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Bond Insurer Consolidation Is Unlikely Despite Today's Competitive Market
Standard & Poors, Jan 2007
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
Abstract
The financial guarantee business can best be characterized as intensely competitive--not only among the financial guarantors but also from alternative forms of credit enhancement--based on Standard & Poor's Ratings Services' midyear 2006 profitability studies and comments received from senior industry management. In light of this current environment, we're often asked about the likelihood of consolidation among bond insurers. We do not see a case for consolidation in the near term. Standard & Poor's now rates seven primary financial guarantee companies 'AAA', compared with a peak of eight in 1988. This current group of seven is composed of four large and established companies-- MBIA Insurance Corp. (MBIA), Ambac Assurance Corp. (Ambac), Financial Guaranty Insurance Co., and Financial Security Assurance Inc. (FSA)--as...
Companies mentioned in this report are: Ambac Assurance Corp.,Financial Guaranty Insurance Co.,Assured Guaranty Municipal Corp.,MBIA Insurance Corp.,Assured Guaranty Corp,Syncora Guarantee Inc.,CIFG GUARANTY
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