Kroll Bond Rating Agency Assigns AA+, Stable Outlook, to National Public Finance Guarantee Corporation

  Kroll Bond Rating Agency Assigns AA+, Stable Outlook, to National Public
  Finance Guarantee Corporation

Business Wire

NEW YORK -- May 12, 2014

Kroll Bond Rating Agency (KBRA) has assigned a AA+, Stable Outlook, insurance
financial strength rating to National Public Finance Guarantee Corporation
(National). The rating reflects National’s intention to begin underwriting
within the U.S. Public Finance market. National and its parent MBIA Inc.,
(MBIA) benefit from a management team with a strong understanding of the
municipal marketplace and the financial guaranty product, very robust systems
and business teams with deep market relationships. National’s experienced
management team has many years of direct credit risk management and
underwriting experience in the municipal and financial guarantor industry.

National is expected to benefit from an insured portfolio created through two
separate agreements that transferred a U.S. book of business from MBIA Corp.
to National. The portfolio’s revenue stream lends a significant degree of
financial resources and flexibility to National as it seeks to establish its
market position after a period of dormancy. National’s very well developed
systems for credit underwriting, credit risk exposure management and
surveillance are also a major strength.

As noted in KBRA’s Financial Guaranty Rating Methodology, based on its
evaluation of a guarantor’s insured portfolio, KBRA tests the ability of an
insurer’s claims-paying resources to support potential losses through a Monte
Carlo simulation. The modeling approach produces a distribution of the insured
portfolio’s expected future losses. KBRA focuses on losses in the tail of the
loss distribution to assess the company’s ability to perform under stress
conditions. The tail losses are then assessed against the company’s
claims-paying resources in a financial model which places the company in
run-off. The rating level for a guarantor is largely based on its ability to
pay claims under KBRA’s stress case scenario which places the company in

To view the rating report, please visit National Public Finance Guarantee

Related Publications:

Financial Guaranty Rating Methodology


Analytical Contacts:
Kroll Bond Rating Agency
Karen Daly, Senior Managing Director, 646-731-2347
Alessandra D'Imperio, Senior Director, 646-731-2383
Andy Clarke, Director, 646-731-2380
Kate Hackett, Managing Director, 646-731-2304
Paul Kwiatkoski, Managing Director, 646-731-2387
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