DAR New business activity has grown significantly in our core markets across the US, UK and Europe, and we are now seeking to expand the business geographically across Australia and Asia. We have maintained a significant interest in Australia, and we want to replicate the success we have had in the UK and Europe.

In terms of our scope and reach, there are three core parts to our business. The first is infrastructure and utilities finance, where we support issuers such as ports, airports and universities as well as project financing in the public-private placement (PPP) and renewables sector. The second is structured finance, where we work with banks and other financial institutions to provide portfolio management guarantees and potential capital support. Finally, there is public finance, where we work with a range of local government and state-owned entities to help raise capital.

We see lots of crossover between the Australian market and what we do in the rest of the world, and we are strengthening our presence here with Melissa Gribble joining the team and being based in Sydney.
We are the only monoline business to have continued to write new business during and after the global financial crisis and have maintained our AA rating from S&P Global Ratings for 10 years. We have a really strong foundation and are ready to increase our business activity in Australia.

GRIBBLE We are aiming to increase our presence in the traditional credit-wrapping space, for utilities and infrastructure bonds. However, while this is very important for us and is the type of business we are arguably best known for, we have a much broader capability that is not as prominent – things like tools for more efficient portfolio management by banks and insurance companies. There is also a role for us to play in financing key infrastructure and projects associated with energy transition.

I also think it’s important to clarify what we do. We are a financial guarantee insurance company, guaranteeing timely payment of scheduled principal and interest on senior debt. This can be in bond or loan format, listed or unlisted.

GRIBBLE In my meetings there has been a lot of interest in what we can offer. Market participants have been curious about our broader applicability and being more than ‘just a bond wrapper’ and seem excited to engage. We can be a risk partner for a range of users.

DAR Likewise, I have spoken to international institutional investors who have told me they would like to invest in Australia but may have credit requirements or gaps on the coverage and origination side that make it hard for them to do so. If Assured Guaranty was involved, they say there would be more of a pathway for them to participate in financings.

GRIBBLE It is true that we provide bridges between different capital pools, but I would not say there is no natural alignment – there very much is. Rather, our role is to make it a more accessible playing field for different providers of funds with different credit appetites and return objectives, and to allow the fullest possible participation from across the widest range of market participants.

This includes geographic breadth. What we can do applies to Australian investors but can also help provide access to capital pools in Asia, the UK, Europe and beyond. This is another benefit of being a global company.

DAR I was at a conference recently where Australia came up in every conversation I had with investors. It is clear that UK and US investors in particular feel there are some gaps to be crossed if they are to make investments, and we can help them get comfortable, in areas such as renewables – by providing our guarantees to help mitigate risk. These investors say they would be able to provide capital in a way that is much better value for money than if the wrap was not there.

We don’t provide advice to investors but we can certainly help them on their journey – and we have the network to bring in more diverse pools of capital. As well as the UK and US, this includes pension funds and life insurance companies in Asia. Often, these accounts say they do not have the resources to get in front of issuers or position themselves to be shown new deals.

We can also serve an important role in tenor extension. Traditionally, issuers in Australia cannot obtain debt longer than 15 years – whereas, in the UK and Europe, we are very comfortable underwriting 20-30 year debt. We could do the same in Australia, to help borrowers match their requirements and asset tenors.

DAR Absolutely. A good example of our role in this context has been in sectors that have faced recent ratings pressure, such as global airports and UK social housing. With our involvement in these sectors, issuers benefited from improved pricing and participation from investors. Amid the downward pressure on ratings, a credit wrap meant investors could continue to hold assets in their portfolios.

GRIBBLE The main thing market participants want is certainty. Providing a double-A rating and an unconditional and irrevocable guarantee of timely interest and principal payments gives everyone a lot more of it.

The renewables transition space is right in focus in this context. It is an area in which a lot of investors want to participate, but it is much easier to do so when there is more certainty and the most level playing field possible.

DAR Absolutely. A good example of our role in this context has been in sectors that have faced recent ratings pressure, such as global airports and UK social housing. With our involvement in these sectors, issuers benefited from improved pricing and participation from investors. Amid the downward pressure on ratings, a credit wrap meant investors could continue to hold assets in their portfolios.

GRIBBLE The main thing market participants want is certainty. Providing a double-A rating and an unconditional and irrevocable guarantee of timely interest and principal payments gives everyone a lot more of it.

The renewables transition space is right in focus in this context. It is an area in which a lot of investors want to participate, but it is much easier to do so when there is more certainty and the most level playing field possible.

GRIBBLE New Zealand is an important market and one we believe has a lot of the same potential and similar opportunities as other global markets. If there is an infrastructure need – as is clearly the case in New Zealand – we can potentially help link financing needs to capital.