Triad Guaranty Inc. has entered into an exclusive arrangement with Lightyear Capital LLC, a New York-based private equity firm focused on financial services, to negotiate definitive agreements that would result in the creation of a new monoline mortgage insurance company.
In addition, the new firm would provide various forms of administrative and financial support to Triad Guaranty. Lightyear would be the lead investor, while Triad Guaranty initially would not have any ownership in the new company.
Triad Guaranty says that it currently expects to complete negotiations and execute the definitive agreements in four to six weeks. Execution of the agreements is subject to a number of conditions, including the approval of Lightyear's investment committee and Triad Guaranty's board of directors.
Assuming execution of the definitive agreements occurs in May, the transaction is currently expected to close in the third quarter and be subject to customary closing conditions, including receipt of all necessary approvals.
Sources: Triad Guaranty Inc., Lightyear Capital