S&P: Mortgage Woes Hurting Bond Insurers
Standard & Poor's Rating Services has lowered its financial strength ratings on Ambac Assurance Corp. and MBIA Insurance Corp. to AA from AAA, and placed them on CreditWatch with negative implications. S&P also lowered the ratings on the holding companies, Ambac Financial Group and MBIA Inc. to A from AA and to A- from AA-, respectively, and placed those ratings on CreditWatch negative.
Among the reasons given for the moves was "continuing deterioration in key areas of the U.S. residential mortgage sector."
Earlier, Moody's Investors Service has cited mortgage-related exposures in placing ratings of bond insurers MBIA and Ambac on watch, drawing protests from both companies. "While the U.S. housing market and our housing-related insured credits have weakened, their performance has been consistent with expectations underlying our loss reserve calculations," said Jay Brown, MBIA chairman and CEO.
"Outside the mortgage-related exposures, the remainder of our portfolio is performing well," said Michael Callen, chairman and CEO of Ambac. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/