Financial Guarantors Credit Analysis Ratings Insurer Financial Strength CIFG Guaranty ..................................................... AAA CIFG Assurance North America, Inc..................... AAA CIFG Europe ........................................................ AAA Rating Outlook................................................... Stable Related Ratings Natixis (Foreign Currency) Long-Term IDR........................................................AA Short-Term ............................................................ F1+ Rating Outlook................................................... Stable Analysts Joo-Yung Lee +1 212 908-0560 joo-yung.lee@fitchratings.com Thomas J. Abruzzo +1 212 908-0793 thomas.abruzzo@fitchratings.com Ralph R. Aurora +1 212 908-0528 ralph.aurora@fitchratings.com Recent Developments • Ownership transfer of CIFG Holding to Natixis from Caisse Nationale des Caisse d’Epargne completed in November 2006. • Benefit of implicit parental support from Natixis. • Matrix core capital adequacy ratio of 1.15x at Sept. 30, 2006, with excess capital of $154.8 million. • Concentration in structured finance continues to increase, particularly its collateralized debt obligation (CDO) exposure. • California insurance license obtained in September 2006, with a total of 48 U.S.-jurisdiction insurance licenses obtained to date. CIFG Guaranty Summary The insurer financial strength (IFS) ratings for CIFG Guaranty (CIFG) and its two insurance subsidiaries reflect the implicit parental support from its new owner, Natixis, and the combined company’s adequate capital position in support of its high-quality, low-risk insured portfolio. Under Fitch’s Matrix simulation, CIFG had a core capital adequacy ratio (CCAR) of 1.15 times (x), with excess capital of $154.8 million as of Sept. 30, 2006. While this reflects a healthy excess as of Sept. 30, 2006, the company’s fast growth and rapid capital consumption have begun to exceed its internal capital generation rate. Given that Fitch still considers CIFG to be in its developmental stage, a larger excess capital position is expected to remain in place to offset many of the challenges facing an emerging financial guarantor. Such challenges include a high growth rate, trading disparity relative to its competitors and heavier concentration in its insured portfolio. As of November 2006 CIFG became a direct subsidiary of Natixis, a large French banking company that provides asset management, corporate and investment banking, private equity and private banking, and several specialized services. Natixis is owned 34.4% by Caisse Nationale des Caisses d’Epargne et Prevoyance (CNCE, CIFG’s former parent company, rated ‘AA’/‘F1+’ by Fitch Ratings), 34.4% by Banque Federale des Banques Populaires (BFBP, rated ‘A+’/‘F1’ by Fitch), and the balance is publicly traded. Fitch acknowledges that Natixis provides strong support to CIFG and recognizes that this support remains crucial to CIFG maintaining its ‘AAA’ IFS rating. CIFG has taken positive steps towards expanding its market position as a provider of financial guaranty insurance. The company’s profitability has increased and the company has expanded its name recognition in the U.S. municipal finance market. Fitch notes, however, that structured finance concentration continues to increase, particularly in pooled collateralized debt obligations (CDO). Furthermore, highly rated non-senior pooled CDO exposure continues to represent a notable portion of CIFG’s insured portfolio. These CDO exposures are underwritten at a very high attachment point (typically well above minimum ‘AAA’ levels) but junior to one or more tranches in the overall transaction’s capital structure. Additionally, the large concentration to pooled CDO compared to the other ‘AAA’ financial guarantors leaves CIFG more susceptible to potential weakness that may occur in that sector. Therefore, despite their high credit quality and, thus, low probability of default, such exposures pose the potential for higher loss given default relative to the senior-most tranche. CIFG also remains at a competitive disadvantage to the larger, more established financial guarantors due to its trading disadvantage and capacity constraints. These challenges have been further exacerbated by the current competitive market. May 3, 2007 www.fitchratings.com Financial Guarantors • • • • Strengths The financial strength and implied support of CIFG’s parent company. Increased profitability and new business production. Sufficient capital relative to the current insured portfolio. A relatively low-risk insured portfolio, which has resulted in no incurred losses since inception. CIFG Guaranty — Ownership Structure Groupe Nationale des Caisses d'Epargne (‘AA’/‘F1+’) Banque Federale des Banques Populaires (‘A+’/‘F1’) 34.4% 34.4% Natixis (‘AA’/‘F1+’) 100% • • • • Concerns Ability to compete with the larger, established ‘AAA’ primary financial guaranty companies. Portfolio growth outstripping internal capital formation. Lack of portfolio diversification and increased concentration in the pooled CDO sector. Continued expansion in structured finance, with some large, lower-rated investment-grade single risks. CIFG Holding 100% CIFG Guaranty (‘AAA’ IFS) 100% CIFG Europe (‘AAA’ IFS) Parent Company 100% CIFG Services, Inc. 100% Beneficial Interest Natixis Natixis combines the businesses previously undertaken by Natexis Banques Populaires (NBP, previously owned 75.6% by BFBP) and select CNCE subsidiaries, including IXIS Corporate & Investment Bank (IXIS CIB) and ISIS Asset Management Group. Natixis provides corporate and investment banking, asset management, private equity and private banking, and specialized services, including financial guaranty via CIFG, which is a direct subsidiary of Natixis. Natixis is jointly owned by CNCE and BFBP at 34.4% each, and the rest is publicly floated. Natixis benefits from the crossguarantee mechanisms in place at Groupe Caisses d’Epargne (GCE) and Groupe Banque Populaire (GBP) with its double affiliation now formalized. While CIFG does not benefit from any explicit guarantee from Natixis, Fitch expects that the parent would fully support CIFG. Voting Trust 100% Voting Interest CIFG Assurance North America, Inc. (‘AAA’ IFS) IFS – Insurer financial strength. banking. CNCE was a 65.0% owned subsidiary, with