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BOND INSURERS WILL SMASH RECORDS, NEW FITCH REPORT SAYS -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 10 /PRNewswire/ -- Bond insurers will break more records in 1993, according to "Bond Insurers Smash Records," a report being published Monday by Fitch.
 The report projects this year's insured long-term municipal volume at $110 billion, up 38 percent from 1992. This boom, coupled with bond insurers' increased penetration into nonmunicipal credit will push industry outstanding exposure close to $750 billion, up 24 percent from 1992's $600 billion, and more than double the $300 billion of only five years ago.
 The seemingly endless refunding surge will boost earnings and returns. Annualized return on equity (ROE) for the first half of 1993 shows AMBAC leading the field with a superb 19.9 percent, followed by MBIA at 18.9 percent and FGIC at 16.6 percent. All three are well above the 13 percent industry average of the past five years.
 Additional activity is expected in the equity markets. Pending ownership changes at Asset Guaranty, Capital Guaranty, Enhance Re, and FSA mean that by 1994, the public could own nearly two thirds of bond insurers' equity. This would be up from 49 percent last year and 4 percent in 1989. However, blemishes from commercial real estate defaults, premium rate competition, and a nagging uncertainty about the actual strength of guarantors will limit profitability and insured bondholder protection.
 -0- 9/10/93
 /CONTACT: Mark H. S. Cohen of Fitch, 212-908-0512/


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Publication:PR Newswire
Date:Sep 10, 1993
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