ARMONK, N.Y.--(BUSINESS WIRE)--National Public Finance Guarantee Corp. (“National”) today released a study on the economic and political environments of Puerto Rico, and their impacts on the Commonwealth’s ability to manage its fiscal affairs. The study concludes that, despite the island enduring its longest recession since the Great Depression, recently implemented economic stabilization measures should allow the Commonwealth and its debt issuers to improve their ability to raise capital and increase private-sector capital participation.
“The Commonwealth has made significant efforts to address its structurally unbalanced fiscal environment,” said Christopher Chafizadeh, managing director and head of Public Finance at National. “We’ve seen solid progress in closing budgetary gaps, enforcing fiscal and stabilization reform and passing tax amendments. Additionally, the current Administration has initiated a major push toward fiscal transparency. These achievements go a long way toward furthering the investment community’s level of comfort with Puerto Rico’s ability to effectively manage its fiscal affairs.”
Puerto Rico has a long history of protecting its access to the capital markets and enjoys a reputation for never having defaulted on a debt service payment. While significant challenges to the stabilization of the Commonwealth’s economy undoubtedly lie ahead, National believes that the steps already taken by Puerto Rico are a strong indication of its commitment to secure its continued access to the capital markets and to maintaining investment grade ratings.
National and its affiliates have insured Puerto Rico’s debt for almost 25 years, and have a deep understanding of the economic, political and demographic factors that drive the stability of the Commonwealth. National’s measured approach to underwriting permits the Company to identify the underlying strengths and weaknesses of these credits and to selectively insure those that satisfy its strict analytical guidelines. Today, National’s insured portfolio contains approximately $7.3 billion gross par of Puerto Rico public sector debt, all of which is rated investment grade.
The new study can be found on National’s website at www.nationalpfg.com, along with other sector studies covering Toll Roads, Public Power, Airports, Military Housing, California Redevelopment & Tax Allocation Bonds and Higher Education, among others. National’s next sector study will be an analysis of the not-for-profit Health Care market.
National, headquartered in Armonk, New York, is the world’s largest U.S. public finance-only financial guarantee insurance company, with offices in New York and San Francisco. The company’s financial strength is highlighted by its $5.6 billion in claims-paying resources, $2.4 billion in statutory capital and strong embedded profitability from its $483 billion insured portfolio and $5.4 billion investment portfolio as of December 31, 2010.
This release includes statements that are not historical or current facts and are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “project,” “plan,” “expect,” “intend,” “will likely result,” “looking forward” or “will continue,” and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. These risks and uncertainties could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the MBIA Inc.’s or National’s forward-looking statements are discussed under the “Risk Factors” section in MBIA Inc.’s most recent Annual Report on Form 10-K, which may be updated or amended in MBIA Inc.’s subsequent filings with the Securities and Exchange Commission. MBIA Inc. and National caution readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. National and MBIA Inc. undertake no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such result is not likely to be achieved.