Commercial Guaranty Assurance, Ltd. (CGA). CGA is a financial guarantor and a wholly-owned subsidiary of the CGA Group, Ltd. CGA provides credit enhancement to a wide array of securities, with a particular focus on asset-backed and real estate-related securities. The reaffirmation is based primarily on CGA's demonstration of prudent underwriting, assiduous risk management, and keen strategic initiative since it commenced in June 1997. As such, the company continues to be extremely well-capitalised relative to its projected insured portfolio, which is currently well diversified by several measures.

Based on pro forma results for December 31, 1998, CGA has total claims paying resources of $171.9 million (results may be preliminary based on adjustments to loss reserves), including $91.9 million of paid-in capital, a $60 million capital commitment from its original investor base, and a $20 million excess of loss agreement with KRE Reinsurance Ltd. Additionally, members of the original unit investor base have recently agreed to invest $50 million of capital in CGA Group. Through access to the additional capital of CGA Group and to capital set aside for reinsurance, CGA will raise an additional $50 million, bringing its total claims-paying resources to $221.9 million. DCR believes these claims paying resources are sufficient to support the expected growth in CGA`s insured portfolio at the Triple-A level. Based on its business plan for the next five years, CGA is expected during that time to operate at a maximum leverage (par and interest insured divided by claims paying resources) of 40:1.

CGA has built a high-quality book of business given its principal sectors of focus, and the portfolio is in line with the company's original underwriting plans. As of December 31, 1998, the insured portfolio totaled approximately $2.4 billion of net par and interest, which includes $1.6 billion of net par.