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’Oh snap, we’d almost forgotten about the bond insurers
But Moody’s clearly hasn’t – the ratings agency is threatening anew to downgrade MBIA and Ambac (remember them?)
Highlights from the statement:
New York, September 18, 2008 — Moody’s Investors Service
Sector snap: monoline insurers and the GSEs
It’s getting harder to play the mortgage market, if the relative performance of the varied monoline insurers and Fannie Mae and Freddie Mac is any thing to go by.
Ambac and MBIA are up and down like a [CENSORED! Ed.] this morning:
Ambac, MBIA dodge a bullet at S&P
Ambac And MBIA Insurance ‘AA’ Ratings Affirmed And Taken Off CreditWatch; Outlook Negative
NEW YORK Aug. 14, 2008–Standard & Poor’s Ratings Services said today it affirmed its ‘AA’ financial strength ratings on both MBIA Insurance Corp.
Ambac trading halted in New York after shares slide to $1.04
Via Bloomberg:
Ambac, the world’s second-biggest bond insurer, stopped trading on the New York Stock Exchange in a “subpenny halt” after its share price fell as low as $1.04.
Ambac declined 3 cents,
Fresh GIC threat to bond insurers
Concerns have surfaced about fresh risks to bond insurers that could further darken the outlook for the most troubled groups and affect the last remaining insurers with triple A credit ratings. On top of heavy losses on subprime mortgage-related bonds that they guaranteed,
Number crunching: Monoline writedowns
An RBS credit research note circulated earlier to clients noted that banks have so far taken $25.7bn in writedowns against their monoline exposure.
That is, writedowns on the market value – or effectiveness – of CDS as insurance contracts against existing gross holdings of ABS CDOs.
Fitch capitulates, withdraws all ratings on MBIA and Ambac
The statement:
Fitch Ratings is withdrawing all of its outstanding ratings on MBIA Inc, MBIA Insurance Corp. (MBIA), and other related entities. Also, Fitch is withdrawing all of its outstanding ratings on Ambac Financial Group,
CDS update: it’s all about the bond insurers, baby
Traders in the market for credit default swaps are treating MBIA and Ambac like the most distressed of credits, as doubts around the viability of the insurers’ business models mount.
Five year CDS contracts on MBIA’s bond insurance unit hit a record of 42.5 points upfront on Tuesday,
When the bond insurers finally go…
How solvent are the bond insurers? A little less so as of today. From MBIA:
As a result of the downgrade to A2, MBIA expects that it will require $2.9 billion to satisfy potential termination payments under Guaranteed Investment Contracts (GICs).
Bond insurers seek to wipe out contracts
Bond insurers such as Ambac, MBIA and FGIC are talking to banks about wiping out $125bn of insurance on risky debt securities, in what could be the only way to limit the financial damage surrounding the so-called monolines.
The end of MBIA and Ambac?
Moody’s downgrading of MBIA and Ambac should be a cathartic event.
It means that the companies – in current form – will not write business ever again.
MBIA has been downgraded all the way to A2. It.
Moody’s downgrades Ambac, MBIA
Moody’s on Thursday stripped the bond insurance arms of Ambac Financial Group and MBIA of their Triple A ratings, downgrading Ambac to Aa3 and MBIA to A2, citing their impaired ability to raise capital and write new business,
Monowhine II
This thing is over already, the market just doesn’t know it yet.
- Bill Ackman, speaking on Wednesday in New York.
He refers, of course, to the continuing existence of the monolines. Though he could equally be talking about his own involvement with them – since he’s widely believed to have closed out his shorts on Ambac and MBIA already.
Credit creep and the monoline monsters
The impact of monoline downgrades on banks’ Q2 numbers is back in focus. Monolines, full stop, are back in focus.
