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."