S&P cuts Ambac, MBIA ratings to AA from AAA

Usually this means TROUBLE …

I am really excited about the explanations, NOT to SELL financials …

Standard & Poor’s Rating Services

today lowered its financial strength ratings on Ambac Assurance Corp. and MBIA Insurance Corp. to ‘AA’ from ‘AAA’ and placed the ratings on CreditWatch with negative implications.

The ratings on the holding companies, Ambac Financial Group and MBIA Inc., have also been lowered to ‘A’ and ‘A-’ from ‘AA’ and ‘AA-’, respectively, and placed on CreditWatch with negative implications.

The rating actions on the companies reflect our belief that these entities will face diminished public finance and structured finance new business flow and declining financial flexibility.

In addition, we believe continuing deterioration in key areas of the U.S. residential mortgage sector and related CDO structures will place increasing pressure on capital adequacy.

The ‘AA’ financial strength ratings of these companies are supported by currently sound claims paying ability and liquidity levels in our opinion.

Resolution of the negative CreditWatch will be dependent on clarification of ultimate potential losses as well as future business prospects, the outcome of strategic business decisions, and potential regulatory developments.

AUTSCH!!!

Tags: bond insurers, financials

This entry was posted on Donnerstag, Juni 5th, 2008 at 19:52 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.