MBIA Inc. Announces Agreement to Merge Its Investment Business With 1838 Investment Advisors.
MBIA 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.
The transaction will be structured asa tax-free exchange and accounted for as a "pooling of interests". 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, Standard & Poor's Ratings Services and Fitch IBCA. Please visit MBIA's web site at http://www.mbia.com.
CONTACT: Michael Ballinger (914) 765-3893