XL Capital?s spin-off of its financial guaranty insurance and reinsurance business is expected to take place on Wednesday whenSecurity Capital Assurance Ltd. has its initial public offering.

XL announced in June that it will be spinning off the Bermuda-based company. The IPO will see 22.4 million shares sold at $21 to $23 each and it is expected to raise up to $492.8 million.

Security Capital is offering 18 million shares while XL Insurance Bermuda Ltd. is offering 4.4 million common shares. It will not receive any proceeds from the sale of XL?s common shares.

When first announcing the IPO in April, XL Capital chief executive Brian O?Hara said: ?The IPO of SCA will enable XL to build on its strengths in insurance and reinsurance while enabling SCA to continue to capitalise on growth opportunities.?

In a regulatory filing earlier this year, Security Capital said it had net income in the first quarter of 2006 of $21.4 million on total premiums written of $82.2 million, compared with net income of $25.5 million on total premiums written of $51.7 million for the same period a year ago.

Security Capital was formed this year as the holding company for the financial guaranty businesses of XL Capital ? the parent company to XL Capital Assurance Inc. and XL Financial Assurance Ltd.

Security Capital has 160 employees.

After the offering, XL Capital will beneficially own approximately 65 percent of the company?s common shares, the company said in its regulatory filing.

Security Capital Assurance will retain less than ten percent of the net proceeds for general corporate purposes. It intends to contribute the balance of the net proceeds to the capital of its insurance and reinsurance subsidiaries to support future growth in their respective businesses.

Goldman Sachs, JPMorgan, and Merrill Lynch are the joint-lead managers of the offering. Acting as co-managers are Banc of America Securities, Barclays Capital, Bear Stearns, William Blair, Fox-Pitt, Kelton, HSBC, Calyon Securities (USA), Keefe, Bruyette & Woods, Dowling & Partners Securities, and Wachovia Securities.

The company will list its common shares on the New York Stock Exchange under the symbol ?SCA?.

In 2004, XL rival Ace Ltd. floated its financial guaranty business as Assured Guaranty Ltd. and raised close to $900 million.

Security Capital, which will be based in Bermuda, is chaired by XL chairman Michael Esposito.

The chief executive is Paul S. Giordano, who previously served as XL?s executive vice president and chief executive for financial products services operations. Mr. Giordano was general counsel of XL from January 1997, to November, 2004.

David Shea will be chief financial officer while Edward Hubbard and Michael Rego are executive vice presidents for ginancial guaranty insurance and financial guaranty reinsurance respectively.