MBIA Inc. and CapMAC Holdings, two major U.S. financial guarantors set to merge in March, will set up an office in Tokyo this summer to enhance their business in the Japanese market, the firms’ CEOs announced Monday.Financial guarantors assure investors of the principal and interest of municipal or corporate bonds. The assurance by highly rated guarantors automatically give the bonds high ratings, which in turn can reduce costs for issuers and enable safe investment.The Japanese market for this kind of business has not been as developed as in the U.S., but the merging firms see a lot of potential here as the financial deregulations unfold and credit-ratings become increasingly important to investors, David Elliot, chairman and CEO of MBIA Inc., told reporters in Tokyo.MBIA Inc., the leading firm in the U.S. financial guaranty industry, will succeed CapMAC Holdings, which has cooperated with Mitsui Marine & Fire Insurance Co. since 1995, as an operating unit here. Two other Japanese nonlife insurers — Tokio Marine & Fire Insurance Co. and Sumitomo Marine & Fire Insurance Co. — have also had business partnerships with other American financial guarantors.

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