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Abstract: 

Strong total new issue volume and increased insurance penetration, combined with continued underwriting and pricing discipline, enabled the AAA-rated primary bond insurers to post excellent business and economic results in their U.S. public finance business line during the first half of 2003. Standard & Poor’s believes the bond insurers continue to benefit from 2002’s difficult credit environment, which produced strong demand for their financial guarantee product and a favorable pricing environment. In general, premium rates have risen, continuing an upward pricing trend that has been in place for the past five years, while capital charges increased slightly. Indications for the remainder of 2003 are that premium pricing remains very strong in the public finance sector and underwriting credit quality is sound.

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Affiliations:  1: Standard & Poor’s Rating Services.