Statement from Financial Security Assurance (FSA) on Assured Guaranty's Proposed...

Statement from Financial Security Assurance (FSA) on Assured Guaranty's Proposed Acquisition of FSA

NEW YORK--(Business Wire)--
Financial Security Holdings Ltd. (the Company), the holding
company for financial guaranty insurer Financial Security Assurance,
Inc. (FSA) announced today that, subject to relevant regulatory and
other approvals, its parent Dexia SA and Assured Guaranty Ltd.
(Assured Guaranty) have entered into an agreement for Assured Guaranty
to acquire all of Dexia's shares of the Company. The transaction will
create a highly rated bond insurer with a leading presence in the U.S.
municipal, international public infrastructure, and asset-backed
markets.

Commenting on the proposed acquisition, Robert P. Cochran,
chairman and chief executive officer of FSA Holdings and FSA said: "We
believe that this combination is a win-win for issuers and investors,
as well as for the two companies. The whole will be greater than the
sum of the parts based on the exceptional talents of our people, the
larger scale of operation and greater capital strength achieved.

"While Dexia has been a highly supportive parent over the past
eight years, we look forward to working with our new partners at
Assured Guaranty to build a bigger and better franchise."

THE COMPANY

Financial Security Assurance Holdings Ltd. (the Company),
headquartered in New York City, is a holding company whose affiliates
provide financial guarantees and financial products to clients in the
global public finance markets. The principal operating subsidiary is
Financial Security Assurance Inc. (FSA), a leading financial
guarantor. Through other subsidiaries, the Company provides
FSA-insured financial products, such as guaranteed investment
contracts. The Company is a member of the Dexia group.

FORWARD-LOOKING STATEMENTS

The Company relies on the safe harbor for forward-looking
statements provided by the Private Securities Litigation Reform Act of
1995. This safe harbor requires that the Company specify important
factors that could cause actual results to differ materially from
those contained in forward-looking statements made by or on behalf of
the Company. Accordingly, forward-looking statements by the Company
and its affiliates are qualified by reference to the following
cautionary statements.

In its filings with the SEC, reports to shareholders, press
releases and other written and oral communications, the Company from
time to time makes forward-looking statements. Such forward-looking
statements include, but are not limited to:

-- projections of revenues, income (or loss), earnings (or loss)
per share, dividends, market share or other financial
forecasts;

-- statements of plans, objectives or goals of the Company or its
management, including those related to growth in adjusted book
value or return on equity; and

-- expected losses on, and adequacy of loss reserves for, insured
transactions.

Words such as "believes," "anticipates," "expects," "intends" and
"plans" and future and conditional verbs such as "will," "should,"
"would," "could" and "may" and similar expressions are intended to
identify forward-looking statements but are not the exclusive means of
identifying such statements.

The Company cautions that a number of important factors could
cause actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in forward-looking
statements made by the Company. These factors include:

-- the risks discussed in the Company's Annual Report on Form
10-K and Quarterly Reports on Form 10-Q under "Item 1A. Risk
Factors";

-- changes in capital requirements or other criteria of
securities rating agencies applicable to FSA;

-- potential for reduced market appetite for FSA-insured
securities due to credit watch status at and potential ratings
downgrade by Fitch, Moody's and Standard & Poor's;

-- the change in creditworthiness of, or the quality of support
provided by, the Company's parent Dexia, on whom the Company
relies for credit and liquidity support of the FP business;

-- market conditions, including the credit quality and market
pricing of securities issued;

-- competitive forces, including the conduct of other financial
guaranty insurers and competition from alternative executions;

-- changes in domestic or foreign laws or regulations applicable
to the Company, its competitors or its clients;

-- impairments to assets in the FP Investment Portfolio proving
to be "other-than-temporary" rather than temporary, resulting
in reductions in net income;

-- changes in accounting principles or practices that may affect
the Company's reported financial results;

-- an economic downturn or other economic conditions (such as a
rising interest rate environment) adversely affecting
transactions insured by FSA or its General Investment
Portfolio;

-- inadequacy of reserves established by the Company for losses
and loss adjustment expenses;

-- disruptions in cash flow on FSA-insured structured
transactions attributable to legal challenges to such
structures;

-- downgrade or default of one or more of FSA's reinsurers;

-- capacity limitations that may impair investor appetite for
FSA-insured obligations;

-- market spreads and pricing on insured CDS exposures, which may
result in gain or loss due to mark-to-market accounting
requirements;

-- prepayment speeds on FSA-insured asset-backed securities and
other factors that may influence the amount of installment
premiums paid to FSA; and

-- other factors, most of which are beyond the Company's control.

The Company cautions that the foregoing list of important factors
is not exhaustive. In any event, such forward-looking statements made
by the Company speak only as of the date on which they are made, and
the Company does not undertake any obligation to update or revise such
statements as a result of new information, future events or otherwise.

Financial Security Holdings Ltd.
Press Relations
BETSY CASTENIR, 212-339-3424
or
TOM VOGEL, 212-339-0862
or
Investor Relations
ROBERT TUCKER, 212-339-0861

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