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Bond Insurance Industry Exhibits Outstanding Liquidity
Standard & Poors, Dec 2000
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
Abstract
When it becomes necessary for a bond insurer to pay a claim, cash matters most. Earnings, noncash claims-paying resources, and other financial measures are at best secondary, and at worst irrelevant. Standard & Poor's periodically reviews a bond insurer's cash position and its ability to raise additional cash against conservatively defined theoretical payments associated with a company's various product lines. Liquidity resources and potential liquidity demands are examined for the current year and several subsequent years on a pro forma basis. In general, as result of the industry's conservative investment strategies, single-risk (individual obligor) management standards, strong financial flexibility, and policy language that generally confines payments to principal and interest as it comes due, the industry continues to demonstrate a...
Companies mentioned in this report are: Ambac Assurance Corp.,Financial Guaranty Insurance Co.,Assured Guaranty Municipal Corp.,Assured Guaranty Corp,MBIA Inc.,RAM Reinsurance Co Ltd.,ACA Assurance
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