Caisse des Depots et Consignations (CDC) owning the remaining 35%, but as of late January 2007 CDC divested its stake. CNCE owns 34.4% of Natixis, CIFG’s current parent holding company. For more information, see Fitch’s full report on Groupe Caisse d’Epargne, dated Aug. 8, 2006, available on Fitch’s Web site at www.fitchratings.com. Groupe Caisse d’Epargne/Caisse Nationale des Caisses d’Epargne et Prevoyance Groupe Banque Populaire/Banque Federale des Banques Populaires GCE is a leading French cooperative banking group that is not a legal entity but operates and is regulated as one group. The group benefits from a crossguarantee mechanism that ensures the liquidity of all affiliated entities. CNCE is the group’s central body and is the holding company for the group’s two major business lines, retail banking and investment GBP is also a leading French cooperative banking group that is not a legal entity but operates and is regulated as one group. Like GCE, BFBP is the group’s central body, and a cross-guarantee mechanism ensures the liquidity of all of the affiliated entities of the group. The group is France’s fifth-largest retail banking group. CIFG Guaranty 2 Financial Guarantors Dec. 31, 2005, CIFG Europe had EUR35.1 million of equity based on French GAAP. In addition, and as of the same reporting date, CIFG Europe had gross and net par outstanding exposure of EUR8.5 billion and EUR4.8 million, respectively. BFBP owns 34.4% of Natixis. For more information, see Fitch’s full report on Groupe Banque Populaire, dated May 16, 2005, available on Fitch’s Web site at www.fitchratings.com. Company Overview CIFG Assurance North America, Inc. CIFG Holding CIFG NA was initially funded with a $100.0 million capital contribution from CIFG. Pursuant to a facultative reinsurance agreement, CIFG NA may cede up to 90% of its par written on each transaction to CIFG. CIFG NA also benefits from the support of a net worth maintenance agreement that provides that CIFG will maintain CIFG NA’s statutory capital and surplus at no less than $80.0 million. As of Dec. 31, 2006, CIFG NA had qualified statutory capital of $114.4 million. In addition, and as of the same reporting date, CIFG NA had gross and net par insured exposure of $54.6 billion and $6.9 billion, respectively. CIFG Holding is the holding company for CIFG, CIFG Assurance North America, Inc. (CIFG NA) and CIFG Europe. CIFG Holding was initially capitalized by a capital contribution from CDC IXIS (now part of Natixis), and subsequently benefited from a subordinated loan agreement from CDC IXIS as well. Having fully drawn upon the CDC IXIS subordinated loan facility, CIFG Holding entered into a $200.0 million senior loan agreement with CNCE in 2004, of which $90.0 million was immediately drawn upon and contributed as equity capital to CIFG Guaranty. An additional $8.5 million was drawn in late 2005 and retained at the holding company and used for general corporate purposes. The remaining $101.5 balance of the irrevocable loan facility is available to be drawn by CIFG Holding at any time. As of Dec. 31, 2006, CIFG Holding had consolidated shareholders’ equity of $617.1 million based on U.S. generally accepted accounting principles (GAAP). CIFG NA continues to make progress securing the remaining U.S. state licenses necessary to write U.S. municipal financial guaranties on a primary basis. Currently, CIFG NA is licensed in 48 U.S. jurisdictions, including some of the largest municipal issuers, such as California, Florida, Illinois, Massachusetts, New Jersey, New York, Pennsylvania and Texas. As of September 2006, CIFG NA obtained its California license, which is significant given California’s status as the largest issuer of municipal debt. Securing a California license should improve CIFG NA’s growth and profitability, especially because it does not have capacity constraints for California that some other financial guarantors may face. CIFG Guaranty CIFG was initially capitalized by a $280.0 million contribution from CIFG Holding in 2001. CIFG has since received additional capital contributions downstreamed from CIFG Holding in order to support ongoing and expected insured business growth. CIFG established CIFG Europe in 2001 to underwrite financial guaranty business in the European Union, and CIFG NA in 2002 to underwrite U.S. municipal and structured finance business. As of Dec. 31, 2006, CIFG had consolidated shareholders’ equity of $713.9 million based on U.S. GAAP. A voting trust was established in New York state to hold CIFG NA shares as a result of legislation in certain states prohibiting the licensing of insurance companies owned or controlled by a foreign state or agency of a foreign state. CIFG’s prior ownership included CDC, which is a French public purpose entity and was the reason for the creation of the voting trust. The voting trust has five members, none of which may be French civil servants or employees of CDC, and this structure was approved by the New York State Insurance Department, which determined that CDC does not own or control CIFG NA within the meaning of the government control legislation. Given CDC’s divestiture, the need for this voting trust is being analyzed, though CIFG will most likely unwind the structure. CIFG Europe CIFG Europe was initially funded with a EUR32.0 million capital contribution from CIFG. CIFG Europe also benefits from an annually renewable, multiyear excess-of-loss arrangement whereby CIFG will cover 100% of CIFG Europe’s cumulative losses in excess of EUR20.0 million. Furthermore, a net worth maintenance agreement requires that CIFG maintain CIFG Europe’s capital and surplus at no less than EUR20.0 million. As of CIFG Guaranty 3 Financial Guarantors CIFG Guaranty — Insured Portfolio credit spread environment and intense industry competition. Fitch believes that full investor acceptance of new market entrants takes time and for CIFG to fully eliminate pricing and trading disparities, the company will have to continue to build its reputation in the financial guaranty market to fully realize a successful franchise. ($ Mil., As of Sept. 30, 2006) Net Par Net Par (%) WA Rating* 8,369.8 2,344.7 2,334.5 1,722.5 1,421.5 1,014.1 567.8 85.8 17,860.7 13.0 3.6 3.6 2.7 2.2 1.6 0.9 0.1 27.7 ‘A–’ ‘A–’ ‘A–’ ‘A–’ ‘A’ ‘BBB+’ ‘A+’ ‘BBB+’ ‘A–’ 15,775.9 3,346.7 3,141.4 1,583.1 