The initial public offering of Assured Guaranty Ltd., the spin off of ACE Ltd.?s surety insurance business, is set to take place this week raising nearly $1 billion, according to Press reports yesterday.

The company, which was known as ACE Guaranty then AGC Holdings and insures against the default of municipal bonds and other financial instruments, is set to float at between $18 and $20 and should raise $980 million.

Reports on MCM EquityWatch, CBS Marketwatch and Reuters all said that the Bermuda company was planning its IPO, which will be managed by Bank Bank of America Securities/Goldman Sachs, this week.

Bermuda-based Assured Guaranty is expected to launch before April 24 and is expected to be one of the largest companies to float on the New York Stock Exchange this year in terms of dollar proceeds.

The IPO would come in third behind the $1.8 billion IPO from Semiconductor Manufacturing International on March 11, and the $1.76 billion raised by Assurant (the insurance spin-off of Fortis, in its debut on February 4).

Ace announced in December it was to going to spin off the company to improve its balance sheet and free up funds to expand its core business as a property and casualty insurer and said the launch would take place in the first half of 2004.

The proposed New York Stock Exchange symbol for Assured Guaranty is expected to be AGO, and the launch could see the company?s ratings improve.

Moody?s said that it had placed two of Assured Guaranty?s subsidiaries, Assured Guaranty Corp. (previously ACE Guaranty Corp.) and Assured Guaranty Re (previously ACE Capital Re), under review for a possible upgrade.

?Moody?s noted that the review for possible upgrade reflects the strong capital base and conservative financial profile and underwriting targets of the Assured Guaranty group as well as the existing earnings stream coming from its established financial guaranty businesses,? it said in a release.

ACE has said it will keep at 35 percent stake in Assured Guaranty, but this could go down to as much as 25 percent if the 10 underwriters find there is the expected heavy investor interest.

Assured Guaranty is currently the largest monoline financial guaranty reinsurer but has been increasingly pursuing primary financial guaranty activities over the last five years.

Under the ongoing strategic shift, new reinsurance activities will be increasingly underwritten by Assured Guaranty Re, while Assured Guarantee Corp. focuses essentially on primary business.

Assured Guarantee is getting rid of most of its non-financial guaranty exposures and businesses, other than mortgage default reinsurance, which it considers to be financial guaranty-like, to subsidiaries of Ace Ltd.

Assured Guaranty itself is not to receive any proceeds from the sale of 65 percent of the company to the public.

After the offering, there will be 75 million shares outstanding in the company, giving it an initial market capitalisation of about $1.5 billion.

Last year, AGC posted gross premiums of $349.2 million and total revenue of $512.3 million, the offering document shows. That compared with $417.2 million in gross premiums and revenues of $302 million in 2002.