Fitch Eyes Monoline-Wrapped RMBS Classes

Citing recent rating actions on four financial guaranty insurance companies and their subsidiaries, Fitch Ratings has placed over 200 residential mortgage-backed securities insured by the companies on Rating Watch Negative.Fitch placed the AAA Insurer Financial Strength ratings of Security Capital Assurance Ltd., MBIA Inc., FGIC Corp., Ambac Assurance Corp., and their subsidiaries on Rating Watch Negative following updated assessments of the monoline insurance companies' exposure to RMBS, structured finance collateralized debt obligations backed by subprime mortgage collateral, and CDO-squared transactions. The affected RMBS classes include 19 insured by SCA, 87 insured by MBIA, 36 insured by FGIC, and 64 insured by Ambac. Fitch said the securities will remain on Rating Watch Negative while it conducts a review to determine which classes will be able to maintain their AAA ratings based on subordination, overcollateralization, or additional forms of credit enhancement that are not dependent on the guaranties. The rating agency can be found online at http://www.fitchratings.com.