National Public Finance Guarantee Corporation: History, Contacts, Portal, Claims, Services, AM Best Ratings, Financial Details and Reviews

The National Public Finance Guarantee Corporation has paved the way since 1985.

For nearly 40 years, they’ve been the backbone behind schools, roads, and so much more across the USA.

We use stuff all the time without realizing it’s because of the National and the stability they provide.

Without their insurance, making bond financing less risky, who knows how long projects would take or if they’d get done at all?

Their guarantees are why towns, cities, and states can afford to build things.

Next rec center or subway upgrade we see, we’ll think of National enabling it behind the scenes.

National Public Finance Guarantee Corporation
National Public Finance Guarantee Corporation | photo courtesy of MBIA Guide

 

In this piece, I’m shining a light on their role.

Going to talk to people they’ve worked with for decades and help others appreciate what National contributes daily without most realizing it.

By the end, I hope anyone reading understands how National has unknowingly become synonymous with “trust” when it comes to public works and funding.

Profile table of National Public Finance Guarantee Corporation

Attribute Value
Name National Public Finance Guarantee Corporation
Type Subsidiary
Industry Financial Insurance
Founded 1985
Headquarters Purchase, New York, USA
Parent MBIA Inc.
Website n/a
Claims-paying resources $2.4 billion (as of June 30, 2023)

History of National Public Finance Guarantee Corporation

The National Public Finance Guarantee Corporation‘s history is pretty interesting.

They started as MBIA Insurance way back in 1985, but MBIA Inc. was formed even earlier in 1974 by five insurers who partnered up to guarantee municipal bonds.

In the 1980s, MBIA Inc. went public and expanded into new markets like structured finance overseas too.

Then the big change came in 2009 and split into two:

  1. National Public Finance Guarantee Corporation
  2. MBIA Insurance Corp.

National took on MBIA’s US public sector business while MBIA handled their trickier structured products that got hammered in the subprime crash.

Ever since, the National Public Finance Guarantee Corporation has been flying solo with its funding, leadership, and ratings.

It’s kind of wild to think they’ve been rolling solo for over a decade after 40 years under the MBIA banner.

But it’s clear National’s established itself well as an independent player dedicated to municipal finance.

Their past under MBIA must’ve prepared them well for the long haul.

Contacts for the National Public Finance Guarantee Corporation

National can be contacted through various channels, including phone, fax, email, and mail. Here are the contact details for National:

Customer care Phone number

The customer care phone number for National is +1 914-765-3380. This number can be used for general inquiries, claims, and complaints.

Fax number

The fax number for National is +1 914-765-3530. This number can be used for sending documents and forms to National.

Email

The email address of National is info@nationalpfg.com. This email can be used for sending feedback, suggestions, and requests to National.

Address

The mailing address of National is:

National Public Finance Guarantee Corporation, 1 Manhattanville Road, Suite 301, Purchase, NY 10577, USA

The National Public Finance Guarantee Corporation customer portal

National has a customer portal on its website that allows clients and investors to access information and services related to their insured bonds.

The customer portal can be accessed by clicking on the “Clients & Investors” tab on the homepage of.

The customer portal provides the following features:

  • Claims Information: This section provides information on how to file a claim with National, the claim process, and the claim status.
  • Insured Portfolio: This section provides a list of all the bonds insured by National, along with their ratings, maturity dates, and outstanding amounts.
  • Policyholder Documentation: This section provides the policy documents and forms for the insured bonds, such as the insurance agreement, the payment instruction form, and the notice of default form.
  • Rating Agency Reports: This section provides the rating reports and updates from the major rating agencies, such as Moody’s, Standard & Poor’s, and Fitch, for National and its insured bonds.

How to file a Claim with the National Public Finance Guarantee Corporation

National guarantees bondholders will get paid on time, which is a huge peace of mind.

If the issuer can’t make the payment for some reason, the bondholder simply files a claim with National.

Then National kicks in to make sure that payment still gets delivered no matter what.

That’s the beauty of their insurance it removes all the risk from the individual investors.

National says:

“Don’t worry, we’ve got your back. You’ll be paid even if something happens to the issuing city or state.”

No wonder they’ve been such a bedrock for public money raising all these years.

The claim process is as follows:

  • The bondholder must notify National of the payment default by sending a notice of default form to National’s claims department. The notice of default form can be downloaded from the customer portal or requested from National’s customer care phone number.
  • The bondholder must also provide proof of ownership of the insured bond, such as the original bond certificate, the confirmation statement, or the account statement.
  • National will verify the claim and the bondholder’s identity and eligibility. National will also contact the issuer of the insured bond to confirm the payment default and the amount due.
  • If the claim is valid and approved, National will make the payment to the bondholder within 10 business days of receiving the claim. National will pay the amount of principal and interest that is due on the insured bond, plus any accrued interest from the date of default to the date of payment.
  • National will subrogate the bondholder’s rights and interests in the insured bond and pursue recovery from the issuer of the insured bond. National will also share any recoveries with the bondholder on a pro rata basis, after deducting its expenses and fees.

