Bermuda-based Assured Guaranty Ltd. has struck a deal with fellow financial guarantor CIFG to reinsure $13 billion worth of its municipal bond business.

CIFG, also based in Bermuda, has been looking for some months to reinsure its public finance portfolio, and the deal was reached with the help of the New York State Insurance Department.

Assured, one of few financial guarantors to have survived the crisis of recent weeks with its triple-A credit rating intact, will receive around $88 million of unearned premium reserves under the terms of the deal.

"Public finance investors will benefit from an upgrade of the rating on their investment if they agree to the novation of their current policy with CIFG North America," Assured Guaranty chief executive officer Dominic Frederico said in the statement released late on Thursday.

"This agreement is another important step towards ensuring CIFG North America honours its obligations to its policyholders," said John Pizzarelli, CEO of CIFG Holding Ltd.

"I would especially like to thank the New York State Insurance Department and Superintendent Eric Dinallo for their assistance in helping us reach this agreement."

The two companies expect to close the transaction before the end of the year.

Lazard advised CIFG NA and Banc of America Securities LLC advised Assured on this transaction.

Assured has been backed by billionaire investor Wilbur Ross, who has pledged to plough around $1 billion into the company.