23,847.2 24.5 5.2 4.9 2.5 37.0 ‘AA+’ ‘AA–’ ‘AA’ ‘AA+’ ‘AA+’ Collateralized Debt Obligations Mortgage-Backed Securities Sovereign/Sub-Sovereign Asset-Backed Securities Transportation Investor-Owned Utilities Project Finance Utilities Higher Education Other Total 13,892.8 2,066.2 1,931.7 1,717.6 1,391.7 872.6 691.7 48.2 12.4 128.6 22,753.5 21.6 3.2 3.0 2.7 2.2 1.4 1.1 0.1 0.0 0.2 35.3 ‘AAA’ ‘AAA’ ‘A’ ‘AA–’ ‘A’ ‘A’ ‘AA’ ‘AAA’ ‘BBB’ ‘BBB–’ ‘AA’ Net Par Insured Exposure 64,461.3 100.0 U.S. Municipal Finance General Obligations Tax-Backed Transportation Utilities Health Care Higher Education Military Housing Other Total Insured Portfolio CIFG’s insured portfolio has continued to perform well as a result of sound underwriting, a primary focus on high-credit-quality insured exposures and an overall benign credit environment. Furthermore, CIFG has not incurred a loss since inception. As of Sept. 30, 2006, CIFG’s $64.5 billion net par insured portfolio consisted of 37.0% U.S. structured finance exposure, 27.6% international structured finance exposure, 27.7% U.S. municipal finance exposure and 7.7% international municipal finance exposure. U.S. Structured Finance Collateralized Debt Obligations Mortgage-Backed Securities Asset-Backed Securities Other Structured Finance Total International Finance CIFG’s insured portfolio maintained a weightedaverage rating of ‘AA–’ as of Sept. 30, 2006, with two exposures rated below investment grade (BIG). However, one of these transactions was called in the third quarter of 2006 and the other was called in the fourth quarter of 2006. As of Sept. 30, 2006, CIFG’s net par exposure to the two transactions totaled $63.2 million, or less than 0.1% of total net par outstanding. ‘AA–’ *Based on CIFG Guaranty’s lowest ratings. WA – Weighted average. Competition CIFG’s competition stems from its industry competitors and alternative structures to financial guaranty. Industry competition has intensified in recent years amongst the financial guarantors, with the tight interest rate spread environment and recent market entrants such as XL Capital Assurance and Assured Guaranty Corp. adding to the competitive pressures that have put downward pressure on premium rates and new business opportunities across sectors. In addition, reduced overall demand for financial guaranty insurance and investor acceptance of senior/subordinated structures in the mortgagebacked and asset-backed sectors have increased competitive pressures. Overall, CIFG’s insured portfolio lacks diversity in relation to its larger competitors, reflective of its development stage. It is largely concentrated in structured finance, with over 64% of its insured exposure in U.S. and international structured finance transactions. While this lack of diversity is somewhat characteristic of a developing company and is mitigated in part by the company’s available capital support and the high quality of its insured portfolio, Fitch believes that an ‘AAA’ financial guarantor should have a more balanced portfolio and expects CIFG to reduce its heavy concentration in structured finance over time. Specific portfolio concerns relate to the CIFG’s significant U.S. and international pooled CDO exposure (46% of total exposure) and certain mezzanine and/or layered loss exposures, though the company no longer underwrites new layered loss transactions. CIFG has been able to increase its market share, albeit still small relative to its peers, with increasing market acceptance of its name. While a pricing or trading disparity appears to still exist, there has been some evidence this margin has improved. However, there is concern that the fast-paced growth has come at the expense of price, particularly given the tight Structured Finance CIFG’s overall structured finance insured portfolio had a weighted-average rating of ‘AA+’ as of Sept. 30, 2006, primarily driven by significant CIFG Guaranty 4 Financial Guarantors increased slightly as a percent of the total portfolio at 46% of CIFG’s total insured portfolio. In Fitch’s opinion, a highly concentrated portfolio, in part composed of mezzanine exposures, is not consistent with the long-term business strategy of an ‘AAA’rated financial guarantor. As such, Fitch would view reduction of CIFG’s CDO exposure, as a percentage of total net par insured, favorably. insured CDO exposure. As of the same date, CIFG’s U.S. and international structured finance exposure was $41.7 billion, of which $29.7 billion, or 71.2%, represented CDO exposure. CIFG has insured both cash-funded CDOs and synthetic CDOs, with various types of collateral, including investment-grade corporate debt, leveraged loans and asset-backed and mortgage-backed securities (ABS/MBS). The weighted-average credit quality of CIFG’s CDO exposure, based on CIFG’s internal ratings, was ‘AA+’ as of Sept. 30, 2006, with the majority of the exposures rated ‘AAA’ and no exposures rated lower than ‘AA–’. In addition, the credit quality of CIFG’s CDO exposure is further strengthened by the underlying maturity profile, as a significant portion of the exposure has short weighted-average remaining lives. As of Sept. 30, 2006, CIFG also had $827.7 million of airline enhanced equipment trust certificate (EETC) exposure. However, CIFG’s entire EETC exposure was executed on a secondary, wrap-of-wrap basis, whereby CIFG would only be obligated to pay claims upon the default of both the EETC and a thirdparty ‘AAA’-rated primary financial guarantor, mitigating much of the credit risk typically associated with exposures of this nature. As of Sept. 30, 2006, CIFG had $7.7 billion of nonsenior layered pooled CDO, with almost all of the exposure supported by credits that were well above minimum ‘AAA’ or higher levels of credit enhancement, with the exception of just a couple of exposures in the ‘AA’ rating category. In addition, CIFG had one additional ABS mezzanine exposure of $28.5 million, but at the ‘AAA’ credit enhancement level. Mezzanine exposures account for 12.1% of CIFG’s total insured portfolio. These insured exposures, despite very low default probability, are subject to higher loss severities (i.e., lower recoveries) in the event of default because of the mezzanine nature of the exposures relative to seniormost tranches. In determining CIFG’s capital adequacy, Fitch includes the par exposure above CIFG’s