MBIA Inc. Announces Agreement to Merge Its Investment Business With 1838 Investment Advisors.ARMONK, N.Y.--(BUSINESS WIRE)--June 22, 1998--MBIA Inc. (NYSE NYSE
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MBI Maslach Burnout Inventory (psychometrics) ) announced today that it has agreed to merge its investment business with 1838 Investment Advisors, a full-service asset management firm with a strong institutional focus. Located in Radnor, Pa., 1838 manages over $6 billion in equity, fixed-income and balanced portfolios for a client base comprised of high-net-worth individuals, municipalities, endowments, foundations and corporate employee-benefit plans. 1838 acts as investment advisor to 1838 Investment Advisors Funds and 1838 Bond Debenture Trading Fund.
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MBIA Maryland Business Incubation Association also announced the formation of a holding company, MBIA Asset Management Corporation, to consolidate these investment management operations. W. Thacher Brown, chairman, president and chief executive officer of 1838, will become president of MBIA Asset Management. At the close of the 1838 transaction, the holding company will have over $21 billion of assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. .
The transaction will be structured asa tax-free exchange tax-free exchange
An exchange of assets between taxpayers in which any gain or loss is not recognized in the period during which the exchange takes place. Rather, taxpayers are required to adjust the basis of assets exchanged. and accounted for as a "pooling of interests Pooling of Interests
An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together.
The opposite of pooling of interests is the purchase acquisition method. ". The transaction, which is subject to regulatory approval and other customary conditions, is expected to close in the third quarter of 1998. MBIA expects the acquisition to be non-dilutive to 1998 earnings per share and accretive thereafter.
Gary C. Dunton, president, MBIA Investment Management and Financial Services Division, said, "This strategic transaction will significantly strengthen our investment management capabilities. By combining 1838's strong equity management with our fixed-income capabilities, we can provide clients with a full line of investment products and services to better serve their needs."
MBIA Asset Management will comprise MBIA's investment management products and services: pooled local government cash management (CLASS); guaranteed investments for bond proceeds; fixed-income and equity management and customized investment advisory services.
MBIA Inc., through its subsidiaries, is the world's preeminent financial guarantor and a leading provider of specialized financial services. MBIA provides innovative and cost-effective products and services that meet the credit enhancement, financial and investment needs of its public and private clients, domestically and internationally. MBIA Insurance Corporation has a claims-paying rating of Triple-A from Moody's Investors Service Moody's Investors Service
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A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. , Standard & Poor's Ratings Services and Fitch IBCA IBCA International Braille Chess Association
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CONTACT: Michael Ballinger (914) 765-3893