National Public Finance Guarantee Corporation (National), an indirect subsidiary of MBIA Inc. (NYSE: MBI), today announced that the Plan of Rehabilitation for Financial Guaranty Insurance Company (“FGIC”) that includes a Novation Agreement between FGIC and National has become effective as of August 19, 2013 (the “Effective Date”).
Covered Policies (as defined in the Novation Agreement), that previously benefited from the reinsurance agreement and second to pay policies entered into by MBIA Insurance Corporation in 2008 and subsequently assigned to and reinsured by National in 2009, have been novated to National, which now becomes the primary insurer under the policies.
“Policyholders are supported by National’s financial strength, substantial claims-paying resources and established operating platform as FGIC has been released from all future obligations under the Covered Policies,” said Dan McManus, National’s General Counsel. “We expect that Moody’s Investors Service will now apply the higher of National’s rating or the underlying rating to Covered Policies.”
Copies of the relevant policyholder documentation as well as a complete listing of National’s insured portfolio, including the FGIC Covered Policies novated to National, can be found on National’s website at http://www.nationalpfg.com/html/policyHolderDoc.aspxForward-Looking Statements 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, including, among other risks, the possibility that MBIA Inc., which is the ultimate parent company of National Public Finance Guarantee Corporation, or National will experience severe losses due to increased deterioration in its insurance portfolios; significant fluctuations in liquidity and asset values with the global credit markets; MBIA Inc.’s or National’s ability to fully implement their Strategic Plans as outlined in MBIA Inc.’s most recent Annual Report on Form 10-K; further changes in the MBIA Inc.’s or National’s credit ratings; and changes in general economic and competitive conditions. These and other factors that 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 the 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.