National Public Finance Guarantee Corporation Claim Headquarters

National Public Finance Guarantee Corporation (National) specializes in insuring public finance bonds in the US and abroad.

Their claims center, located in Purchase, New York, is your point of contact for managing bondholders’ claims. You can reach them using the following methods:

The claims center is responsible for verifying and disbursing claims, collaborating with bond issuers, and handling subrogation and recovery processes for insured bonds.

The head of the claims center is Greg Diamond, Managing Director of Claims Management.

You can contact him at +1 914-765-3190 or via email at gdiamond@nationalpfg.com.

For more information, including contact details and comprehensive information on claim procedures, visit National’s website.

There, you’ll find instructions on how to file a claim with National, details on:

  1. claim processing
  2. claim status
  3. access to a customer portal

Products and Services of National Public Finance Guarantee Corporation

Products offered by National Public Finance Guarantee Corporation

National offers financial guarantee insurance for various types of public finance bonds, such as:

  • Tax-backed bonds: These are bonds that are backed by the general obligation or the tax revenue of a state, county, city, or other municipal entity. Examples of tax-backed bonds are general obligation bonds, sales tax bonds, income tax bonds, and property tax bonds.
  • Enterprise bonds: These are bonds that are backed by the revenue or the assets of a public enterprise or a public-private partnership. Examples of enterprise bonds are water and sewer bonds, electric and gas bonds, toll road bonds, and airport bonds.
  • Transportation and infrastructure bonds: These are bonds that are issued to finance transportation and infrastructure projects, such as roads, bridges, tunnels, railways, ports, and mass transit systems. Examples of transportation and infrastructure bonds are highway bonds, transit bonds, port authority bonds, and special assessment bonds.
  • Utility bonds: These are bonds that are issued by public utilities or regulated entities that provide essential services, such as water, electricity, gas, and telecommunications. Examples of utility bonds are water and sewer revenue bonds, electric and gas revenue bonds, and rural electric cooperative bonds.
  • Secondary market bonds: These are bonds that are already issued and traded in the secondary market. National can provide insurance for these bonds to enhance their credit quality and liquidity. Examples of secondary market bonds are auction rate securities, variable rate demand obligations, and tender option bonds.

Services Offered by National Public Finance Guarantee Corporation

National also offers other services related to public finance, such as:

  • Credit enhancement: National can provide credit enhancement for public finance bonds by improving their credit ratings, reducing their interest rates, and increasing their marketability.
  • Financial advisory: National can provide financial advisory services for public finance issuers and investors, such as structuring, pricing, marketing, and managing their bond transactions.
  • Risk management: National can provide risk management services for public finance issuers and investors, such as monitoring, analyzing, and mitigating the risks associated with their bond portfolios.

Affiliates and Partnership of National Public Finance Guarantee Corporation

So National is owned by MBIA Inc., which also owns a few other insurers doing related things.

One SIB company is MBIA Insurance Corporation.

They underwrite structured finance and bonds internationally.

Then there’s MBIA UK Insurance Limited across the pond they back public works and infrastructure over in Europe.

National holds it down here in the US on the muni bond side.

While all under the MBIA parent, each sub focuses on their bailiwick.

Pretty smart how they sliced things up globally.

Bet having other insurers in the fold gives National more stability too.

Cool to learn about their spot within the bigger MBIA family tree.

National also has several affiliates and partners that support its business operations, such as:

National Public Finance Guarantee Corporation AM Best Reviews

AM Best is a credit rating agency that focuses specifically on insurers.

They evaluate insurance companies on factors like:

  1. financial strength
  2. business operations
  3. market position.

AM Best also analyzes bonds covered by insurance policies.

Ratings consider credit risk, volatility risk, and liquidity risk for these insured securities.

National has received favorable ratings from AM Best regarding its own financial stability, business performance track record, and overall company profile strengths.

AM Best views National positively across these core evaluation categories.

As of April 9, 2023, AM Best has assigned the following ratings and outlooks to National:

AM Best’s ratings consider National’s financial strength, performance history, and strong market presence in public finance.

They also recognized National’s diversified portfolio, prudent underwriting practices, and efforts to further strengthen its risk management and capital position in recent years.

Bonds carrying National insurance similarly received positive ratings based on strengthened credit quality, risk exposure, and liquidity factors.

AM Best’s ratings for National and the bonds it insures reflect the credit enhancement offered by National’s financial guarantee insurance.

Specifically, Best notes that insured bonds have a low likelihood of default, high recovery prospects, and strong market demand.

