HomeMy WebLinkAboutRatings SummaryMunicipal Bond Insurers Ratings Summary
Insurer
Moody's
Aaa / Stable
(as of 3/11/08)
Aaa / Stable
(as of 3/14/08)
Legend
Stable
Negative Outlook'
Watch Negative / Review for
Possible Downgrade
Outlook Evolving
Developing Watch
Standard & Poor's
AAA / Stable
(as of 12/19/07)
AAA / Stable
(as of 12/19/07)
Fitch
AAA / Stable
(as of 1/24/08)
AAA / Stable
(as of 12/12/07)
Berkshire Hathaway (Columbia and
National Insurance Co. "NICO")
Aaa / Stable
(as of 4/25/08)
AAA / Stable
(as of 04/11/08)
No Rating
Aaa / Negative Outlook
(as of 2/26/08)
AAA / Negative Outlook
(as of 2/25/08)
AA / Negative Outlook
(as of 4/4/08)
Ambac
Aaa / Negative Outlook
(as of 3/12/08)
Aa3 / Negative Outlook
(as of 3/28/08)
AAA ./ Watch Negative
(as Of 3/5/08)
'AA / Watch Negative
(as of 4/08/08)
AA / Negative Outlook
(as of 03/12/08)
Ratings Withdrawn
(as of 5/02/08)
CIFG
Al / Stable
(as of 3/6/08)
A+ / Negative Outlook
(as of 3/12/08)
A- / Negative Outlook
(as of 3/31/08)
SCA (XL)
A3 / Review for Possible
Downgrade (as of 3/4/08) ."
A- / Watch Negative
(as of 2/25/08)
BB / Negative Outlook
(as of 3/26/08)
Baa3 / Review for Possible
Downgrade (as of 3/31/08)
BB / Negative Outlook
(as of 3/28/08)
BBB / Negative Outlook
(as of 3/26/08)
ACA
CCC /Watch Developing
(as of 12/19/07)
No Rating
Disclaimer: This is a summary of the current outstanding ratings and outlooks of monoline bond insurers as reported by Moody's Investors Service (Moody's), Standard and Poor's
Corporation (S&P), and Fitch Ratings (Fitch) as of the approximate date and time set forth on this summary. First Southwest Company does not guarantee the accuracy or
completeness of the data set forth herein. For the most accurate and current information, contact Moody's, S&P, and Fitch.
AI-1
First Southwest Company
Timeline of Subprime Mortgage Crisis Effect on Municipal Market
June / July 2007
* Banks begin to write -down
CDO assets.
• Credit concerns rise leading
to a flight to quality (i.e.,
Treasuries rally).
■ Municipal bonds lag
Treasuries/LIBOR as
investors flock to liquidity;
spreads to MMD widen.
August / September 2007
• Credit fears spread and risk is
re -priced across markets.
■ 1-month LIBOR jumps 40bps in
one day.
* Fed cuts discount rate 50bps.
• Sixty taxable ARS totaling $6
billion+ experience failed
remarketing.
* Investors begin to reduce
insured holdings; interest in
municipal bonds is tempered.
• SIFMA/LIBOR swap ratios soar,
becoming much Tess liquid as
dealers attempt to hedge unsold
bond positions with SIFMA
swaps.
• Higher SIFMA/LIBOR ratios
increase demand for structured
notes, helping cap SIFMA
swaps ratios despite rising
municipal bond ratios.
October / November 2007
* Market stability experienced
in Oct., but is only temporary
as credit and liquidity;
concerns remain.
• Fitch and Moody's release
reports on capital adequacy of
monoline insurers due to
subprime exposure.
• Investors begin to focus on
underlying credit strength of
insured holdings, as well as
maximum rates of ARS.
■ Yield curve continues to
steepen as money fund
assets grow.
* Long-term investors remain
on sidelines.
• S&P puts ACA's "A" rating on
Negative credit watch.
First Southwest Company
All-1
Timeline of Subprime Mortgage Crisis Effect on Municipal Market
December 2007
■ Moody's places FGIC and XL ratings on
Watchlist for Possible Downgrade; revised
MBIA and CIFG Outlooks to Negative.
• S&P places rating of FGIC on CreditWatch
Negative; revises Outlooks of Ambac, CIFG,
MBIA and XL to Negative.
w Fitch places ratings of Ambac, FGIC, MBIA and
XL on Rating Watch Negative.
• S&P downgrades ACA's financial strength
rating to "CCC" CreditWatch Developing.
■ Trading differentials of select insurers becomes
more pronounced for weak underlying credits.
• VRDBs reap benefits of money fund inflows;
AMT ARS spreads widen to 150bps due to
higher yielding auction rate investments and
investor concerns regarding liquidity.
. Issuers seek to shift out of ARS; banks flooded
with liquidity requests.
* MMD continues to rise relative to treasuries.
• Fortis exits market; Others scale back.
AI I-2
January 2008
• Fitch downgrades both Ambac and FGIC to "AA",
and ratings remain on Negative Watch.
