strategy, risk management, and leadership.
Efforts under way to launch new monoline bond issuers
Several efforts are under way to launch new monoline municipal bond insurers, although none has gained traction so far.
At least two, backed by the Washington-based National League of Cities and a consulting firm, have sought government help to get started, so far without success.
The National League of Cities is seeking an interest-free federal loan of $5 billion to get its planned mutual company started, said Cathy Spain, director, the center for enterprise programs, at the League.
“At this point, because of the lack of a groundswell of stories about cities not having access to the market, we have not been successful in getting the money,” she said. “We've continued to explore the possibility of finding other sources of capital which would still be affordable,” including private capital that “might be an inducement for the feds helping us out, too.”
Robert M. Smith, Somerset, Calif.-based executive vp of consulting firm HRF Associates L.L.C., which is seeking a $25 billion federal loan to launch a municipal bond insurance company, said Washington has been preoccupied with other issues.
“I think if (U.S. Treasury Secretary Timothy Geithner) or President Obama were actually to have an awareness of this plan, it would be given serious consideration, but unfortunately I don't believe it has gotten to that level yet,” Mr. Smith said.
Last year, MBIA Inc. ceded its U.S. public finance business to a separate entity, National Public Finance Guarantee Corp., and hopes to begin writing new municipal bond insurance business, said a spokesman for the Armonk, N.Y.-based insurer, whose units no longer have a AAA rating.
It is being held up, though, by litigation brought by a group of banks objecting to the split in its business, and by its current ratings below AAA. It hopes to have the situation resolved this year, the spokesman said.
“We view the litigation as sort of the critical path towards removing the question mark in the minds of investors about National and getting the ratings up to a level to facilitate writing material amounts of new business,” he said.
Other entities that have been formed to write new business, but have not yet started, include the Municipal and Infrastructure Assurance Corp. and BondModel Co. L.L.C., both based in New York.
Re: Emory Dawson Joins HRF Associates as Senior Vice President - August 2009
Press Release
Bond Buyer ArticleEmory Dawson, a widely respected 29 year veteran of municipal finance has joined HRF Associates LLC. The addition of Mr. Dawson comes as the firm gathers momentum toward realizing its vision for a comprehensive solution to the crisis in the municipal credit market.
Re: Comparisons of HRF Associates' Plan ("Monitor Assurance") to other proposals - June 2009
Smith's Research & Ratings Bond Buyer ArticleHRF Associates LLC's plan to restore liquidity and credibility to the municipal bond market has drawn comparisons to a plan proposed in Congress and a plan proposed by the National League of Cities (NLC). Read the comparisons that have appeared in The Bond Buyer and Smith's Research & Gradings.
Re: HRF Associates Announces Plan to Create New "Issuer-Focused" Financial Guaranty Company - May 2009
Press Release Bond Buyer ArticleHRF Associates LLC's announcement (as reported in The Bond Buyer) and press release calling for the formation of a modified-mutual financial guaranty company dedicated to the needs of the municipal market.
Re: The need for the Rating Agencies to update their Financial Guaranty Stress Test Models - February 2009
HRF Associates LLC's commentary (as reported in The Bond Buyer) supporting the formation of a mutual financial guaranty company and calling on the rating agencies to re-emphasize credit measures over equity measures in assessing the credit quality of financial guaranty companies.
Re: NCOIL's Steering and Financial Services & Investment Products Committees public hearing on the need for regulation of the controversial Credit Default Swap (CDS) market - January 2009
Press Release from NCOIL regarding Chairman Morelle's testimony to the US House of Representatives Committee on Agriculture. In his testimony Chairman Morelle has substantially adopted the view of HRF Associates LLC with respect to Credit Default Swaps and their regulation.
Written Testimony of NCOIL Financial Services & Investment Products Committee Chair Assemblyman Joseph D. Morelle (NY) before the US House of Representatives Committee on Agriculture calling for state regulation of credit default swaps (CDS)and stating that CDS are “species of insurance” and “best left to the regulatory purview of the states.” In his testimony Chairman Morelle has substantially adopted the view of HRF Associates LLC with respect to Credit Default Swaps and their regulation.
Article from National Underwriter Property & Casualty concerning the testimony before the NCOIL Committees including quotes from HRF Associates LLC's Executive Vice President, Thomas Hoens' oral testimony.
Article from Life and Health National Underwriter concerning the testimony before the NCOIL Committees including quotes from HRF Associates LLC's Executive Vice President, Thomas Hoens' oral testimony.
Written Testimony of Thomas Hoens, HRF Associates LLC's Executive Vice President, submitted to NCOIL.
List of witnesses appearing before the NCOIL Steering and Financial Services & Investment Products Committee including links to their prepared testimony.
*The National Conference of Insurance Legislators ("NCOIL") is an organization of state legislators whose main area of public policy interest is insurance legislation and regulation. Most legislators active in NCOIL either chair or are members of the committees responsible for insurance legislation in their respective state houses across the country.
Re: Bankruptcy filing of COPIA: The American Center for Wine, Food, and the Arts and its impact on ACA's claims paying ability - December 2008
Article from The Bond Buyer with quotes from HRF Associates LLC's Executive VP Thomas Hoens regarding COPIA's bankruptcy and its impact on ACA Financial Guaranty's financial position. Following the settlement agreement COPIA was ACA's single largest exposure ($77 million in par) compared to slightly over $100 million in policyholder's surplus at ACA.
Article from The New York Times regarding COPIA's bankruptcy filing.
Official statement from ACA Financial Guaranty regarding COPIA's filing and ACA's involvement.
Re: "Good Bank / Bad Bank" structures - November 2008
HRF Associates LLC's commentary (as reported in The Bond Buyer) regarding the risks inherent in using Federal bailout monies to create "Good Bank/Bad Bank: structures among the bond insurance companies.
Re: Regulation of the Financial Guaranty Industry - October 2008
HRF Associates LLC's commentary (as reported in The Bond Buyer) regarding the need for comprehensive regulatory changes in the bond insurance industry.
Re: ACA Financial Guaranty Restructuring - August 2008
HRF Associates LLC's commentary (as reported in The Bond Buyer) regarding ACA Financial Guaranty Corp.'s restructuring and settlement agreement as approved by the Maryland Insurance Administration.
Maryland Insurance Administration's Press Release announcing the settlement reached among ACA and the structured counterparties.
Maryland Insurance Administration's Order formally approving the settlement and restructuring of ACA.