layer in order to assess potential loss severity. As of Sept. 30, 2006, the par amount of exposure above CIFG’s mezzanine exposures was roughly $56.7 billion. While CIFG is not obligated to assume losses for par exposure above its insured tranche, in the highly remote instance that losses exceed CIFG’s attachment point, this would negatively affect the likelihood of recoveries for CIFG. International Finance CIFG’s total international finance business stood at $22.8 billion of net par outstanding at Sept. 30, 2006, or 35% of its total insured portfolio. As mentioned, the majority of CIFG’s international business relates to CDOs, although CIFG has expanded its international business across other sectors. CIFG has also insured consumer and commercial ABS and MBS, sovereign, utility, and project financings in the transportation revenue and health care sectors. It also had several private finance initiative, layered loss exposures that totaled $61.8 million. Its international project financings totaled approximately $1.8 billion of net par outstanding at Sept. 30, 2006, which are primarily in the transportation sector. The weightedaverage rating of these transactions is ‘A+’. CIFG’s international presence has been due in part to the reputation, presence and existing relationships of its current owner, Natixis, as well as its former owner, CNCE, within the European markets. Municipal Finance CIFG experienced significant growth in its municipal finance portfolio. As of Sept. 30, 2006, CIFG’s $17.9 billion of U.S. municipal insured exposure consisted of general obligations ($8.4 billion, or 13% of total net par insured), tax-backed bonds ($2.3 billion, or 3.6%) and transportation revenue bonds ($2.3 billion, or 3.6%), among others. The weighted-average credit quality of CIFG’s U.S. municipal finance exposure was ‘A–’ as of Sept. 30, 2006, with no below-investment-grade exposure. CIFG currently maintains sufficient capital support to offset the higher level of risk within these exposures; however, Fitch will continue to monitor CIFG’s future participation in the non-senior CDO sector to determine if sufficient capital and pricing remain available to support the associated risks. These risks are accounted for in Fitch’s Matrix model. In addition, as noted previously, CIFG continues to exhibit significant concentration on the pooled CDO sector across both senior-most and mezzanine exposures. As of Sept. 30, 2006, total CDO exposure CIFG Guaranty 5 Financial Guarantors CIFG Holding — Unaudited GAAP Operating Efficiency (Years Ended Dec. 31) Operating Expenses Net Premiums Written Expense Ratio (%) Loss and Loss-Adjustment Expenses (LAE) Net Premiums Earned Loss and LAE Ratio (%) 9/30/06 36,456 109,704 33.2 2005 33,210 108,512 30.6 2004 20,932 75,183 27.8 2003 18,892 83,355 22.7 2002 16,125 16,826 95.8 1,981 51,352 3.9 1,858 44,789 4.1 3,598 35,982 10.0 1,365 17,203 7.9 134 1,347 9.9 GAAP – Generally accepted accounting principles. Investment Portfolio As of Sept. 30, 2006, the U.S.-dollar-equivalent book and market values of CIFG Holding’s consolidated investment portfolio were $886.7 million and $867.1 million, respectively. The investment portfolio consisted of mostly high-rated short-term money-market mutual funds ($139.4 million book value, or 15.7% of the total portfolio, though about $10.4 million is not rated) and long-term taxable securities ($747.3 million, or 84.3%). CIFG does not provide financial guaranty insurance on any of the assets held within the investment portfolio. CIFG obtained its license to write direct financial guaranty insurance in California in late September 2006, which should have a positive impact on the company’s future ability to underwrite business in that state. The results through Sept. 30, 2006, do not include any direct financial guaranty insurance in California; however, the company has been able to insure a significant amount of California exposure by means of secondary market transactions and reinsurance agreements with other primary financial guarantors. As of Sept. 30, 2006, CIFG’s $897.8 million of insured exposure to California was CIFG’s sixth-largest state exposure. CIFG Holding’s year-to-date (YTD), as of Sept. 30, 2006, consolidated GAAP net investment income was $22.2 million. The company’s net realized capital gains from its unrated short-term investment portfolio were $0.2 million. In the past this number was significant because CIFG Holding held a much greater proportion of its investment portfolio in shortterm investments that under French regulation the company is required to reinvest at the end of each holding period. Combining the net investment income and net realized capital gains translates into an annualized investment yield of about 3.6% as of Sept. 30, 2006, which reflects a significant improvement over time. CIFG’s investment yield is notably below the industry average, but is attributable to the short tenor and high quality of the majority of CIFG Holding’s consolidated investment portfolio. Fitch expects CIFG Holding to lengthen the duration of its investment portfolio, consistent with the rest of the industry. CIFG does not yet exhibit the overall diversification by state that the larger, more established ‘AAA’-rated financial guaranty insurance companies do, as CIFG’s top 10 state exposures represented 73.3% of U.S. municipal finance par exposure as of Sept. 30, 2006. This lack of diversification by state has improved and is expected to continue to improve as the final state insurance licenses are obtained, and the U.S. municipal finance business platform is further expanded. The pricing disadvantage versus the larger, more established ‘AAA’-rated financial guaranty insurance companies has been diminishing and while it may restrain CIFG’s expansion in the municipal finance sector, with continued improvement in CIFG’s name recognition and franchise value, Fitch expects this differential should become less of a factor. Surveillance CIFG’s insured portfolio is monitored by its surveillance group, with specialists across various sectors. The group also has surveillance analysts in Europe that specifically monitor European transactions. The group is governed by a surveillance committee that meets regularly and reviews credits that require additional attention. Each credit is assigned an internal