Fitch: Ambac put on Rating Watch Negative
From MarketWatch: Fitch warns it may cut Ambac’s AAA rating
The AAA rating of Ambac’s bond insurance unit was put of Rating Watch Negative by Fitch, which means the agency will downgrade to AA+ in four to six weeks unless the company can boost is excess capital levels before then. A review by Fitch of Ambac’s exposure to CDOs and residential mortgage-backed securities found that the insurer is roughly $1 billion short of the extra capital it needs …
Yesterday, Fitch put MBIA on Rating Watch Negative, and then followed up by putting “173,022 bond issues (172,860 municipal, 162 non-municipal) insured by MBIA on Rating Watch Negative”. We will probably see another large number of issues on Rating Watch Negative later today.
On topic, from Bloomberg: Muni Insurance Worthless as Borrowers Shun Ambac
State and local borrowers are discovering that buying municipal bond insurance from MBIA Inc. and Ambac Financial Group Inc. […]
