"MUNICIPAL AND INFRASTRUCTURE ASSURANCE CORPORATION APPROVED FOR"
Municipal and Infrastructure Assurance Corporation 245 Park Avenue Telephone (212) 672-1835 New York NY 10167 Facsimile (212) 672-1899 UNITED STATES Internet www.miacassurance.com = = Media Release MUNICIPAL AND INFRASTRUCTURE ASSURANCE CORPORATION APPROVED FOR NATIONAL LICENSING PILOT PROGRAM New York, February 24, 2009 – Municipal and Infrastructure Assurance Corporation (MIAC), a new financial guaranty insurance company licensed in the State of New York, today announced that it has been approved for participation in an expedited licensing pilot project administered by a working group of the National Association of Insurance Commissioners (NAIC). MIAC anticipates it will now be able to move quickly to become a licensed financial guaranty insurance company in all 56 NAIC- member jurisdictions. “This approval is a key milestone for MIAC. It accelerates our application to receive the licensing necessary to commence providing the new bond insurance capacity that is so urgently needed by the municipal market,” said Richard Kolman, Executive Vice Chairman of MIAC. “Participants across the US public finance market continue to emphasize their strong demand for new long term credit enhancement capacity from a clean, well-capitalized bond insurer unencumbered by legacy structured finance exposures. Issuers, investors, and key regulatory and elected officials have uniformly expressed a desire for increased municipal market liquidity and they view new bond insurers, such as MIAC, as essential to normalizing the municipal bond market.” Upon receipt of its credit rating, MIAC plans to commence providing full-service municipal bond insurance, underwriting a broad range of issuers from small school districts to large state issuers. MIAC will focus on the primary issuance market, where many cities and municipal authorities are currently suffering from a lack of liquidity in the capital markets, that most industry participants believe has been exacerbated by the current lack of triple-A rated insurance capacity. Major bond insurers that previously served the municipal market have been significantly affected by credit exposures to sub-prime mortgages and other structured finance securities, leaving a vacuum of insurance capacity in the municipal market when it is most needed. “We plan to deploy our significant capital base against sound municipal risks, to assist states, cities and municipal authorities lower their cost of funding for important public infrastructure and related projects. Our clean balance sheet and sole focus on public finance will distinguish us from legacy participants in the industry and play a central role in the re-building of capacity in the bond insurance industry going forward,” said Kolman. Kolman also noted that initiatives such as MIAC, that facilitate the flow of private capital and liquidity into the municipal bond market, should relieve calls for the Municipal and Infrastructure Assurance Corporation Federal Government to commit taxpayer resources to support a similar credit enhancement program for the municipal bond market. MIAC is the third private capital response to developments in the bond insurance industry, following the recapitalization of Assured Guaranty by WL Ross & Co. and Warren Buffett’s formation of a new bond insurance company, Berkshire Hathaway Assurance Corporation. “When businesses fail in important industries that have sound long term fundamentals, private enterprise will respond by providing fresh capital for new entrants who are positioned to fill the vacuum created by the failed businesses and avoid the mistakes of the past,” Kolman commented. MIAC’s application is the second municipal bond insurer to be approved for participation in the NAIC’s pilot project for licensure in the past year. In 2008, Berkshire Hathaway Assurance Corporation (BHAC) was licensed across the United States in an expedited manner, under an initiative led by New York State Insurance Superintendent, Eric Dinallo. In 2008, Superintendent Dinallo announced a three-point plan for the bond insurance industry: 1. Bring in new capital and new players to ensure a competitive market providing bond insurance to those who need it. 2. Protect the policyholders of the distressed companies by finding solutions, including reinsurance for the municipal bonds. 3. Develop new rules for the bond insurers to prevent similar problems in the future. “MIAC’s approval for the NAIC pilot program is consistent with our goal of seeking to normalize the bond insurance industry by attracting fresh capital and new players to underwrite the issuance of the municipal bonds that help build bridges and schools across our nation,” said Superintendent Dinallo. “We were pleased to provide our support to the NAIC to facilitate their approval of MIAC for the pilot program.” MIAC’s expedited licensing process also delivers on a stated aim of the NAIC, which has sought to streamline state-specific application requirements, including the need for hardcopies of forms and supplemental information involved in Uniform Certificate of Authority (UCAA) applications, in an effort to facilitate the efficient regulatory review of new entrants in insurance industry sectors deemed of national importance. “The working group’s decision to accept MIAC’s licensing as a pilot project is a recognition of the need for new bond insurance capacity to address the severe funding issues currently facing many municipalities across the country,” said Jill Jacobi, co-chair of the NAIC’s National Treatment and Coordination (E) Working Group. “We look forward to working with MIAC and our fellow insurance regulators to facilitate the process for review of MIAC’s license application.” - MORE - = O Municipal and Infrastructure Assurance Corporation About MIAC Municipal and Infrastructure Assurance Corporation (“MIAC”) is a new financial guaranty insurance company licensed in the State of New York focused exclusively on insuring municipal and infrastructure bonds. MIAC plans to provide full-service municipal bond insurance, underwriting a broad range of issuers from small school districts to large state issuers. MIAC is focused on the primary issuance market, deploying its clean capital base against sound municipal risks. The company will only insure investment-grade municipal and infrastructure credits and will not insure any structured finance products. MIAC is committed to transparency and will place its insured portfolio and underwriting methods in the public domain – empowering issuers, financial advisors, investors and the dealer community to perform their own analysis in ascribing value to MIAC’s guarantees. MIAC is a well-capitalized, independent company, co-sponsored by the Macquarie Group, a diversified financial services firm and a global leader in the financing of public assets, and Citadel Investment Group, a diversified financial institution and global leader in alternative investment management. In addition to Macquarie and Citadel, MIAC has attracted a strong investor group, comprised of banks, pension funds and insurance companies, which are focused on building an enduring capital markets franchise. For more information, visit www.miacassurance.com. For further information, please contact: Alex Doughty (212) 231 1710 = P