surveillance rating from one through six, with one indicating a credit is performing better than expected and a six indicating that a reserve has been established and a loss incurred. Financial Performance CIFG’s profitability has greatly improved, with YTD Sept. 30, 2006, net income of $22.0 million compared with $7.4 million for the same period in 2005. Return on equity (ROE) has also improved, to 4.9% at Sept. 30, 2006, though this remains well below the industry average. While improving, ROEs are likely to remain challenged by relatively lower CIFG Guaranty 6 Financial Guarantors CIFG Matrix Performance Statistics Summary premium rates CIFG generates on its insured portfolio, a reflection of its limited history in the financial guaranty sector. Additionally, CIFG maintains a significantly higher tax rate relative to its peers, with approximately 40% of pretax income on a U.S. GAAP basis going towards taxes. While CIFG NA continues to report a statutory loss of $700,000 YTD as of Sept. 30, 2006, CIFG Europe continues to operate profitability. Fitch assesses CIFG’s financial performance on a consolidated basis and therefore does not view CIFG NA’s statutory loss as being of significant concern. (000, As of Sept. 30, 2006) 9/30/06 Adjusted Claims-Paying Resources (ACPR) ‘AAA’ Threshold ‘AA’ Threshold ‘A’ Threshold 1,183,412 1,191,589 1,196,851 Required Claims-Paying Resources (RCPR) ‘AAA’ Threshold ‘AA’ Threshold ‘A’ Threshold 1,028,573 764,241 634,146 Core Capital Adequacy Ratio (ACPR/RCPR) (x) ‘AAA’ Threshold ‘AA’ Threshold ‘A’ Threshold Rating Threshold* Given that CIFG is a financial guaranty company still in its developmental stages, its limited profitability and significant expenses are to be expected. However, Fitch anticipates that as the insured portfolio grows, its profitability should also increase and expenses should stabilize. However, given the intense competition in the financial guaranty industry and the pressure for CIFG to grow its insured portfolio, particularly in public finance, the potential for compromise on pricing is a concern. Fitch will continue to monitor pricing and the underlying credit quality of new insured business. 1.15 1.56 1.89 ‘AAA’ *The Rating Threshold at which a financial guarantor's Core Capital Adequacy Ratio is expected to exceed 1.00x. those employed with respect to traditional financial guaranty insurance policies. Finally, Fitch is comfortable that CIFG is not exposed to material collateral posting requirements or ratings-based downgrade triggers that could potentially impact the company’s liquidity position further. Currently, Fitch does not anticipate any claims in the near future, nor are any expected that would directly impact the company’s IFS ratings. Furthermore, unlike the larger, more established financial guarantors, CIFG lacks the large municipal finance portfolio that provides steady earned premium recognition over long periods of time. CIFG’s concentration in structured finance, while providing installment premiums, is short in duration and requires more frequent new business to replace runoff in the portfolio Capitalization External Capital Support Since inception, CIFG has benefited from significant excess capital support in order to offset the limited profitability and lack of business diversification that are characteristic of a start-up financial guaranty insurance company. However, as CIFG’s business has grown, this excess is diminishing. Historically, CIFG received capital support, first from CDC IXIS and then from CNCE. Specifically, CIFG drew down the remaining $115.0 million of the CDC IXIS subordinated loan agreement in September 2004, and also entered into a $200.0 million senior loan agreement with CNCE in December 2004, of which $90.0 million was immediately drawn upon by CIFG Holding and contributed to CIFG. Another $8.5 million was drawn by CIFG Holding in 2005 for general corporate purposes. The remaining $101.5 under this irrevocable facility is available for CIFG to draw at any time. Under the terms and conditions of the senior loan agreement between CIFG Holding and CNCE, the loan agreement expires on Dec. 31, 2030, and the last date on which a draw may be made is Dec. 31, 2010. CIFG Holding may call the debt at any time after five years. As of Sept. 30, 2006, CIFG Holding’s debt-to-capital ratio Liquidity Fitch remains comfortable with CIFG’s overall liquidity management and the available resources to meet potential liquidity needs. These resources include ongoing earnings streams from insurance premiums and investment income, and a high-quality investment portfolio that could be liquidated or monetized through repurchase agreements if necessary. In addition, Fitch also remains comfortable that the potential for increased liquidity risk stemming from the assumption of credit risk by means of credit default swap agreements has been properly mitigated through the use of structuring techniques similar to CIFG Guaranty 7 Financial Guarantors stood at 14.1%, which is within Fitch’s guideline for the holding company of an ‘AAA’-rated financial guarantor. from its prior published CCAR of 1.28x at year-end 2005. The driver behind this change is the company’s rapid portfolio growth, which is significantly outstripping internal capital generation, as well as increased concentration in CDOs. Its excess capital was $154.8 million with adjusted claims-paying resources (ACPR) of $1.18 billion and required claims-paying resources (RCPR) of $1.03 billion. Included in CIFG’s ACPR is the benefit of the committed loan facility from its former parent, CNCE, of which $101.5 million remains available. It is important to note that the CNCE loan agreement remains with CNCE, which is no longer a direct parent of CIFG. Fitch has included the loan agreement as part of CIFG’s claims-paying resources and, without its inclusion, CIFG’s excess capital would be marginal. Fitch believes that this loan is still readily available to CIFG; in fact, CIFG plans to draw about $20 million, which is a clear demonstration that the facility remains available. However, if for some reason the facility is no longer available to CIFG, the company’s capital adequacy could be compromised and could lead to adverse rating action. In addition, the continued implied support from its current parent, Natixis, remains