CapMAC Increases to $500 Million Its Credit Enhancement Of GIC's For SunAmerica Life Insurance Company.NEW YORK--(BUSINESS WIRE)--Aug. 15, 1996--Capital Markets Assurance Corporation ("CapMAC") announced today that it has increased to $500 million from $200 million its surety bond surety bond An insurance fee required before a duplicate security is issued to replace one that has been lost. The fee is approximately 4% of the market value of the security to be replaced. to provide credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing for separate account guaranteed investment contract Guaranteed investment contract (GIC) A pure investment product in which a life company agrees, for a single premium, to pay at a maturity date the principal amount of a predetermined annual crediting (interest) rate over the life of the investment. ("GIC GIC See: Guaranteed Investment Contract GIC See guaranteed investment contract (GIC). ") obligations of SunAmerica Life Insurance Company. W. Richard White, a vice president at CapMAC, said, "CapMAC originally issued a $200 million surety bond in 1995 to provide credit enhancement for SunAmerica Life Insurance Company's Credit Enhanced GIC (CEGIC) program. This was the first public credit enhancement of asset-backed GIC's issued by an insurance company. As a result of CapMAC's credit enhancement, SunAmerica Life Insurance Company's separate account GIC obligations included in the CEGIC program are rated Aaa by Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. Inc. and AAA by Standard & Poor's Corporation." Carl E. Favelukes, a senior vice president at CapMAC, said, "The success of the initial transaction with SunAmerica Life Insurance Company, and the significant expansion of the program, show that investors respond favorably to well-structured transactions that offer value combined with a very high level of safety. This innovative application of CapMAC's credit enhancement and structured finance expertise has set the standard for credit enhanced GIC transactions in the industry. We look forward to supporting the continued growth and success of our client, SunAmerica." SunAmerica Life Insurance Company is headquartered in Los Angeles. It is a subsidiary of SunAmerica Inc., a diversified financial services company specializing in retirement savings and investment products and services. At June 30, 1996, SunAmerica Inc. held more than $36 billion of assets, including $23 billion on its balance sheet, more than $2 billion managed in mutual funds and private accounts, and approximately $11 billion under custody in retirement savings accounts. CapMAC is a monoline financial guarantee insurance company based in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , with representative offices in London and Paris. The company is a leading provider of credit enhancement to asset-backed securities and other structured obligations. CapMAC is rated triple-A by Standard & Poor's, Moody's, Duff & Phelps, and Nippon Investors Service. CapMAC is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of CapMAC Holdings Inc.,(NYSE NYSE See: New York Stock Exchange :KAP) which through its subsidiaries, also provides advisory and structuring services in connection with asset-backed financings; and access to funding vehicles for its customers through third-party owned and managed securitization funding vehicles. CONTACT: Mitchell Karig 212/891-6787 |
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