Kroll Bond Rating Agency (KBRA) affirmed its insurance financial strength rating of AA, with a Stable Outlook, for Assured Guaranty Corp. (AGC), a financial guaranty subsidiary of Assured Guaranty Ltd. (together with its subsidiaries, Assured Guaranty)(NYSE:AGO) on November 30, 2018.
In the report, KBRA noted that AGCs financial position is strong and cited the following key strengths to support its rating conclusion:
- AGC demonstrates the ability to withstand KBRAs conservative stress case loss assumptions across AGCs insured portfolio.
- AGCs substantial and continuing runoff in higher risk components of the Companys portfolio.
- AGCs experienced management which operates with a mature and high-functioning operating platform supported by strong governance and risk management systems.
- The Stable Outlook for AGC reflects KBRAs stress case loss analysis which incorporates significant deterioration in the distressed sectors of AGCs portfolio from current performance, which should contribute to stability if ultimate losses do not approach or exceed these modeled levels.
- Additionally, although it acknowledged that some recent developments may signal a more positive path forward for Puerto Rico, KBRAs analysis incorporated high severity loss assumptions applicable to AGCs Puerto Rico exposure and also determined that Puerto Rico ultimate loss recoveries would have to approach zero to place downward pressure on AGCs rating.
Once again, KBRA recognized the strength of AGCs financial position, affirming AGCs AA stable rating. KBRA also conducted a detailed analysis of AGCs corporate governance, credit and risk management processes and consider them reflective of the industrys best practices, said Dominic Frederico, President and CEO of Assured Guaranty, adding: KBRA also noted that our leverage ratios remain at historic lows.
AGC is part of Assured Guaranty, the leading provider of financial guaranty insurance. Including AGC and its affiliates, the group has $12 billion of claims-paying resources. Assured Guaranty generates approximately $400 million of annual investment income from its high-quality, fixed-income investment portfolio. On average, $2 billion of municipal bonds insured by Assured Guaranty companies trade each week.
AGC affiliates Assured Guaranty Municipal Corp. (AGM) and Municipal Assurance Corp. (MAC) are both rated AA+, Stable Outlook, by KBRA. Additionally, AGC, AGM and MAC are all rated AA with Stable Outlooks by S&P.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made in this press release reflect Assured Guarantys 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 Assured Guarantys inability to maintain its current financial ratings; further actions that the rating agencies may take with respect to the financial strength ratings of Assured Guaranty; adverse developments in Assured Guarantys insured or investment portfolio; and other risks and uncertainties that have not been identified at this time, managements response to these factors, and other risk factors identified in Assured Guarantys 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 November 30, 2018. 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.
About Assured Guaranty
Assured Guaranty provides financial guaranty insurance through Assured Guaranty Corp., which is a subsidiary of Assured Guaranty Ltd. Assured Guaranty Ltd., is a Bermuda-based holding company that provides, through its operating subsidiaries, insurance products to the U.S. and international public finance, infrastructure and structured finance markets. More information can be found at: AssuredGuaranty.com.
Robert Tucker, 212-339-0861
Managing Director, Investor Relations
and Corporate Communications
Ashweeta Durani, 212-408-6042
Vice President, Corporate