crucial for CIFG to maintain its ‘AAA’ IFS rating. Given the company’s rapid growth and capital consumption rate, which is exceeding its internal capital generation, its excess capital is being eroded quickly, even with access to the loan facility. Unless growth and/or capital usage slows over time (such as through decreased activity in capital-intensive transactions and greater diversification), Fitch would expect that the company will have to access additional capital or become more active in capital relief transactions, such as reinsurance in the short to intermediate term. CIFG’s leverage ratios of 99.7x qualified statutory capital (QSC) and 52.1x claims-paying resources (CPR) has increased considerably in the past two years. Furthermore, CIFG also has a significant amount of par exposure above its mezzanine exposure, about $48.1 billion, which increases its leverage even further, to 174.1x QSC and 91.0x CPR. As mentioned previously, CIFG is not obligated to assume losses for par exposure above its insured tranche; however, CIFG’s level of recoveries could be directly affected in the remote instance that losses are incurred. CIFG’s simulated losses continue to be driven almost entirely by its structured finance exposures (91% of net simulated losses). This is consistent with the composition of the company’s insured portfolio, with over 64% of its insured exposure in structured finance. Despite underwriting at very high attachment points well above minimum ‘AAA’ requirements, pooled CDO, much of which is non-senior and mezzanine-layered, continued to be the largest contributor to simulated losses (59% of losses), given the company’s high concentration (46% of total net exposure) to this subsector. Matrix Capital Model Results As of Sept. 30, 2006, CIFG met the minimum capital requirements under Matrix for its ‘AAA’ IFS rating, with a CCAR of 1.15x. This is down significantly CIFG Holding — Pro Forma Claims-Paying Resources ($000, Years Ended Dec. 31) Capital and Surplus Contingency Reserve Qualified Statutory Capital (QSC) Present Value Installment Premiums Unearned Premium Reserves Loss and Loss-Adjustment Expense Reserves Third-Party Capital Support Total Claims-Paying Resources (CPR) Net Par in Force Net Par/QSC (:1) Net Par/CPR (:1) 9/30/06 559,438 87,059 646,497 231,252 257,270 — 101,500 1,236,519 2005 550,212 49,618 599,830 185,978 190,664 — 101,500 1,077,972 2004 626,261 27,135 653,396 140,110 122,412 0 110,000 1,025,918 2003 515,256 9,562 524,818 74,632 80,017 0 0 679,467 2002 270,000 555 270,555 16,223 15,994 0 220,000 522,772 64,461,344 42,655,222 24,697,794 12,345,296 2,279,710 99.7 52.1 71.1 39.6 37.8 24.1 23.5 18.2 8.4 4.4 CIFG Guaranty 8 Financial Guarantors of $1.5 billion to Assured Guaranty Re Ltd. (IFS rated ‘AA’ by Fitch, $432.9 million of ceded par), Bluepoint Re Limited ($235.0 million of ceded par), Ram Reinsurance Company Ltd. ($395.1 million of ceded par), Financial Security Assurance, Inc. (IFS rated ‘AAA’ by Fitch, $352.8 million of ceded par), XL Financial Assurance Ltd. (IFS rated ‘AAA’ by Fitch, $109.6 million of ceded par) and Radian Asset Assurance Inc. (‘AA’ by Fitch, $15.0 million of ceded par). CIFG Sector Loss Distribution Other Sectors 12% MBS and Pooled Debt Home Obligations Equity 59% 11% CIFG also acts as a provider of reinsurance support to other third-party financial guaranty insurance companies. However, as CIFG has grown, it has markedly curtailed its reinsurance activity. Still, it continues to reinsure transactions, particularly related to transactions that CIFG may not have otherwise been able to participate in as a result of transaction size. It also gives CIFG the opportunity to add additional premium income and diversify its insured portfolio. Commercial Receiv ables ABS and Conduit 18% M B S – M o rtgage-backed securities. A B S – A sset-backed securities. Other significant contributors to simulated losses include the commercial ABS sector (18% of losses) and the residential mortgage-backed securities (RMBS)/second-lien sector (11% of losses). Simulated losses in commercial ABS were mostly from future flow transactions in the ‘BBB’ rating category, large single risks in the auto rental fleet securitization subsector in the ‘BBB’ rating category, as well as highly rated but large single-risk commercial MBS. MBS/second-lien simulated losses primarily came from large single risks in the ‘BBB’ rating category. In the first publication of Matrix results based on exposure as of year-end 2005, CIFG had a couple of below-investment-grade exposures that were signficant contributors to net simulated losses in the RMBS subsector; however, these exposures have since come off CIFG’s books. Positively, as of Sept. 30, 2006, CIFG had assumed $4.1 billion of exposure from third parties, representing 6.4% of CIFG’s total net par insured, which is down significantly from prior periods. Assumed business included commercial ABS, RMBS/second-lien securitizations, transportation, investor-owned utilities and utilities. Currently, CIFG is not actively pursuing inbound reinsurance and only does selective facultative transactions on an opportunistic basis. While Fitch takes comfort from the fact that all CIFG reinsurance has been done on a facultative basis, whereby each transaction is individually underwritten by CIFG prior to assumption, CIFG’s more recent activity in reinsurance has been in lower-rated structured finance transactions. Selective reinsurance provides some portfolio diversification and revenue enhancement opportunities; however, it also has the potential for adverse selection and weaker pricing fundamentals than primary business. Reinsurance CIFG utilizes reinsurance on a selective basis to manage concentration risk and capacity constraints. As of Sept. 30, 2006, CIFG had ceded total exposure CIFG Guaranty 9 Financial Guarantors Matrix Capital Adequacy Results (Continued) Matrix Capital Adequacy Results ($000, As of Sept. 30, 2006) Policyholder Surplus Losses and Loss Adjustment Expense Reserves Unearned Premiums Contingency Reserves Equity-Like Soft Capital (1) Discounted PV Installment Premiums Total Claims-Paying Resources Required Capital for Factor-Based Charges (2) ACPR CIFG* 559,438 — 257,270 87,059 101,500 215,644 1,220,911 37,500 1,183,412 Simulated Portfolio Losses Runoff Expenses Reinsurance and