Services

mGIC serves clients in three primary ways:

1.Analysis and Advisory
We assist clients in implementing policies, evaluating hedging applications, and in the appropriate use of products.

2.Execution
We guide the process of structuring and negotiating the details of the agreement with an eye to putting the most advantageous form in place for the client.

3.Monitoring and Management
Through our subsidiary SMV (Swap Monitoring and Valuation), we provide continuing service to the client after the execution hedging transac
tions by monitoring mark-to-market valuations and the effectiveness of clients’ portfolios

Analysis and Advisory

Although conducting competitive bids may be the most visible function we perform, much of our critical work for clients takes place before and after a transaction's execution.

We begin every reinvestment or swap assignment with an examination of the Issuer’s bond documents and statutory authorizations regarding permitted investments and/or swaps. Within this legal framework and the Issuer’s investment and/or hedging objectives we consider appropriate products and structures. We will also work with an issuer to develop and implement a Derivatives Use Policy if they do not already have one.

We then work closely with the client to analyze the economic benefits and risks of the different products and structures warranted by the client’s current situation. These analyses will frequently include a product’s hypothetical cash-flow performance under:

  • Historical Back-Testing

  • Hypothetical Rate Scenarios

  • Basis Swaps

  • Extreme-Case” Outcomes and Probabilities


We have experience with the entire spectrum of derivative and investment agreements and our commitment is in educating our clients. Only when all stakeholders to the transaction are fully satisfied and comfortable that a product application is appropriate do we proceed to the structuring and documentation phase of a transaction.

Execution

When a given product application and structure has been decided upon, mGIC begins the documentation and approval process to ensure that the resulting structure meets all of our client’s requirements. We will:

  • Confer with the Issuer’s Counsel to ensure that the investment/hedge meets all legal, credit and tax requirements,

  • Design Materials necessary to educate and implement an adoption of the product or strategy by necessary boards or committees,

  • Create Bid Specifications and Documentation, contact potential bidders and conduct the competitive bid, ultimately overseeing final docu mentation and closing.


We are in constant contact with a wide range of financial providers that make markets in reinvestment and hedging instruments. Our experience and active involvement in the market enables us to identify and deliver to the client the most competitive rates and structures available. By conducting competitive bids among all eligible investment providers for each transaction we ensure that the Issuer receives the best terms available in the marketplace.

Once the bid has taken place we coordinate the final phases of the documentation process of the transaction to bring it to a successful close.

Monitoring and Management

SMV (Swap Monitoring and Valuation) is a valuation and reporting service for clients’ derivative transactions. SMV provides clients with independent “mid-market” valuations of their swaps, tracks their periodic payments and monitors the swap Provider’s credit rating and collateral requirements.

SMV was created by mGIC in response to the increasing need for information by derivative users and the new financial reporting standards from GASB to provide a reliable and independent derivative monitoring service.

SMV provides current and historical valuations of derivatives. SMV generates GASB required reports and monitors swap trade parameters on an on-going basis for valuation thresholds and potential market opportunities. SMV offers accuracy checks of provider generated payments and termination values and can generate historical transaction cash flows. SMV can also calculate future hypothetical values based on “what-if” rate scenarios and potential market movements.