But no sooner had CreditSights done their run down of the prospect for damage among the European banks,
Ambac asks Fitch to remove ratings
US bond insurer Ambac Financial Group said on Wednesday it has asked Fitch Ratings to remove its ratings on the company and all its subsidiaries, reports Reuters. Ambac said it decided to terminate its ratings contract as part of a re-evaluation of its ratings needs,
Ambac, like MBIA, wants Fitch to withdraw its ratings
This just out from Fitch:
Fitch Issues Statement on Ambac Withdrawal Request 18 Jun 2008 1:02 PM (EDT) Fitch Ratings-New York-18 June 2008: Fitch Ratings today received a request from Ambac Financial Group,
Banks face $10bn monoline charges
Citigroup, Merrill Lynch and UBS, the banks most exposed to Ambac and MBIA, could face further writedowns of up to $10bn after the bond insurers last week lost their fight to retain their triple A credit ratings and were downgraded by Moody’s and S&P,
Short View: Credit crisis returns
On Thursday, the market’s worst fears were realised, MBIA and Ambac Financial, the two biggest monoline bond insurers, lost their triple A credit rating from Standard & Poor’s.
Had this happened at any point in the first three months of this year,
Monoline flatline: S&P downgrades MBIA and Ambac
That’s it then.
NEW YORK (Standard & Poor’s) June 5, 2008–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.
Snap news
The latest on Friday,
- Standard & Poor’s finally removes triple A ratings from bond insurers MBIA and Ambac. Bloomberg. S&P statement
- SABMiller and Molson Coors get US regulatory nod to pursue MillerCoors joint venture.
Tilting at windmills, rating agency edition
Finally, perhaps, just maybe… recognition that there is no way MBIA and Ambac are triple A institutions? Moody’s put both monolines on review for downgrade, which given past treatment of them both could mean anything.
Moody’s moves on the monolines
More bad news for the bond insurers this afternoon, as Moody’s threatened to strip both Ambac and MBIA of their triple-A ratings.
The ratings agency didn’t mince words, warning it could downgrade MBIA – the larger of the two – to single-A and Ambac to double-A amid concerns over the companies’ credit profiles and capital adequacy.
Monolines back in the spotlight
Yves Smith at Naked Capitalism picks up a piece in Tuesday’s New York Post – surprisingly, on collateralised debt obligations and monoline bond insurers.
In a nutshell, the Post is reporting that monolines are hampering banks’ efforts to liquidate CDOs.
Second-lien fallout
There’s a monoline-related barney going on.
After raising capital in February and March, temporarily easing concerns about their future, the bond insurers are back in the spotlight. First there’s the matter of accountancy - and the prospect of having to set aside money to cover losses on troubled securities earlier,
Death by accountancy, monoline edition
More good news for monoline shorter Bill Ackman, with MBIA down 8.3 per cent and Ambac down 5 per cent on Friday.
Why? Because of this, from the FASB (HT, Naked Capitalism):
The recognition approach for a claim liability relating to a financial guarantee insurance contract requires that an insurance enterprise recognize a claim liability when the insurance enterprise expects,
Moody’s fit of pique: MBIA triple-A not so triple-A
What goes up…
MBIA – which filed its quarterly results on Monday – enjoyed something of a share price bounce. Odd considering that the results, by any yardstick, were dismal. Shareholders seemed more than willing to toe the line from CEO Jay Brown:
More pain for Ambac
Ambac Financial lost nearly half of its market value on Wednesday as the bond insurer warned that potential losses related to mortgage-backed securities could reach more than $3bn, vastly more than had been anticipated.
Ailing Ambac
Is this a non-business? It certainly looks like it.
Set aside the quarterly net loss of $1.66bn, or $11.69 a share. Glance beyond the total of $1.73bn in mark-to-market losses on credit derivatives – $940m of which Ambac now expects to have to pay out on – and a further $1bn in loss provisions on insurance written on MBS.
Settlement risk: ISDA’s CDS monoline lists
The International Swaps and Derivatives Association has made some lists – specifically lists of all the CDS contracts out there which reference a monoline. Simply, all the “insurance” contracts on say,