Soft Capital Credit RCPR 950,595 93,061 15,083 1,028,573 Core Capital Adequacy Ratio (CCAR) (3) NPO Operating Leverage ($000, As of Sept. 30, 2006) Reinsurance and Soft Capital Usage Reinsurance Ceded and Soft Capital Facilities (5) Qualified Claims on Reinsurance and Soft Capital Adjusted Qualified Claims on Reinsurance and Soft Capital (6) Qualified Claims/ Reinsurance and Soft Capital (%) (7) Adjusted Qualified Claims/ Qualified Claims (%) (8) Gross Simulated Losses Adjusted Qualified Claims/ Gross Simulated Losses (%) (9) 1.15 Insured Portfolio Summary 66,001,771 35 65 0 Total NPO Municipal NPO as % of Total Structured NPO as % of Total BIG as a % of NPO 64,461,343 35 65 0 Gross Simulated Losses ($) Municipal Losses (%) Structured Losses (%) Reinsurance and Soft Capital Credit Municipal (%) Structured (%) Net Simulated Losses Municipal Losses (%) Structured Losses (%) 950,595 9 91 15,083 2 98 935,512 9 91 Net Simulated BIG Exposure Losses (4) Net Simulated BIG Exposure Losses(%) Municipal Losses (%) Structured Losses (%) — N.A. N.A. N.A. Gross Simulated Losses/GPO (%) Net Simulated Losses/NPO (%) 1.44 1.45 15,083 1.0 93.4 950,595 1.6 *Rating Threshold ‘AAA’. PV – Present value. ACPR – Adjusted claims-paying resources. RCPR – Required claims-paying resources. NPO – Net par outstanding. GPO – Gross par outstanding. BIG – Below investment grade. N.A. – Not available. Note: Fitch rating or lower of other ratings agencies’ rating. See Notes for Matrix Capital Adequacy Results, page 11. 64,461,343 99.71 Total GPO Municipal GPO as % of Total Structured GPO as % of Total BIG as a % of GPO CIFG* 1,540,428 16,155 CIFG Guaranty 10 Financial Guarantors Notes for Matrix Capital Adequacy Results, Page 10 (1) Equity-Like Soft Capital — Equity-Like Soft Capital consists of soft capital facilities, such as contingent preferred stock put facilities that are given equity credit. Reinsurance-like soft capital, such as bank lines, is treated separately under Matrix. (2) Required Capital for Factor-Based Charges — The Required Capital for Factor-Based Charges is the total required capital for factor-based charges (reduction to available capital) based on the individual company’s investment portfolio, investment agreement and medium-term note (MTN) portfolio, other invested assets, and the present value of installment premiums based on its given rating threshold. The composition of each financial guarantor’s investment portfolio by asset class and rating is used to determine a portfolio level mean “credit spread return” and standard deviation of this return that is used to calculate a factor charge based on its rating threshold, which then reduces the guarantor’s available capital by that amount. If the company has an investment agreement and MTN portfolio (commonly including guaranteed investment contracts, or GICs), then it is determined whether the portfolio is duration matched, mismatched short (0.5–1.5 years) or mismatched long (greater than 1.5 years), with each classification carrying its own mean return and standard deviation used to determine a factor charge based on the company’s rating threshold. A fixed factor charge is applied to other invested assets regardless of rating threshold. The present value of installment premiums are further discounted by (1 – the percentage of structured finance defaults), which varies depending on which rating threshold is appropriate and thus reduces the guarantor’s claims-paying resources accordingly. (3) Core Capital Adequacy Ratio (CCAR) — The CCAR is the ACPR divided by the RCPR. It is the key ratio that measures a company’s capital adequacy under a given rating threshold and provides an indication of whether a company has excess capital. If a company’s CCAR exceeds 1.0x, it can meet simulated losses and business expenses based on its available capital resources. (4) Net Simulated BIG Losses — Net Simulated BIG Losses provides the overall percentage of simulated losses that are the result of below-investment-grade exposures net of reinsurance in a given insured portfolio. (5) Reinsurance Ceded and Soft Capital Facilities — Reinsurance Ceded and Soft Capital Facilities is the amount of total ceded (reinsured) par plus non-equity-like soft capital facilities, such as bank soft capital facilities with reinsurance-like features. (6) Adjusted Qualified Claims on Reinsurance and Soft Capital — Adjusted Qualified Claims on Reinsurance and Soft Capital reflects the amount of qualified claims (losses) assigned to third-party capital that is adjusted for simulated third-party capital provider defaults and claim disputes. (7) Qualified Claims/Reinsurance and Soft Capital — Qualified Claims/Reinsurance and Soft Capital provides a measure of the overall utilization of third-party capital against total qualified claims. (8) Adjusted Qualified Claims/Qualified Claims — Adjusted Qualified Claims/Qualified Claims provides an indication of the quality of third-party reinsurance and capital support. It demonstrates how much of the company’s reinsurance would be available after factoring in third-party capital provider defaults and disputes. (9) Adjusted Qualified Claims/Gross Simulated Losses — The Adjusted Qualified Claims/Gross Simulated Losses is the percentage of gross losses absorbed by a financial guarantor’s reinsurance and soft capital providers. It measures the efficiency of a company’s use of third-party reinsurance and capital. It reflects how much “reinsurance credit” a company receives under the Matrix model simulation. CIFG Guaranty 11 Financial Guarantors Key Financial Indicators — CIFG Holding and Subsidiaries ($ Mil., Years Ended Dec. 31) 9/30/06 2005 2004 2003 2002 (%) C,G 25,121 6,418 11,604 7,098 74.5 21,282 5,494 7,755 8,033 74.2 12,742 3,074 4,085 5,582 75.9 10,086 2,332 4,899 2,855 76.9 2,352 694 986 672 70.5 122.1 164.0 117.5 100.1 (5.2) C C C C C Adjusted Gross Premiums Written (1) Total Underwriting Expenses (2) 159.3 47.0 163.4 44.4 120.6 44.4 132.2 40.2 33.3 24.8 106.4 52.0 C C Gross Par Expense Ratio (%) (3) Policyholders' Surplus Contingency Reserve Qualified Statutory Capital (4) Unearned Premium Reserve Loss and LAE Reserves 0.2 559.4 87.1 646.5 257.3 0.0 0.2 550.2 49.6 599.8 190.7 0.0 0.3 626.3 27.1 653.4 122.4 0.0 0.4 515.3 9.6 524.8 80.0 0.0 1.1 270.0 0.6 270.6 16.0 0.0 — 21.4 285.0 26.1 109.8 0.0 — G G