National Public Finance Guarantee Corporation Comments on its Exposure to the City of Detroit, Michigan
In response to investor inquiries, National Public Finance Guarantee
Corporation (National), an indirect subsidiary of MBIA Inc. (NYSE: MBI),
today confirmed that it has approximately $100.7 million of insured
exposure to the general obligation debt of the City of Detroit,
Michigan. National has additional exposures to various City of Detroit
issues totaling $2.4 billion that are secured by distinct revenue
streams.
The following is a summary of National’s insured exposure as of December
31, 2012 to various bonds issued by the City of Detroit:
|
Issuer
|
|
Exposure (Gross)
|
|
Detroit Unlimited Tax GO
|
|
$100,725,000
|
|
|
|
|
|
General Obligation Exposure
|
|
$100,725,000
|
|
|
|
|
|
City of Detroit Downtown Development Authority Tax Increment Bonds
(Development
Area #1 Projects)
|
|
$70,980,000
|
|
City of Detroit Downtown Development Authority Convention Facility
Special
Tax Revenue Bonds (Cobo Hall Project)
|
|
$23,919,185
|
|
City of Detroit Building Authority Revenue Bonds (Parking & Arena
System)
|
|
$9,970,000
|
|
City of Detroit Water Supply System Revenue Bonds
|
|
$1,084,452,482
|
|
City of Detroit Sewage Disposal System Revenue Bonds
|
|
$1,208,124,383
|
|
|
|
|
|
Revenue Bond Exposure
|
|
$2,397,446,050
|
|
|
|
|
|
Total City of Detroit Exposure
|
|
$2,498,171,050
|
|
|
|
|
“Should the City of Detroit fail to make a required debt service payment
for any reason, including a bankruptcy filing, National’s insured
bondholders are guaranteed their scheduled interest and principal
payments on time and in full,” said Adam Bergonzi, National’s Chief Risk
Officer. “National will continue to monitor the situation closely in the
coming months as the city and state work to resolve Detroit’s fiscal
crisis.”
Copies of the relevant policyholder documentation as well as a
comprehensive listing of National’s insured portfolio can be found on
National’s website at www.nationalpfg.com.
National, headquartered in Armonk, New York, is the world’s largest U.S.
public finance-only financial guarantee insurance company.
Forward-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. These risks and uncertainties
could affect financial performance or could cause actual results to
differ materially from estimates contained in or underlying MBIA Inc.’s
or National’s forward-looking statements. These risks and uncertainties
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.
