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Bond Insurers Evaluate Business Prospects Amid Investor Uncertainty As RMBS Shakeout Continues
Standard & Poors, Sep 2008
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 bond insurance industry's exposure to 2005-2007 vintage direct and indirect residential mortgage-backed securities (RMBS) transactions will continue to weigh on bond insurers for many years, and its ramifications will be far-reaching, affecting both the role of existing and new participants and the mix and magnitude of business that they will underwrite. This is the assessment of Standard & Poor's Ratings Services, which has been tracking closely the progression of this credit event and running a series of evolving stress test scenarios since March 2007. For most insurers, we have witnessed a significant decline in business opportunity as investor appetite has dwindled as a result of these companies' financial difficulties. The presence of meaningful nonprime mortgage exposure has led to...
Companies mentioned in this report are: Ambac Assurance Corp.,Financial Guaranty Insurance Co.,Assured Guaranty Municipal Corp.,MBIA Insurance Corp.,Assured Guaranty Corp,Radian Asset Assurance Inc.,RAM Reinsurance Co Ltd.,ACA Financial Guaranty Corp.,Assured Guaranty Re Ltd.,Syncora Guarantee Inc.,Syncora Guarantee Re Ltd.,CIFG Assurance North America, Inc,Channel Reinsurance Ltd,BluePoint Re Limited,Berkshire Hathaway Assurance Corp.
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