Standard & Poor’s Friday upgraded National Public Finance Guarantee Corp., MBIA Inc.’s municipal-only insurer, to A from BBB, following the announcement earlier in the week of MBIA’s settlement with Societe Generale.

Standard & Poor’s also raised its rating on MBIA Inc. to BBB from B-minus.

“We are very pleased by S&P’s ratings actions, which significantly enhance MBIA Inc.’s financial flexibility and position National to begin writing new business in the near future,” said Chuck Chaplin, MBIA Inc.’s president and chief financial officer.

Standard & Poor’s had upgraded National earlier this week to BBB from BB after the announcement that MBIA Insurance Corp. would fully repay its $1.7 billion loan from National with cash from the settlement with Bank of America Corp.

The agency followed through on its statement that it would further upgrade National if the SocGen settlement occurred, which ended all of MBIA’s outstanding transformation litigation.

“The rating on National reflects our view that MBIA Corp. no longer acts as an anchor on the National rating following the settlement with Société Générale that ends litigation challenging National’s split from MBIA Corp.,” S&P said in the report.

The agency also said the rating reflects the company’s stable and strong earnings and low potential for stressed losses, given its risk profile.

Standard & Poor’s expects that National will gain market acceptance, and become a competitive financial guarantor.

MBIA said during its conference call with investors Friday morning that once it achieves its target ratings, there are still several things National needs to do before it can start writing new business.

The bond insurer will need to reestablish connections in the marketplace with issuers, investors, and intermediaries, which include banks and broker deals. It may also need to make some additions to its staff.

National is rated Baa2 by Moody’s Investors Service, which called MBIA’s settlement with BofA a credit positive, but did not change its ratings.

Other active bond insurers in the market carry ratings in the double-A category. Assured Guaranty Municipal Corp. is rated AA- by Standard & Poor’s, although it lost its Aa3 rating from Moody’s earlier this year when it was downgraded to A2.

Build America Mutual Assurance Corp., the  newest bond insurer in the market, carries a AA rating from Standard & Poor’s.

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