Financial Guarantees in Force (Notes)

12 Months Ended

Dec. 31, 2019

6. FINANCIAL GUARANTEES IN FORCE

Financial guarantees outstanding includes the exposures of policies that insure variable interest entities (“VIEs”) consolidated in accordance with ASC Topic 810, Consolidation. Financial guarantees outstanding includes the exposure of policies that insure capital appreciation bonds which are reported at the par amount at the time of issuance of the insurance policy as opposed to the current accreted value of the bonds. Financial guarantees outstanding exclude the exposures of policies that insure bonds which have been called, pre-refunded or refunded and excludes exposure of the policy that insures the notes issued by Ambac LSNI as defined in Note 1. Background and Business Description. The gross par amount of financial guarantees outstanding was $43,908 and $52,055 at December 31, 2019 and 2018, respectively. The par amount of financial guarantees outstanding, net of reinsurance, was $38,018 and $46,927 at December 31, 2019 and 2018, respectively.

As of December 31, 2019 and 2018, the guarantee portfolio was diversified by type of guaranteed bond as shown in the following table:



Net Par Outstanding December 31,	2019		2018
Public Finance:
Housing revenue⁽¹⁾	$	5,991	$	6,159
Lease and tax-backed revenue	5,102		7,565
General obligation	3,011		4,214
Higher education	885		1,168
Transportation revenue	855		1,754
Utility revenue	768		1,178
Other	1,041		1,404
Total Public Finance	17,653		23,442
Structured Finance:
Mortgage-backed and home equity	4,423		5,510
Investor-owned utilities	1,675		1,754
Student loan	769		934
Structured Insurance	395		1,365
Asset-backed and other	246		384
Total Structured Finance	7,508		9,947
International Finance:
Sovereign/sub-sovereign	5,264		5,250
Investor-owned and public utilities	4,436		4,499
Asset-backed and other	1,625		2,176
Transportation	1,532		1,613
Total International Finance	12,857		13,538
Total	$	38,018	$	46,927


(1)	Includes $5,654 and $5,759 of Military Housing net par at December 31, 2019 and 2018, respectively.

As of December 31, 2019 and 2018, the International Finance guaranteed portfolio by location of risk was as outlined in the table below:



Net Par Outstanding December 31,	2019		2018
United Kingdom	$	10,593	$	10,965
Italy	767		811
Austria	674		712
Australia	382		384
France	303		312
Other international ⁽¹⁾	138		354
Total International Finance	$	12,857	$	13,538


(1)	Other international may include components of U.S. exposure.

Gross financial guarantees in force (principal and interest) were $69,826 and $87,543 at December 31, 2019 and 2018, respectively. Net financial guarantees in force (after giving effect to reinsurance) were $58,245 and $77,972 as of December 31, 2019 and 2018, respectively.

In the United States, California, Colorado and New York were the states with the highest aggregate net par amounts in force, accounting for 6.7%, 6.3% and 6.1% of the total at December 31, 2019, respectively. No other state accounted for more than 5.0%. The highest single insured risk represented 2.7% of the aggregate net par amount guaranteed.