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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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From: ldo791/16/2008 5:12:47 PM
   of 436258
 
Sweep this crap under the rug....................

S&P Will Review Bond Insurers With New Assumptions
By Christine Richard

Jan. 16 (Bloomberg) -- Standard & Poor's will re-examine the AAA credit ratings of bond insurers including MBIA Inc. and Ambac Financial Group Inc. after deciding that the housing slump will cause bigger losses from subprime mortgages than anticipated.

S&P, which completed a review of the bond insurers in December, will rerun a stress test to ensure the companies have enough capital to withstand reductions in the ratings of securities they guarantee, said Mimi Barker, a spokeswoman in New York. The test will be completed within a week, Barker said.

The ratings company is now assuming losses on 2006 subprime mortgages will reach 19 percent, up from 14 percent, as housing prices decline further than previously thought. That may make S&P more likely to downgrade mortgage-backed securities guaranteed by the bond insurers.

After completing a test of the financial guarantors on Dec. 19, S&P put the AAA ratings of MBIA, Ambac, Security Capital Assurance Ltd. and CIFG Financial Guaranty on negative outlook. The firm placed FGIC Corp.'s AAA rating under review for a possible downgrade.

The new loan-loss assumptions ``reflect the growing economic consensus that U.S. home price declines will be larger than previously forecasted and that the slump in the U.S. housing market is expected to last far longer than previously anticipated,' S&P said yesterday.
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