Assured Guaranty Corp., a financial guaranty subsidiary of Assured Guaranty Ltd, together with its subsidiaries, has been assigned an insurance financial strength rating of AA, with a stable outlook, by Kroll Bond Rating Agency.
AGC is the third Assured Guaranty company to be rated by KBRA. Affiliates Assured Guaranty Municipal Corp. and Municipal Assurance Corp. are both rated AA plus, with a stable outlook.
In its rating analysis, Kroll notes that AGC demonstrates the ability to withstand KBRA's conservative stress case loss assumptions across the breadth of its insured portfolio and that AGC's mature and high-functioning operating platform is supported by strong governance and risk management systems.
"KBRA assigned AGC its AA rating after conducting rigorous case by case stress analysis of the most sensitive segments of AGC's insured portfolio, along with robust statistical stress modeling of all other AGC exposures," said Dominic Frederico, president and CEO of Assured Guaranty. "AGC was shown to satisfy, in full and on time, and with a comfortable balance remaining, the higher than expected claims that would occur in an economic crisis that a guarantor meriting KBRA's AA rating should survive."
Kroll also said in its report Monday that AGC's tested management team is well positioned to address future portfolio risk issues and that the substantial and continuing runoff in structured finance components of AGC's portfolio should continue to moderate risk. Kroll said that structured finance exposure is down nearly 75% since year-end 2010.
"As a result, each of Assured Guaranty's U.S. subsidiaries writing financial guaranty insurance now carries financial strength ratings of double-A flat or higher, with stable outlooks, from two major rating agencies, indicating a level of rating agency comfort unmatched among active bond insurers," Frederico said.
