FINANCIAL GUARANTEE INSURANCE AND PERFORMANCE BONDS
FINANCIAL INSTITUTIONS USE OUR FINANCIAL GUARANTEE TO LOWER COSTS OF FUNDS AND DIVERSIFY FUNDING SOURCES. INVESTORS RELY ON OUR GUARANTEE FOR PAYMENT OF PRINCIPAL AND INTEREST WHEN DUE, AND ALSO BENEFIT FROM OUR CREDIT UNDERWRITING, NEGOTIATED TERMS, SURVEILLANCE AND, IF NECESSARY, REMEDIATION.
Royal Chartered Insurance – RCI provides financial guarantees for municipal bonds, public infrastructure financings, and structured financings. Our reinsurance strategic partners support the direct insurance businesses and have provided reinsurance to unaffiliated financial guarantee insurance companies.
GLOBAL INFRASTRUCTURE FINANCE
Royal Chartered Insurance – RCI works with local and sovereign governments, regulated utilities, and private-sector developers and operators, along with their bankers and advisors, to reduce the medium- and long-term funding cost of essential projects and services in countries with investment-grade sovereign ratings.
Among the issuers who can benefit are:
- Public-private partnership (PPP) and private finance initiative (PFI) projects
- Private infrastructure companies
- Regulated utility companies
- Sovereign issuers
- Municipal issuers
- Government-sponsored enterprises
Guaranteed infrastructure financings have the characteristics to meet fundamental demand from pension funds, insurance companies, and other institutional investors seeking long-tenor, low-risk investments that are well-matched to distant future liabilities. They also help banks compete for business, increase returns and manage lending capacity.
In addition to our guarantee, we add value through our credit skills, ability to negotiate documentation appropriate for our guarantee, and ongoing surveillance capability. Our guarantees help issuers gain capital market access and achieve broader distribution in both domestic and cross-border markets, while providing investors credit protection and liquidity.
Our broad experience encompasses highways, bridges, tunnels, airports, rail projects, hospitals, water, and waste management facilities, gas and electric distribution systems, government buildings, convention centers, stadiums, universities, and other infrastructure.
We provide credit enhancement for listed bonds, private placements with sole or a restricted number of institutional investors, and bank loans. We apply our guarantee in both primary and secondary markets and to issues with fixed, floating, or inflation-indexed interest rates.
We guarantee only transactions that finance essential public projects or services. We require that both the transaction’s underlying credit quality and the sovereign rating of the country of origin be at least investment-grade, and we apply other criteria appropriate for the transaction’s revenue sources, credit characteristics, transaction structure and expected return.
GLOBAL STRUCTURED FINANCE
Royal Chartered Insurance – RCI works with banks, issuers, finance companies, asset managers, and their advisors to provide cost-effective credit enhancement for structured finance transactions in markets around the world. Our guarantee improves the creditworthiness, marketability, and market liquidity of traditional consumer and commercial asset-backed securities in both new issue and secondary markets, and enables efficient risk transfer in public or private transactions for financial institutions, including banks, asset managers, and insurance companies.
We work with financial institutions, including banks, asset managers, and insurance companies to help them manage their asset and liability portfolios efficiently in light of economic variables and regulatory constraints. Use of our guarantee often allows an institution to reclassify assets in order to create new capacity, reduce allocated capital to achieve cost-efficient compliance with internal or regulatory capital requirements, or distribute risk by securitizing assets.
Our long experience in this market allows us to work with a wide range of asset portfolios, including both traditional and recently developed asset types. Examples include:
- bank capital relief
- multi-seller conduits
- new markets tax credits
- insurance premium finance
- structured settlements
Our underwriters work closely with each institution to understand its unique circumstances and then to tailor a financial guarantee suited to its specific needs.
Our experienced staff focuses on understanding the objectives and needs of various types of customers. We have the resources to respond in a timely manner and to negotiate terms that meet the issuers’ needs, the demands of the marketplace and our credit requirements.
At a minimum, transactions must be of investment-grade quality before RCI will guarantee them. In addition, each transaction must be in an approved asset category, be structured with appropriate legal and technical safeguards, and fit within our single-risk and aggregate-risk guidelines. We continually assess the impact of the economic environment on potential transaction performance and adjust our criteria accordingly.
These services are provided by the terms and conditions of Royal Chartered Insurance.