Monoline woes not over: Moody’s have downgraded CIFG Guaranty and family, cutting the bond insurer’s critical Aaa rating by four notches:
New York, March 06, 2008 — Moody’s Investors Service has downgraded to A1, from Aaa, the insurance financial strength ratings of CIFG Guaranty, CIFG Europe and CIFG Assurance North America, Inc. (collectively “CIFG”). These rating actions reflect Moody’s assessment of CIFG’s weakened capitalization, impaired business opportunities, and uncertain strategic direction, as a result, in part, of its exposures to the US residential mortgage market. The rating outlook is stable.
CIFG insures around $95bn of bonds, all of which have similarly been downgraded by four notches. Muni bond and structured credit markets are expected to suffer today on the news. The details for each class of security can be found here:
Structured finance bonds
The CIFG downgrade comes despite a $1.5bn capital injection from CIFG’s parent companies (via Natixis), Banque Populaire and Caisse d’Epargne, in November last year.