Billionaire investor Wilbur Ross has agreed to make up to a $1 billion investment in Bermuda-based bond insurer Assured Guaranty Ltd.

The bond insurer said this morning that WL Ross & Co. will purchase $250 million worth of common stock and commit to buying an additional $750 million in shares at the company’s option.

Assured shares rose 11 percent in premarket trading to $25.50 from a $22.78 close yesterday.

Many bond insurers have struggled as a result of the sub-prime mortgage crisis and their all-important credit ratings have come under pressure. Assured is one of only two which have managed to retain AAA ratings from all three major credit agencies and its municipal bond business quadrupled in December and January.

Read the full story in tomorrow's Royal Gazette business section.