Standard & Poor’s Ratings Services said it has affirmed the “double-A” financial strength ratings on both MBIA Insurance Corp. and Ambac Assurance Corp.
The ratings on both bond insurers were removed from the S&P’s rating watch negative, but the outlook on both companies was deemed negative.
“We assigned a negative outlook to MBIA due to its significant exposure to domestic nonprime mortgages and related exposures to collateralized debt obligations (CDO) of asset-backed securities (ABS),” S&P’s credit analyst David Veno said in a statement.
“The negative outlook on Ambac reflects our view that the company’s exposure to domestic nonprime mortgages and related exposures to CDO of ABS has likely damaged its franchise and that the company faces diminished new business flow,” said S&P credit analyst Dick Smith.
S&P said removal of the negative outlook for both companies will depend on clarification of ultimate potential losses as well as future business prospects, the outcome of strategic business decisions, and potential regulatory developments.
Lists of the ratings that have changed as a result of these actions will be posted at www.spviews.com.