Radian and the National League of Cities Announce Agreement to Explore Formation of a New Mutual Bond Insurance CompanyLast update: 9/26/2011 8:00:04 AMPHILADELPHIA, Sep 26, 2011 (BUSINESS WIRE) -- Radian Group Inc. and the National League of Cities, a non-profit association of cities and state municipal leagues (NLC), today announced an agreement between NLC and Radian's financial guaranty subsidiary, Radian Asset Assurance Inc., to explore the formation of a new public finance mutual bond insurance company. NLC began to pursue the creation of the first-ever mutual bond insurance company in response to the need for expanded capacity in the bond insurance industry. Donald J. Borut, NLC Executive Director, praised Radian for its willingness to work with NLC in pursuing this new and compelling opportunity. Borut said that "Radian is an established and experienced bond insurer that has the resources, people, infrastructure, transparency, and vision to help NLC, its members, and the thousands of local governmental issuers that access the municipal bond market each year." S.A. Ibrahim, Radian's Chief Executive Officer, added, "We are delighted to work with NLC, whose leadership, expertise and reputation in supporting municipal issuers are unmatched. We look forward to the opportunity to leverage Radian's knowledge of municipal bond insurance for NLC members." The objective of creating a next generation bond insurer is to provide bondholders with a superior level of credit enhancement, while allowing municipal issuers to benefit from lower-cost financing. "A mutual bond insurance company with a public finance book of business would restore capacity that was lost in recent years," noted David Beidler, President of Radian Asset Assurance Inc. "More importantly, the mutual insurance company structure, with the issuers as members, offers assurance to bondholders that the company will not deviate from its public finance mission." While Radian and NLC are still working on the details of the structure, they anticipate it will involve the support of private capital from third-party investors.
