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 ...
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Financial Strength Ratings <strong>of</strong> National<br />
National’s current financial strength ratings from the major rating agencies are summarized below:<br />
Agency Ratings Outlook<br />
S&P A Outlook Developing<br />
Moody’s Baa1 Outlook Developing<br />
Each rating <strong>of</strong> National should be evaluated independently. The ratings reflect the respective rating<br />
agency’s current assessment <strong>of</strong> the creditworthiness <strong>of</strong> National <strong>and</strong> its ability to pay claims on its policies <strong>of</strong><br />
insurance. Any further explanation as to the significance <strong>of</strong> the above ratings may be obtained only from the<br />
applicable rating agency.<br />
The above ratings are not recommendations to buy, sell or hold the Series 2009 Bonds, <strong>and</strong> such ratings<br />
may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal<br />
<strong>of</strong> any <strong>of</strong> the above ratings may have an adverse effect on the market price <strong>of</strong> the Series 2009 Bonds. National does<br />
not guaranty the market price <strong>of</strong> the Series 2009 Bonds nor does it guaranty that the ratings on the Series 2009<br />
Bonds will not be revised or withdrawn.<br />
National Financial Information<br />
Based upon statutory financials, as <strong>of</strong> September 30, 2009, National had cash <strong>and</strong> admitted assets <strong>of</strong><br />
$7.2 billion (unaudited), total liabilities <strong>of</strong> $6.7 billion (unaudited), <strong>and</strong> total surplus <strong>of</strong> $0.5 billion (unaudited)<br />
determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory<br />
authorities.<br />
For further information concerning National, see the financial statements <strong>of</strong> MBIA Inc. <strong>and</strong> its subsidiaries<br />
as <strong>of</strong> September 30, 2009, prepared in accordance with generally accepted accounting principles, included in the<br />
Quarterly Report on Form 10-Q <strong>of</strong> MBIA Inc. for the quarter ended September 30, 2009, which are hereby<br />
incorporated by reference into this appendix <strong>and</strong> shall be deemed to be a part here<strong>of</strong>.<br />
Recent Litigation<br />
On March 11, 2009, a complaint was filed in the United States District Court <strong>of</strong> the Southern District <strong>of</strong><br />
New York against the Company <strong>and</strong> its subsidiaries, MBIA Corp. <strong>and</strong> National, entitled Aurelius Capital Master,<br />
Ltd. et al. v. MBIA Inc. et al., 09-cv-2242 (S.D.N.Y.). The lead plaintiffs, Aurelius Capital Master, Ltd., Aurelius<br />
Capital Partners, LP, Fir Tree Value Master Fund, L.P., Fir Tree Capital Opportunity Master Fund, L.P., <strong>and</strong> Fir<br />
Tree Mortgage Opportunity Master Fund, L.P., purport to be acting as representatives for a class consisting <strong>of</strong> all<br />
holders <strong>of</strong> securities, instruments, or other obligations for which MBIA Corp., before February 18, 2009, issued<br />
financial guarantee insurance other than United States municipal/governmental bond securities. The complaint<br />
alleges that certain <strong>of</strong> the terms <strong>of</strong> the transactions entered into by the Company <strong>and</strong> its subsidiaries (the<br />
“Transactions”), which were approved by the New York State Department <strong>of</strong> Insurance, constituted fraudulent<br />
conveyances under §§ 273, 274 <strong>and</strong> 276 <strong>of</strong> New York Debtor <strong>and</strong> Creditor Law <strong>and</strong> a breach <strong>of</strong> the implied<br />
covenant <strong>of</strong> good faith <strong>and</strong> fair dealing under New York common law. The Complaint seeks, inter alia, (a) a<br />
declaration that the alleged fraudulent conveyances are null <strong>and</strong> void <strong>and</strong> set aside, (b) a declaration that National is<br />
responsible for the insurance policies issued by MBIA Insurance Corporation up to February 17, 2009, <strong>and</strong> (c) an<br />
award <strong>of</strong> damages in an unspecified amount together with costs, expenses <strong>and</strong> attorneys’ fees in connection with the<br />
action. Defendants filed their motion to dismiss on May 6, 2009.<br />
On April 6, 2009, a complaint was filed in the Court <strong>of</strong> Chancery for the State <strong>of</strong> Delaware against two<br />
subsidiaries <strong>of</strong> the Company, MBIA Corp. <strong>and</strong> National, entitled Third Avenue Trust <strong>and</strong> Third Avenue Variable<br />
Series Trust v. MBIA Insurance Corp. <strong>and</strong> MBIA Insurance Corp. <strong>of</strong> Illinois, CA 4486-UCL. Plaintiffs allege that<br />
they are holders <strong>of</strong> approximately $400 million <strong>of</strong> surplus notes issued by MBIA Corp. (for purposes <strong>of</strong> this section,<br />
the “Notes”) in January 2008. The complaint alleges (Count I) that certain <strong>of</strong> the Transactions breached the terms <strong>of</strong><br />
the Notes <strong>and</strong> the Fiscal Agency Agreement dated January 16, 2008 pursuant to which the Notes were issued. The<br />
F-8