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More on the AIG Deal

Financial Post (FP) ran a good story today with details on OTPP’s purchase of AIG United Guaranty (AIGUG).

It revealed some interesting tidbits:

  • OTPP is teaming up with First National’s President, Stephen Smith, to buy AIGUG.  First National is Canada’s biggest non-bank lender.  (Having First National behind it could lend a lot of credibility and revenue to the new United Guaranty. First National was an early adopter of AIGUG, but stopped insuring with it after the credit crisis hit.)
  • OTPP says it spoke “to a number of potential [bank] customers prior to signing this transaction.”  (Which would suggest they have some agreements in principle with lenders to offer insurance from the new United Guaranty.)
  • FP says that a spokesman from OTPP’s investment arm, Erol Uzumeri, “does not predict Teachers will engage in price wars or introduce any exotic new products to the landscape to grow its market share.”
  • Uzumeri said: “Our plans are modest. CMHC is and will always will be a dominant provider of mortgage insurance in Canada, but there is room for third-party providers."