Kroll Bond Rating Agency (KBRA) assigns an insurance financial strength rating (IFSR) of AA+ with a Stable Outlook to Assured Guaranty (Europe) SA (“AG France”). KBRA’s IFSR rating on AG France is based on the company’s strong corporate governance structure, experienced underwriting team and robust capital support from its parent company, Assured Guaranty Municipal Corp. (“AGM”) (KBRA rating AA+/Stable). The Stable Outlook reflects the strength and stability of the legal support agreements as well as the current Stable Outlook for AG France’s parent company, AGM.

Assured Guaranty Ltd. established AG France to address the impact of the United Kingdom's decision to withdraw from the European Union. AG France will provide a platform to write business within the EU and to administer EU policies currently insured by Assured Guaranty (Europe) plc ("AGE"). AG France is a licensed insurer regulated by the Autorité de Contrôle Prudentiel et de Résolution and can transact insurance business within the EU. While AG France is a separate legal entity, the company will rely heavily on the direct administrative support of Assured for enterprise risk management, information technology, credit underwriting and operations.

AG France will initially have approximately $200 million of claims-paying resources (as defined by KBRA) through a contribution from AGM coinciding with the transfer of approximately $10.0 billion of gross par from affiliate company, Assured Guaranty (Europe) plc. The ceded portfolio from AGE will consist of approximately 50 risks/exposures primarily in the infrastructure finance, regulated utilities, and other public finance sectors, which are representative of the European public finance market. As a result of the reinsurance support provided to AG France by Assured affiliates, AG France will have a net leverage of approximately 30x. KBRA considers AG France’s financial position strong due to a combination of intragroup reinsurance and support arrangements, which serve to bolster the company’s stand-alone capital base and are a key element of the rating.

Rating Sensitivities

Since the financial crisis, the financial guaranty market has operated within a challenging capital markets environment of historically low interest rates, narrow credit spreads, and reduced demand for bond insurance in the traditional public finance markets. A sustained improvement in the overall environment that contributes to financial guaranty insurance growth at Assured affiliates, if managed in a prudent and risk sensitive manner, could positively affect the rating.

The expertise of the management team, particularly with respect to their experience navigating through the difficult credit cycle of the financial crisis, has fostered a robust risk management and surveillance framework across Assured. The rating is sensitive to material changes in the management team or business strategy.

AG France derives significant financial strength from the support agreements with its parent, AGM. Downward or upward changes in AGM’s IFSR rating would put similar directional pressure on AG France’s rating.

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.