Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
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The available amount <strong>of</strong> each MBIA surety bond will be the initial face amount <strong>of</strong> said surety bond less the<br />
amount <strong>of</strong> any previous deposits by MBIA Corp. with the Trustee with respect to such surety bond which have not<br />
been reimbursed by the <strong>Commission</strong>. The <strong>Commission</strong> <strong>and</strong> MBIA Corp. have entered into a separate financial<br />
guaranty agreement in connection with each MBIA surety bond (the “Guaranty Agreements”). Pursuant to the<br />
Guaranty Agreements, the <strong>Commission</strong> is required to reimburse MBIA Corp,, within one year <strong>of</strong> any deposit, for the<br />
amount <strong>of</strong> such deposit made by MBIA Corp. with the Trustee under each respective MBIA surety bond.<br />
No optional redemption <strong>of</strong> the Participating Series <strong>of</strong> Bonds may be made until the MBIA surety bond is<br />
reinstated. The MBIA surety bond is held by the Paying Agent in the Debt Service Reserve Fund <strong>and</strong> is provided as<br />
an alternative to the Issuer depositing funds equal to the Debt Service Reserve Requirement for outst<strong>and</strong>ing the<br />
Participating Series <strong>of</strong> Bonds.<br />
On February 18, 2009, MBIA Inc., the parent holding company <strong>of</strong> MBIA Corp., announced that it had<br />
established a new U.S. public finance financial guarantee insurance company within the MBIA Inc. group by<br />
restructuring MBIA Corp. <strong>and</strong> its subsidiaries. As part <strong>of</strong> the restructuring, (i) the stock <strong>of</strong> MBIA Insurance Corp.<br />
<strong>of</strong> Illinois (which, effective March 19, 2009, was renamed National Public Finance Guarantee Corporation), an<br />
existing public finance financial guarantee insurance subsidiary <strong>of</strong> MBIA Corp., was transferred to a newly<br />
established intermediate holding company, National Public Finance Guarantee Holdings, Inc. (“National Holdings”),<br />
also a subsidiary <strong>of</strong> MBIA Inc.; <strong>and</strong> (ii) effective January 1, 2009, MBIA Corp. ceded to National all <strong>of</strong> MBIA<br />
Corp.’s U.S. public finance business, including the Policy, pursuant to that certain Quota Share Reinsurance<br />
Agreement between MBIA Corp. <strong>and</strong> National (the “Reinsurance Agreement”). Pursuant to the Reinsurance<br />
Agreement, MBIA Corp. paid to National approximately $2.89 billion (which equals the net unearned premium, loss<br />
<strong>and</strong> loss adjustment expense reserves, net <strong>of</strong> the 22 percent ceding commission that MBIA Corp. received) as a<br />
premium to reinsure the policies covered under the Reinsurance Agreement (each a “Covered Policy”). The Debt<br />
Service Reserve Fund Surety Bond is a Covered Policy. National was further capitalized with $2.09 billion from<br />
funds distributed by MBIA Corp. to MBIA Inc. as a dividend <strong>and</strong> return <strong>of</strong> capital, which was ultimately contributed<br />
to National through National Holdings. The Reinsurance Agreement provides a cut-through provision enabling the<br />
holder <strong>of</strong> a Covered Policy to make a claim for payment directly against National. In addition, National has also<br />
issued second-to-pay policies for the benefit <strong>of</strong> the holder <strong>of</strong> a Covered Policy, granting such policyholder the right<br />
to make a claim directly against National if MBIA Corp. did not honor such claim.<br />
National Public Finance Guarantee Corporation (“National”)<br />
National is an operating subsidiary <strong>of</strong> MBIA Inc., a New York Stock Exchange listed company. MBIA<br />
Inc. is not obligated to pay the debts <strong>of</strong> or claims against National. National is domiciled in the State <strong>of</strong> New York<br />
<strong>and</strong> is licensed to do business in <strong>and</strong> subject to regulation under the laws <strong>of</strong> 47 states, the District <strong>of</strong> Columbia <strong>and</strong><br />
the Commonwealth <strong>of</strong> Puerto Rico.<br />
The principal executive <strong>of</strong>fices <strong>of</strong> National are located at 113 King Street, Armonk, New York 10504 <strong>and</strong><br />
the main telephone number at that address is (914) 765-3333.<br />
Regulation<br />
As a financial guaranty insurance company licensed to do business in the State <strong>of</strong> New York, National is<br />
also subject to the New York Insurance Law which, among other things, prescribes minimum capital requirements<br />
<strong>and</strong> contingency reserves against liabilities for National, limits the classes <strong>and</strong> concentrations <strong>of</strong> investments that are<br />
made by National <strong>and</strong> requires the approval <strong>of</strong> policy rates <strong>and</strong> forms that are employed by National. State law also<br />
regulates the amount <strong>of</strong> both the aggregate <strong>and</strong> individual risks that may be insured by National, the payment <strong>of</strong><br />
dividends by National, changes in control with respect to National <strong>and</strong> transactions among National <strong>and</strong> its affiliates.<br />
The MBIA Insurance Policy is not covered by the Property/Casualty Insurance Security Fund specified in<br />
Article 76 <strong>of</strong> the New York Insurance Law.<br />
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