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’Merrill’s surprise CDO writedown, revisited
When did Merrill know about its surprise CDO writedown?
Commentators last week were revisiting the issue of “tranche warfare” on CDOs, and some of the legal tussels which have been going on. Which, it turns out,
Fitch, Moody’s act on SCA and XL Capital
Bond insurers just can’t catch a break.
The day after XL Capital announced its intention to recapitalize SCA (to the tune of $1.8bn) and to play nice with Merrill Lynch, both Fitch and Moody’s decide to take action.
SCA avoids insolvency after $1.8bn injection
Security Capital Assurance, a bond insurer that has guaranteed $155bn of bonds, has averted insolvency after XL Capital, the Bermuda-based insurance company, agreed to pay $1.78bn to SCA and Merrill Lynch agreed to cancel $3.5bn worth of CDO hedges in exchange for $500m.
Les menaces monolines
Unfortunate news for Belgian-French bank Dexia today as monoline FSA draws down on a $5bn credit line.
Such is the power of Ackman.
But there’s monoline pain elsewhere in francophone Europe. Take Credit Agricole.
XL Capital and XL Financial join the junked insurers’ club
Moody’s Investors Service has downgraded to B2, from A3, the insurance financial strength ratings of XL Capital Assurance Inc (“XLCA”), XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd (“XLFA”).
Throwing good money after bad
Here’s a reason why you wouldn’t want to bailout a monoline:
Given the current amount of severe stress facing many of the monoline financial guarantors, it is extremely unlikely that all stakeholders will be made whole.
Truism du jour: ‘SCA, your shareprice is below standard’
Just up on monoline SCA’s website:
Security Capital Assurance Ltd Notified of Non-compliance with NYSE Continued Listing Standard
HAMILTON, Bermuda, April 8, 2008
Security Capital Assurance Ltd (“SCA”
Who’s super senior?
Could this legal squabble between Merrill and SCA have implications for billions of dollars of CDOs?
The squabble is a lawsuit filed by monoline SCA against Merrill Lynch. Merrill Lynch had already filed a lawsuit against SCA in mid-March.
More monoline trouble looms
Welcome back the spectre of the monoline downgrade.
And we have a new milestone. SCA became the first of the AAA-badged bond insurers to have its rating slashed to below investment grade. ACA, which succumbed to junk status some months ago,
Monoline dominoes – who falls when
In a credit note sent out to clients on Friday, RBS started to outline what it thought was on the horizon for the monolines:
From a rating perspective, in the absence of a bail-out, we see the agencies as more likely to downgrade than not,