WINSTON-SALEM, N.C., June 19 /PRNewswire-FirstCall/ -- Triad Guaranty
Inc. (Nasdaq: TGIC) announced today that it has ended its negotiations with
Lightyear Capital LLC to form a new mortgage insurance company. Triad also
reported today that Freddie Mac informed Triad that the appeal of its
subsidiary's suspension as an approved mortgage insurer has been denied. As
a result of these developments, Triad's subsidiary, Triad Guaranty
Insurance Corporation, will cease issuing commitments for mortgage
insurance effective July 15, 2008 and will work with its customers, the
Illinois Division of Insurance and each of the GSEs to assure an orderly
transition of its business to run-off.
Mark Tonnesen, President and Chief Executive Officer of Triad, said,
"The difficult decisions made by our Board with respect to these matters
were based on a candid and thorough evaluation of our current situation and
how to best serve the interests of Triad and its customers and
policyholders going forward. We want to thank Lightyear Capital for its
efforts. They worked very hard with us to develop a transaction that we
believe would have ultimately served the interests of Triad's stakeholders,
but certain hurdles arose that prevented the transaction from being
feasible. We are continuing to work with our financial advisor, Goldman
Sachs, to explore whether other strategic alternatives are available, but
we are not optimistic that any opportunities will surface."
Triad plans to reduce its workforce by approximately 100 persons in the
coming weeks and will commence a run-off of its existing book of business.
Mr. Tonnesen said, "We believe Triad has the resources and talent to manage
an effective run-off. As previously indicated, we currently expect that our
run-off will enable the payment of all legitimate policyholder claims, and
we will dedicate ourselves to the success of the run-off plan as our number
one objective."
About Triad Guaranty Insurance Corporation
Triad Guaranty Inc.'s wholly owned subsidiary, Triad Guaranty Insurance
Corporation, is a nationwide mortgage insurer providing credit enhancement
solutions to its lender customers and the capital markets. This allows
buyers to achieve homeownership sooner, facilitates the sale of mortgage
loans in the secondary market and protects lenders from credit
default-related expenses. For more information, please visit the company's
web site at http://www.triadguaranty.com
Certain of the statements contained in this release are
"forward-looking statements" and are made pursuant to 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. These
forward-looking statements are subject to change, uncertainty and
circumstances that are, in many instances, beyond our control and they have
been made based upon our current expectations and beliefs concerning future
developments and their potential effect on us. Actual developments and
their results could differ materially from those expected by us, depending
on the outcome of a number of factors, including our ability to enhance our
capital resources, the possibility of general economic and business
conditions that are different than anticipated, legislative, regulatory,
rating agency and other similar developments, changes in interest rates,
the housing market, the mortgage industry and the stock market, stronger
than anticipated competitive activity, as well as the factors described
under "Risk Factors" and under "Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995" in our Annual Report on Form 10-K
for the year ended December 31, 2007 and in future filings by us in other
reports and statements that we file with the Securities and Exchange
Commission. Forward-looking statements are based upon our current
expectations and beliefs concerning future events and we undertake 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.
SOURCE Triad Guaranty Inc.
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Related links:
http://www.triadguaranty.com
CONTACT:
Mark K. Tonnesen, President and CEO of Triad
Guaranty Inc., +1-336-723-1282 ext. 1101, mtonnesen@tgic.com
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