Bad News Continues for Triad

The bad news for Triad Guaranty Inc., Winston-Salem, N.C., continues, as Standard & Poor's announced that it will drop the company from its SmallCap 600 Index after the markets close on April 7. As of the close of trading on April 3, when S&P made the announcement, Triad's market capitalization was approximately $39 million, ranking 600th in the index. In early trading on April 4, Triad's common stock price fell even further, crashing through what had been the 52-week low for the stock. At midday on April 4, Triad was trading at $2.05 per share. Triad's place in the index is being taken by Zoll Medical, a heath care equipment company. Separately, S&P's rating unit cut Triad's financial strength ratings from AA-minus to BBB, echoing moves by Fitch Ratings and Moody's Investors Service. Meanwhile, in a Securities and Exchange Commission filing, Triad said it has repaid the $80 million borrowed on an unsecured credit facility and has terminated its agreement with the lenders. It said it took the step to avoid violating any of the agreement's covenants, such as restrictions on Triad's ability to incur liens, merge or consolidate with another entity, or dispose of all or substantially all its assets.