G G G 66,002 64,461 97,484 95,190 43,106 42,655 63,420 62,672 24,986 24,698 35,204 34,763 12,450 12,345 17,141 17,013 2,375 2,280 2,983 2,872 142.7 143.8 153.4 154.4 G G G G 99.7 147.2 71.1 104.5 37.8 53.2 23.5 32.4 8.4 10.6 93.3 101.6 G G 87.1 11.7 1.1 0.1 0.0 35.5 7.4 0.6 0.0 56.5 26.0 0.0 0.6 0.0 73.5 N.A. N.A. N.A. N.A. N.A. — — — — — — — — — — Financial Data (Pro Forma SAP) Gross Par Insured Domestic Municipal Domestic Nomunicipal International % Nonmunicipal and International Insured Portfolio Gross Par Outstanding (5) Net Par Outstanding Gross P&I Outstanding (5) Net P&I Outstanding Leverage Ratios Net Par/Qualified Statutory Capital (:1) Net P&I/Qualified Statutory Capital (:1) Investment Portfolio Credit Quality (%) ‘AAA’ ‘AA’ ‘A’ ‘BBB’ Not Investment Grade/Not Rated 86.3 12.4 1.2 0.1 0.0 See Notes and Definitions, page 14. CIFG Guaranty 12 Financial Guarantors Key Financial Indicators — CIFG Holding and Subsidiaries ($ Mil., Years Ended Dec. 31) 9/30/06 2005 2004 2003 2002 (%) C,G 52.3 0.0 22.2 4.0 78.5 44.5 0.0 20.5 (2.0) 63.0 36.0 0.0 12.5 0.9 49.3 17.1 0.0 3.9 8.4 29.4 1.3 0.0 9.3 0.0 10.6 62.6 0.0 754.5 (66.3) 68.6 C C C C C Operating Expense 2.0 36.5 1.9 33.2 3.6 27.8 1.7 18.9 0.1 16.5 (38.3) 76.2 C C Total Insurance Expense Interest Expense Other Expense Nonrecurring Items Total Expense 38.4 3.6 0.0 0.0 42.1 35.1 4.0 0.0 0.0 39.1 31.4 0.1 0.0 0.0 31.5 23.6 0.6 0.0 0.0 24.2 16.6 0.6 0.0 0.0 17.2 47.0 NM 0.0 0.0 60.8 C C C C C Income Before Taxes Net Income Adjusted Net Income (6) 36.5 22.0 21.4 23.9 11.0 11.1 17.8 11.6 11.6 5.2 1.8 1.8 (6.6) (8.0) (8.0) 78.6 89.5 84.9 C C C Total Investments and Cash Reinsurance Assets or Recoverables Derivative Assets Deferred Acquisition Costs Accrued Investment Income Other Assets Total Assets 882.5 4.1 0.6 60.3 13.7 32.0 993.2 786.4 3.0 0.0 48.8 13.4 25.8 877.4 777.3 2.0 0.0 45.9 1.9 22.6 849.7 617.0 0.3 0.0 29.9 0.7 15.9 663.9 296.9 0.4 0.0 8.4 0.4 8.1 314.2 33.7 89.7 NM 69.2 151.6 44.2 35.9 G G G G G G G Unearned Premiums Loss and Loss Adjustment Expense Reserves Guaranteed Investment Contract Obligations Long-Term Debt Derivative Liabilities Accrued Interest Payable Other Liabilities Total Liabilities 240.1 6.4 0.0 98.5 0.0 0.0 50.1 395.0 180.6 3.9 0.0 98.5 0.3 0.0 38.1 321.4 113.8 5.7 0.0 90.0 0.1 0.0 27.7 237.3 76.9 1.9 0.0 0.0 0.1 0.0 19.9 98.8 15.9 0.1 0.0 0.0 0.0 0.0 16.7 32.8 106.2 178.4 0.0 N.M. (100.0) 0.0 34.0 94.2 G G G G G G G G 0.0 598.1 993.2 0.0 556.0 877.4 0.0 612.4 849.7 0.0 565.0 663.9 0.0 281.4 314.2 0.0 22.3 35.9 G G G N.A. N.A. N.A. N.A. 63.5 (88.2) 26.7 2.0 24.2 (110.4) 93.9 7.7 32.7 (255.4) 223.5 0.7 (4.8) 6.6 0.0 1.8 (100.0) N.M. (100.0) N.M. C C C C 65.4 28.3 0.2 1.2 0.0 4.8 71.1 32.5 4.7 (0.4) 0.0 (3.3) 72.9 25.3 17.1 0.0 0.0 1.8 58.5 13.3 28.1 (0.3) 0.0 0.4 12.7 87.3 69.2 (0.0) 0.0 0.0 — — — — — — — — — — — — 3.9 71.0 74.9 5.1 14.1 4.1 74.1 78.3 1.9 15.0 10.0 77.4 87.4 2.0 12.8 10.0 127.2 137.2 0.4 0.0 9.9 1,221.8 1,231.8 N.A. 0.0 — — — — — — — — — — 0.6 0.8 0.5 0.6 0.8 1.1 0.5 0.8 0.9 1.0 0.5 1.2 1.3 1.8 0.8 1.7 1.4 1.7 1.5 0.9 — — — — — — — — Summary Income Statement (GAAP) Insurance Revenues Financial Services Revenue Net Investment Income Other Revenues Total Revenues Loss and LAE Summary Balance Sheet (GAAP) Shareholders’ Equity Preferred Stock Total Shareholders' Equity Total Liabilities and Shareholders' Equity Cash Flow Information (GAAP)* Cash Flow from Operations Cash Flow from Investing Cash Flow from Financing Net Change in Cash % of Total Revenue Net Premiums Earned Net Investment Income Net Realized Gains (Losses) on Investments Net Realized and Unrealized Gains (Losses) on Derivatives Financial Services Other Revenues Ratios (GAAP) (%) GAAP Loss and LAE Ratio (7) GAAP Expense Ratio (8) GAAP Combined Ratio (9) Return on Equity (10) Financial Leverage (11) Adjusted Gross Premiums (AGP)/Gross Par Insured (GPI) Domestic Municipal AGP/Domestic Municipal GPI Domestic Nonmunicipal AGP/Domestic Nonmunicipal GPI International AGP/International GPI *For CIFG Holding and Subsidiaries. See Notes and Definitions, page 14. CIFG Guaranty 13 Financial Guarantors Notes and Definitions for Key Financial Indicators, Pages 12–13 (1) Upfront premiums plus the estimated present value of future installment premiums for policies issued during the period. (2) Before ceding commission income. (3) Total underwriting expenses divided by gross par insured. (4) Policyholders’ surplus plus contingency reserve. (5) Before reinsurance. (6) GAAP net income excluding change in fair value of derivatives, assuming a 35% tax rate. (7) GAAP loss and LAE divided by GAAP net premiums earned. (8) GAAP operating and underwriting expenses divided by GAAP net premiums earned. (9) GAAP Loss and LAE ratio plus GAAP expense ratio. (10) GAAP net income divided by average stockholders’ equity. (11) Debt outstanding divided by total capitalization. C – Percentage change between period shown. G – Compound annual growth rate over the period shown. SAP – Statutory accounting practices. LAE – Loss-adjustment expenses. P&I – Principal and interest. GAAP – Generally accepted accounting principles. N.R. – Not reported. N.M. – Not meaningful. N.A. – Not available. Note: Net par outstanding and net principal and interest are net of intercompany cessions. Numbers may not add due to rounding. Copyright © 2007 by Fitch, Inc., Fitch Ratings Ltd. and its subsidiaries. One State Street Plaza, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. All of the information contained herein is based on information obtained from issuers, other obligors, underwriters, and other sources which Fitch believes to be reliable. Fitch does not audit or verify the truth or accuracy of any such information. As a result, the information in this report is provided “as is” without any representation or warranty of any kind. A Fitch rating is an opinion as to the creditworthiness of a security. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed, suspended, or withdrawn at anytime for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the taxexempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from USD1,000 to USD750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from USD10,000 to USD1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of Great Britain, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. CIFG Guaranty 14