CCLIA, or "Connie Lee," was a govt backed enterprise (GSE) established by the Higher Education Regulations of 1986 in order to ensure college construction loans. When the College Construction Loan Insurance Association was alluded to as Connie Lee, it mimicked other govt backed enterprises (GSEs), like Sallie Mae, Fannie Mae, & Freddie Mac, which were all once known as the Student Loan Marketing Association.

When Connie Lee was formed in 1987, the Education Department gave seed money to get the company off the ground, but the company has since run into issues with conflicting state and federal rules regarding bond insurance. The Higher Education Regulations of 1986 established the government-sponsored business (GSE) known as CCLIA, also known as Connie Lee. Bond insurance businesses like Connie Lee were bound by state requirements to have a certain proportion of their business in investment-grade debt categories: bonds rated BBB and above, which was frequently as high as 95%.

Important Points

• Connie Lee, a govt backed firm, was known as the CCLIA.
• Connie Lee's mission was to offer insurance for university, college, & teaching hospital development projects.
• As a result of Connie Lee's support, educational institutions were able to issue bonds to raise money for new or refurbished facilities.
• However, Connie Lee was constantly stuck between contradictory federal & state requirements on bond insurance when it was founded in 1987, thanks to funding from the U.S. Department of Education (ED).
• When Ambac Investment Company paid $105 million for the remaining shares of Connie Lee, the company was privatized.

What was CCLIA?

The Higher Ed Regulations of 1986 established the govt backed business (GSE) known as the (CCLIA), also known as Connie Lee. Colleges, universities, medical hospitals, as well as other academic institutions, needed insurance to cover building projects. That's what Connie Lee was created to do. In 1997, the company was sold to a private equity firm for $1 billion. Connie Lee guaranteed 95 bonds totalling $2.6 billion between October 1991 and September 1996, when the first bond was protected. For historically black schools and institutions, a large number of people applied. Despite its brief existence, it was financially stable.

CCLIA's Methods

Connie Lee offered support for debt instruments issued by academic institutions to help finance new or refurbished buildings & facilities. Bond insurance holding firm, allowed by federal legislation, mostly covered municipal securities produced by schools with poor credit ratings—Standard & Poor's scores of BBB and below—which were insured by the business.

When Connie Lee was formed in 1987, the Education Department gave it with stock money. However, from the outset, the company was unable to meet both of its goals. For the most part, federal law confined that to insuring bonds with a BBB or lower credit score. State legislation, on the other hand, required bond insurers such as Connie Lee to focus on investment-grade loans, which are defined as bonds with a BBB or higher rating.

Because of the reliance on endowments, alumni grants, and other federal sources, many colleges and universities were able to fund construction projects without the need for bonds or bond insurance. So even though Connie Lee was permitted to do business in all 50 states (plus the District of Columbia & Puerto Rico), she was able to service just a small number of schools. To be able to guarantee higher-grade debt was made possible by the Higher Ed modification in 1992.

Connie Lee's Private Ownership (CCLIA)

It was announced that the Privatization Act of 1995, enacted by Congress, would discontinue the government backing of Connie Lee by June 1996. Connie Lee's outstanding shares were purchased by bond insurance Ambac Investment Firm for $105 million in November 1997. According to press sources at the time, Sallie Mae had 42 per cent of Connie Lee's shares, and the Pennsylvania School Employees Retirement Board had roughly 23 per cent. In addition, Ambac repaid Connie Lee $18.5 million in debt it accrued when it acquired back the 14% ownership the US U.s. Treasury had in the company. Ambac is now debt-free.

Connie Lee had been waiting for a buyer & fresh leadership for some time before making the purchase. Oliver Sockwell, the company's first president and Chairman, stepped down earlier this year. Connie Lee Insurance Group is the new name given to Ambac's new subsidiary. Nevertheless, it remained idle for many years, issuing no new insurance policies. With an investment of $860 million, Ambac won regulatory clearance in 2008 to recapitalize and revive Connie Lee with a new emphasis on college & hospital construction projects. A large portion of the public loan that was funded has already been paid back. So the insurance business will let the current bonds expire, but no new issuance will be issued.

Organizations That Are Funded By the Government, Such As Connie Lee

When the CCLIA was referred to as Connie Lee, it mimicked other govt backed enterprises (GSEs), like Sallie Mae, Fannie Mae, and Freddie Mac, which were all once known as the Student Debt Marketing Association. For such economic service organizations created by Congress, acronyms have been personified into unique, approachable names.