SAN FRANCISCO — Kroll Bond Rating Agency has assigned an insurance financial strength rating of AA-plus to Assured Guaranty Municipal Corp., the largest municipal bond insurance subsidiary of Assured Guaranty Ltd.
The outlook is stable.
In its rating report KBRA said that AGM demonstrates an ability to withstand the agency's conservative stress case loss assumptions across the breadth of its insured portfolio, and its substantial and continuing runoff in structured finance components of AGM's portfolio should continue to moderate risk.
"KBRA's decision to assign AGM its AA+ stable rating provides further validation of AGM's business model and our disciplined approaches to risk exposure and capital management, all of which have been tested and proven before, during and since the Great Recession," said Dominic Frederico, president and chief executive officer of Assured Guaranty.
The KBRA report also noted that AGM's operating platform is supported by strong governance and risk management systems, and that its tested management team is well positioned to address future portfolio risk issues, should they develop.
AGM has written primarily municipal business since the credit crisis, with a small amount of international infrastructure. KBRA said that while it retains a significant legacy exposure to structured finance, that exposure has been declining in absolute terms.
"KBRA concluded that AGM would satisfy all claims in full and on time, with a substantial cushion remaining, in a stress case scenario based on robust statistical modeling enhanced with case by case performance analysis of key credits," Frederico said. "We believe that KBRA's rating methodology is thorough, objective, quantitative and transparent, providing investors with insight into KBRA's reasoning."
AGM is part of Assured Guaranty, a provider of financial guaranty service. Including AGM and its affiliates, the group has $12 billion of claims-paying resources.
On average, $400 million of municipal bonds insured by Assured Guaranty companies trade each day, according to KBRA.
