Kroll Bond Rating Agency Affirms Municipal Assurance Corp.’s AA+ Financial Strength Rating with Stable Outlook

Category:

Tuesday, August 4, 2015 9:20 am EDT

Dateline:

HAMILTON, Bermuda

Public Company Information:

NYSE:
AGO
"We are pleased that KBRA, with its objective and thorough credit-based analysis, continues to validate MAC’s business model"

HAMILTON, Bermuda--(BUSINESS WIRE)--Bond insurer Municipal Assurance Corp. (MAC), a member of the Assured Guaranty group of companies (Assured Guaranty), announced that Kroll Bond Rating Agency (KBRA) affirmed MAC’s AA+, Stable Outlook, financial strength rating on August 3, 2015.

In the report, KBRA noted MAC’s:

  • Ability to withstand all losses and operating expenses at the 99.9%, or AAA, confidence level in KBRA’s stress-case loss simulation model, with “a comfortable balance remaining.”
  • U.S. municipal-only business plan with a substantial, diversified, low-risk existing insured portfolio, without any significant geographic or single risk concentrations, that provides a significant earnings stream.
  • Very well developed credit underwriting, surveillance and risk management systems.
  • Experienced management team and staff with deep expertise and broad industry contacts.

“We are pleased that KBRA, with its objective and thorough credit-based analysis, continues to validate MAC’s business model,” said Dominic Frederico, President and CEO of Assured Guaranty.

“The KBRA report explicitly states that the AA+ rating is the highest rating it is likely to give a bond insurer in the current environment, even if, like MAC, the guarantor is ‘deemed capable of withstanding modeled expenses and claims at the AAA stress level.’”

MAC is licensed to insure municipal bonds in all 50 states and the District of Columbia. MAC was launched on July 22, 2013 to guarantee only U.S. municipal bonds in the most well understood bond sectors such as general obligations and tax-backed issues for cities, counties and school districts, and public electric, water, sewer and transportation revenue bonds. At March 31, 2015, MAC had $1.9 billion of claims-paying resources and an $87 billion direct and assumed insured portfolio. Its highly diversified insured portfolio generates predictable future revenue from its embedded $523 million net unearned premium reserve, which is part of MAC’s $1.5 billion investment portfolio.

In addition to the KBRA rating, MAC’s financial strength is rated AA with a Stable Outlook by Standard & Poor’s Ratings Services.

Any forward-looking statements made in this press release reflect Assured Guaranty’s current views with respect to future events and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. These risks and uncertainties include, but are not limited to, those resulting from changes in rating agency models or opinions, adverse credit developments in MAC’s insured portfolio and the impact of those developments on rating agency models and opinions, other risks and uncertainties that have not been identified at this time, management’s response to these factors, and other risk factors identified in Assured Guaranty’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of August 4, 2015. Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Assured Guaranty Ltd., the ultimate holding company for the Assured Guaranty Group, is a publicly traded (NYSE: AGO) Bermuda-based holding company. Its operating subsidiaries provide credit enhancement products to the U.S. and international public finance, infrastructure and structured finance markets. More information on Assured Guaranty Ltd. and its subsidiaries can be found at AssuredGuaranty.com.

Contact:

Assured Guaranty Ltd.
Robert Tucker, 212-339-0861
Managing Director, Investor Relations and Corporate Communications
rtucker@assuredguaranty.com
or
Media:
Ashweeta Durani, 212-408-6042
Vice President, Corporate Communications
adurani@assuredguaranty.com