Fitch Rates MBIA Inc.'s $100 Million Offering `AA'.Business EditorsNEW YORK--(BUSINESS WIRE)--Nov. 29, 2000 Fitch assigns its `AA' rating to MBIA MBIA Montana Building Industry Association MBIA Municipal Bond Insurance Association MBIA Michigan Boating Industries Association MBIA Municipal Bond Investors Assurance MBIA Massachusetts Brain Injury Association MBIA Maryland Business Incubation Association Inc.'s $100 million 40-year public income notes (PINES) offering. The PINES will bear interest at the rate of 8.0% per year. MBIA Insurance Corp. (MBIA), MBIA Inc.'s principal subsidiary, is a monoline financial guarantor. Fitch rates the insurer financial strength of MBIA `AAA'. MBIA Inc.'s debt rating is based on stable revenue flows and extremely strong coverage levels. MBIA Inc. had a $6.7 billion investment portfolio, $2.4 billion of deferred premium revenue, and $838 million of present value installment premiums at Sept. 30, 2000. These resources produce stable and predictable revenue flows. MBIA Inc.'s net income for the first nine months of 2000 was $392 million. MBIA Inc.'s long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. was $589 million and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $3.9 billion at Sept. 30, 2000. Factoring in anticipated retirements results in a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma long-term debt-to-capital ratio of 15.0%. Long-term debt-to-capital ratios of 15%-20% are considered moderate for a financial guarantor. The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Insurance Department permits MBIA to upstream dividends to MBIA Inc. up to the lesser of 10% of statutory surplus or 100% of adjusted net investment income for the last 12 months, without prior approval. In MBIA's case, 10% of surplus is the limiting factor. At Sept. 30, 2000, statutory surplus was $2.424 billion, resulting in a $242 million annual dividend limit. Annual interest costs, including the incremental debt, are expected to be approximately $60 million. Therefore, permitted dividends provide 4.02 times (x) interest coverage, exclusive of cash, marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , and lines of credit already available at the holding company level. Fitch's `AAA' insurer financial strength rating on MBIA reflects the company's experienced management team, zero-expected loss underwriting strategy, superior surveillance, high quality investment portfolio, strong capital adequacy, and diversified book of business. MBIA is the largest guarantor of U.S. municipal bonds, asset- and mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. (ABS/MBS), and international transactions. Holding company subsidiaries provide investment management, guaranteed investment contracts (GICs), and revenue enhancement revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. services to public sector clients. MBIA had insured net par in-force of $405 billion at Sept. 30, 2000, supported by claims-paying resources of $8.9 billion, $4.4 billion of which was qualified statutory capital. At 45.3:1, MBIA's net par outstanding to total claims-paying resources ratio is the lowest (strongest) among the four major 'AAA' rated U.S. financial guarantors. |
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