Best’s rationale also acknowledges that National’s insurance policies benefit bonds through the timely payments of principal and interest if the issuer defaults.

The policies also grant the nation certain legal rights like subrogation to pursue repayment from the issuer. National then shares any recoveries with bondholders after expenses.

Table of Ratings for the National Public Finance Guarantee Corporation

The following table summarizes the ratings and outlooks of National and its insured bonds from the major rating agencies as of April 9, 2023:

Rating Agency National Rating Insured Bonds Rating
AM Best A (Excellent) or Stable AA /aa / Stable
Moody’s A3: Stable Aa3: Stable
Standard & Poor’s A- stable AA / Stable
Fitch A stable AA / Stable

National Public Finance Guarantee Corporation Coverage details

National issues insurance policies to bond issuers that provide coverage in the event of default.

The policy obligates nationals to make principal and interest payments if the issuer fails to do so.

It also allows the nation certain rights, like subrogating the bondholder’s position to pursue repayment from the issuer.

National is then entitled to share any recoveries with the bondholder after expenses.

The specific policy coverage details vary based on bond factors like type, term, and structure. However, common aspects include:

  1. The maximum liability amount for the National
  2. The duration of the coverage period
  3. Whether coverage is unconditional or depends on the cause of default
  4. Exclusions for issues like fraud or illegal acts

However, some of the common coverage details are as follows:

  • Coverage amount: The maximum amount a National will pay is usually equal to the principal plus any accrued interest from issuance to default.
  • Coverage period: The duration of the policy is usually equal to the bond’s maturity unless terminated earlier by the national or issuer.
  • Coverage scope: The extent of National’s payment obligation Can be unconditional or conditional based on policy terms. Unconditional pays regardless of cause; conditional only pays for specified events, like disasters.
  • Coverage exclusions: situations or events not covered by the policy, usually specified in the document. This may include fraud, misrepresentation, breach of contract, negligence, or illegal acts by the issuer or bondholder.

Table of Financial Details of National Public Finance Guarantee Corporation

The following table summarizes the financial details of National as of June 30, 2023:

Financial Metric Value
Total assets $4.7 billion
Total liabilities $2.3 billion
Total equity $2.4 billion
Net income $76 million
Net premiums earned $112 million
Net investment income $64 million
Loss and loss adjustment expenses $28 million
Operating expenses $72 million
Claims-paying resources $2.4 billion
Insured portfolio $86 billion
Number of insured bonds 3,456
Average rating of insured bonds AA

Customer reviews of National Public Finance Guarantee Corporation

What are the benefits of a National Public Finance Guarantee Corporation for investors?

The National can provide investors with some benefits:

Benefits

  • Protection against issuer default and downgrade risk: If an issuer defaults on its debt obligations, National will be obligated to pay the principal and interest on the bonds. This can protect investors from losses that they would otherwise incur if the issuer defaults.
  • Enhancing liquidity for secondary market trading: National guarantees can enhance liquidity for secondary market trading of bonds. This is because investors are more willing to purchase bonds with a National guarantee, as they know that the bonds will be paid if the issuer defaults.
  • Simplifying risk assessment: National guarantees can simplify risk assessment for investors. This is because investors do not need to worry about issuer default risk as much when they are investing in bonds with a National guarantee.

Drawbacks

  • Reduced Potential Returns: Because National guarantees diminish the risk of issuer default, investors might request lower interest rates on the bonds. Consequently, investors could experience diminished returns on their investments.
  • Limited Participation in Potential Gains: If the issuer’s creditworthiness improves, those holding National-guaranteed bonds won’t directly benefit from any increase in the bonds’ value, as the guarantee remains unchanged.
  • Greater Dependence on the Guarantor: Investors become more reliant on the financial stability of the guarantor, National Public Finance Guarantee Corporation (National), as their protection against issuer default hinges on National’s capacity to fulfill its commitments.
  • Potential for Moral Hazard: If investors view National as a safety net, issuers may have less incentive to uphold sound financial practices, potentially elevating the risk of future defaults.

Conclusion

National Public Finance Guarantee Corporation is a prominent financial insurance company that offers assurances for public finance bonds, both in the United States and abroad.

The company boasts a robust financial foundation, solid operational performance, a favorable business profile, and prudent enterprise risk management.

National has also established a strong foothold in the market, maintains a diversified and high-quality insured portfolio, and employs a cautious approach to underwriting and reserving.

The National’s financial guarantee insurance serves as a valuable tool for credit enhancement, risk management, and financial advisory services, benefiting both public finance issuers and investors.

Its financial stability, operational excellence, and business standing have earned recognition and favorable ratings from major rating agencies.

Customers of National express satisfaction, trust, and loyalty towards the company and its offerings.

National stands as a comprehensive and trustworthy partner in the realm of public finance.

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