S&P Downgrades FGIC, Eyes MBIA, XL Cap

Standard & Poor's Ratings Services has lowered its financial strength and issuer credit ratings on Financial Guaranty Insurance Co. from AAA to AA and placed various ratings on MBIA Insurance Corp., XL Capital Assurance Inc., and their related entities on CreditWatch with negative implications. The rating agency also downgraded its senior unsecured and issuer credit ratings on FGIC Corp. from AA to A and placed all FGIC ratings on CreditWatch with developing implications. S&P said the actions take into account its recently announced negative rating actions on thousands of residential mortgage-backed securities and collateralized debt obligations and are "the result of our most recent review of all the bond insurance companies' capital plans." The review is part of S&P's "ongoing assessment of the potential subprime-related losses that these bond insurers might incur and how they are managing their capital positions to handle the losses," the rating agency said. S&P can be found online at http://www.standardandpoors.com.