a risk management partner with lenders
and other mortgage investors. The company's headquarters are in
Radnor, Pennsylvania. Additional information may be found at
http://www.essent.us/. DATASOURCE: Triad Guaranty Inc. CONTACT: Ken
Jones, Triad Guaranty - President and CEO, +1-336-723-1282 ext
1105, , for Triad Guaranty; Janice Walker, JD Walker
Communications, LLC, +1-610-230-0556, , for Essent Web Site:
http://www.triadguaranty.com/ http://www.essent.us/
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