Fitch Affirms ACA At `A'.Business Editors NEW YORK--(BUSINESS WIRE)--May 17, 2001 Fitch fitch: see polecat. affirms ACA ACA - Application Control Architecture Financial Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Corp.'s (ACA) insurer financial strength rating at `A'. The company insures U.S. municipal, asset- and mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. (ABS/MBS), corporates, and surety An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act. surety n. transactions. ACA generally guaranties transactions that have higher risk characteristics than those typically guaranteed by the `AAA'-rated bond insurers. For this reason, premium rates garnered by ACA are generally higher than the `AAA'-rated bond insurers. As of Dec. 31, 2000, ACA had $5.4 billion of net par outstanding supported by total claims-paying resources of $383 million including $124 million of qualified statutory capital. Fitch removed ACA from Rating Watch Negative in February 2001, following a $45 million equity infusion by its current owners and two new investors that ended nearly a year of financial uncertainty for the company. Since the equity infusion, the company has announced plans to change its business strategy, shifting its focus to more nonmunicipal transactions while maintaining a presence in the municipal market. ACA has had statutory losses since its inception due to excessive operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . As a result, the company's surplus had dropped to $76.1 million at year-end 2000 (prior to its $45 million infusion) from its year-end 1997 level of $113.5 million. The company has not had an insured claim since its inception. For a copy of the report, `ACA Financial Guaranty Corp.' published this week please visit our web site at `www.fitchratings.com.' |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion