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Bond Insurers' Credit Default Swap Business Continues To Evolve Dec 06
Standard & Poors, Dec 2006
Abstract
In their ongoing efforts to expand the use of their financial guarantee product, the bond insurers increased their participation in the credit default swap (CDS) market beginning in the late 1990s. Much has changed since then in terms of the types of transactions that are insured, the payment terms of contracts, and an improvement in the overall credit quality of this business. The insurers are continuing to underwrite this business in a manner consistent with what Standard & Poor's Ratings Services analysts have discussed in earlier reports. In 2005, gross par written under CDS contracts represented 23% of total gross par written for all primary bond insurers. Based on the amount of CDS par written for the first six months...
Companies mentioned in this report are: Delta Air Lines Inc.,Radian Asset Assurance Inc.,Northwest Airlines Corp.,ACA Financial Guaranty Corp.
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.
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