More like the value without. Monoline CIFG likes its sloganeering. Long or Short Capital wryly takes note of another one:
CIFG: THE NEW GENERATION IN TRIPLE-A FINANCIAL GUARANTY
You don’t say.
Moody’s just downgraded CIFG – which with around $95bn of bonds insured is the world’s fourth largest monoline – to Ba2.
According to CIFG’s website though, that they’ve still got a full set of triple As. (That hasn’t been the case since March) Perhaps an out of date website can be forgiven though, given that the company might not have the cash on hand to pay its IT department. It is, afterall, now facing insolvency, (emphasis ours):
New York, May 20, 2008 — Moody’s Investors Service downgraded the insurance financial strength ratings of CIFG Guaranty, CIFG Europe, and CIFG Assurance North America, Inc (collectively CIFG) to Ba2, from A1, and kept the ratings under review with direction uncertain. The rating agency said that the rating actions reflect the high likelihood that, absent material developments, the firm will fail minimum regulatory capital requirements in New York and Bermuda due to expected significant increases in modeled loss reserves on ABS CDOs. The breach of such regulatory capital requirements would put the firm in a precarious position, especially in light of the solvency provisions embedded in its CDS exposures. The review with direction uncertain reflects potential changes in the credit profile of the firm that could occur over the next couple of months as CIFG attempts to implement capital strengthening plans.
Related links
“Disappointed” – CIFG statement
Monoline CIFG downgraded – FT Alphaville