Aaa/AAA/AAA Financial Guarantees
FSA provides Aaa/AAA/AAA financial guaranty insurance for a broad range of financings, including:
- Municipal bonds and loans
- Infrastructure financings, including public-private partnership (PPP) financings, those done under the U.K. Private Finance Initiative (PFI), other eligible project financings, regulated utility bonds or loans, and debt of government-sponsored enterprises
- Asset-backed securities collateralized by consumer, residential or corporate receivables
- Credit default swaps (synthetic securities)
- Other structured financings
FSA's basic financial guaranty insurance policy assures that if the issuer of an insured bond cannot make any scheduled principal or interest payment, FSA will make the scheduled payment on time and in full. This unconditional, irrevocable guaranty covers all types of risk, including fraud.
The FSA guaranty bridges differences between the needs of investors and debt issuers and offers significant benefits to both sides. In addition to insuring bonds, FSA guarantees bank loans and other instruments, including credit default swaps.
Reliable Aaa/AAA/AAA Financial Strength
Our conservative underwriting and risk management protect the long-term value of our guaranty. Only investment-grade issues are eligible for FSA insurance, and we focus on two principal markets, public finance and asset-backed finance, where defaults are rare and loss severity tends to be low. Our public finance transactions have government support or finance projects with essential public purposes. In the asset-backed market, we insure obligations backed by diversified collateral pools and structured to FSA's standards.
Securities guaranteed by FSA are rated Triple-A based on FSA's financial strength ratings from Fitch, Moody's, Standard & Poor's and Rating and Investment Information. The market's recognition of our superior financial strength leads to broad demand and an attractive trading value for our guaranty.