Moody's Eyes 'Noncore' Biz of Bond Insurers

Moody's Investors Service is introducing a new framework for analyzing the "noncore activities" of highly rated financial guarantors.The rating agency said that, at current levels, the diversification activities of the guarantors "do not generate undue risk or present a threat to their ratings." However, Moody's also said that noncore operations have become a notable part of the business of financial guarantors, and therefore warrant more scrutiny of the financial, operational, and reputation risk these activities pose to the parent companies. "Any significant change to the guarantors' inherently narrow business model of assuming high-quality credit risk would likely alter our view of the key rating drivers," said Moody's managing director Jack Dorer. The rating agency can be found on the Web at http://www.moodys.com.