KBRA affirms Assured Guaranty's financial strength rating

Bermuda-based Assured Guaranty has had its AA+ financial strength rating affirmed by Kroll Bond Rating Agency(KBRA)

In a statement from credit insurer Assured Guaranty, the company said KBRA reflected the company's substantial claims paying resources, skilled management team and ability to withstand KBRA’s conservative stress scenario losses as applied across the company’s insured portfolio.

KBRA said AGC’s rating reflected its strong capital position and claims paying resources relative to conservative stress scenario losses, skilled management team and ability to withstand KBRA’s conservative stress scenario losses as applied across the company’s insured portfolio.

It added: “KBRA also reviewed AGC’s corporate governance framework, credit and risk management processes and consider them strong and reflective of industry best practices. AGC has a proven management team and a well-developed governance framework.”

KBRA also noted that the Covid-19 pandemic in addition to other events have “led to increased awareness for the financial guaranty product. An economic environment of increasing interest rates and volatile or widening credit spreads may enhance the business environment for Assured as issuers seek interest expense savings or investors consider different forms of regulatory capital relief.

"Further, a tightening credit cycle which may disproportionately impact economically sensitive taxes or issuers with weaker balance sheets may further enhance investor demand for the product.”

Dominic Frederico (pictured), President and CEO of Assured Guaranty, said: “As KBRA mentioned, demand for our product has been growing over the past several years, and the COVID-19 pandemic and other uncertainty has led to broader recognition of the protection and value our guaranty provides against unforeseen circumstances. We are pleased with the affirmation of our AA+ (Stable Outlook) rating for AGC, AGM and AGM’s UK and European subsidiaries and believe the economic conditions for increased new business remain intact. We are well positioned for future growth while maintaining our prudent credit and risk management processes.”