• Both S&P and Moody's place Ambac's rating on
Watchlist for Possible Downgrade.
▪ S&P lowers FGIC's rating to "AA", and places
rating on CreditWatch with Developing
Implications.
• S&P places both MBIA and XL ratings on
CreditWatch with Negative Implications.
• Fitch downgrades XL rating to "A".
■ Fitch affirms FSA and MBIA's "AAA" ratings with
Stable Outlooks.
• Significant investor exercise of "put" options on
Tender Option Bonds.
• Insurer uncertainty causes sharp daily price
changes in municipals.
• Proposed federal economic stimulus does little to
help calm the market, as the DOW closes the
month down 4.6%, its worst January in 18 years.
• SIFMA 7-day index drops from 3.06% to 2.20%.
ela
RIO
First Southwest Company
Timeline of Subprime Mortgage Crisis Effect on Municipal Market
February 2008
• Fitch places MBIA's "AAA" rating on "Rating Watch Negative".
■ Fitch places CIFG's "AAA" rating on "Rating Watch Negative.
■ Moody's downgrades XL Capital's rating from "Aaa" to "A3" with a Negative Outlook.
■ Moody's downgrades FGIC's rating from "Aaa" to "A3" with the rating remaining on review for possible
downgrade.
■ Moody's assigns "Aaa" ratings to bonds insured by unrated Berkshire Hathaway Assurance Corporation
(BHAC), which is further supported by "Aaa" rated National Indemnity Corp (NICO). BHAC and NICO
are wholly owned by Berkshire Hathaway Inc. (Aaa rated).
■ Moody's places CIFG "Aaa" rating on review for possible downgrade.
• S&P announces bond insurer rating actions as follows:
■ XL Capital and XL Financial Assurance Ltd. were lowered to 'A-' from 'AAA' and remain on
CreditWatch with negative implications;
■ FGIC was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications;
• MBIA's "AAA" rating was removed from CreditWatch and a negative outlook was assigned;
■ Ambac's "AAA" rating was affirmed and remains on CreditWatch with negative implications; and
• "AAA" ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance NA Inc. were affirmed and
retain a negative outlook.
• Moody's confirms MBIA's "Aaa" rating and revises the outlook to "Negative".
All-3
101
spol
First Southwest Company
Timeline of Subprime Mortgage Crisis Effect on Municipal Market
March 2008
• Moody's places XL Capital's "A3" rating on review for possible downgrade.
Fitch — Ambac "AA" remains on watch negative following an announcement that the company plans to
raise at least $1 billion in common stock and $500 million in equity units.
• S&P announces that Ambac's rating will remain at "AAA" on CreditWatch with negative implications.
■ Moody's downgrades CIFG's financial strength from "Aaa" to "Al", with a stable outlook.
• Fitch downgrades CIFG to "AA-", with outlook remaining on Rating Watch Negative.
• Moody's affirms FSA at "Aaa" stable outlook.
■ Fitch affirms Ambac at "AA", Negative outlook.
■ S&P lowers CIFG to "A+" from "AAA", Negative outlook.
■ Moody's confirms Ambac at "Aaa", Negative outlook; and Assured Guaranty at "Aaa" with a stable outlook.
• Fitch downgrades SCA, including subsidiary XLCA, to "BB" from "A". The rating outlook is Negative;
revised from Rating Watch Negative .
■ Fitch downgrades FGIC to "BBB" from "AA" and revises the outlook to Negative from Rating Watch
Negative.
• Moody's affirmed Radian Asset at Aa3. The rating outlook changed to negative from stable.
• S&P downgrades FGIC to "BB" from "A", and revised the outlook to Negative from Credit Watch Negative.
■ Fitch downgrades CIFG to "A-" from "AA-", and revises outlook to Negative from Rating Watch Negative.
• Moody's downgrades FGIC to "Baa3" from "A3". Outlook remains under review for possible downgrade.
First Southwest Company
All-4
Timeline of Subprime Mortgage Crisis Effect on Municipal Market
April 2008
• Fitch downgrades MBIA to "AA" from "AAA" and revises Outlook to Negative from Rating Watch Negative.
• S&P places the Radian Asset Assurance (Radian) "AA" rating on Credit Watch Negative from Stable.
• S&P assigns "AAA" financial strength and enhancement ratings to Berkshire Hathaway Assurance Corp.
(BHAC). The BHAC ratings are based on a guaranty from Columbia Insurance Company (Columbia),
which was also assigned a "AAA" rating. Both entities were assigned a stable outlook.
• Moody's assigned "Aaa" financial strength ratings to Columbia and BHAC (a new municipal bond insurer
established by Berkshire in late 2007. All policies written by BHAC on or after March 31, 2008 are
unconditionally guaranteed by Columbia. The outlook for both entities is stable.
Mav 2008
• Fitch withdraws its ratings on Radian.
All-5
rmoo
First Southwest Company