Carl Dincesen

Benchmark Bond Ratings, Inc. The firm opened for business February 15, 2011. Benchmark provides private municipal bond credit rating reports on a fee paid basis to bond investors on a by request basis. Carl feels investors in municipal bonds have not been served as well as they could be. The company is premised on the simple fact that performance (an individual issue or portfolio) can sustain short and long-term damage without money default. The issuer pay model has well recognized limitations, but no alternative other than in-house research or limiting choices to a narrow sub-set of issues. Our conclusion: the public rating agencies are necessary but not always sufficient. Credit agency ratings come “free” to the investor, which is why we call them public ratings. We are a new a tool to improve municipal bond investment performance. We see private ratings as a supplement to in house resources and a necessity for municipal investors who rely solely on public ratings. When that is the case, many investors severely limit their choices to “very high credit quality.” Even there, widespread assumptions may but less than billed. Not enough attention is given to what hard pledges and rights are afforded. Our rating reports are designed primarily for professional investors, credit risk managers, and analysts. However, our rating scale is understood and preferred by non-professionals as well. Our opinions are to the point with detail to support our findings (opinions).We include every fact and interpretation that is the basis for our rating opinion which means that the reader might come to a differ opinion. Our state of the art Protection Margin Rating Scale communicates our opinion as to credit risk (probability of default) in the next five years. We build in a margin for stress that may or may not materialize but tends to occur in varying degrees every ten years. Armed with that information, it is up to the investor to use our ratings offensively and defensively to improve performance when the risk premium is over or under valued or has not been determined to your satisfaction. We believe today’s financial stress has caused risk to increase faster than indicated by long-term trends in place and that the increase will not be a temporary phenomenon. With that said, the municipal market is still fundamentally a low risk market. But, that it also means investors can gain a performance edge and fair value at minimum, with the addition of independent ratings from Benchmark when and as needed. Carl was the managing director for public finance credit risk management and chairperson of the senior public finance credit committee at Ambac where he worked for eighteen years. Prior to that, he was manager of municipal research at United States Trust Company of New York, where he worked for nine years, seven in the personal trust and investment division.