Ambac, MBIA finally get S&P downgrade, Moody's to follow suit

News

Beleaguered monoline insurers Ambac and MBIA have lost their Standard & Poor's (S&P) AAA ratings, just a day after Moody's placed both firms under review as a precursor to downgrade action of its own. (See also Asia Risk March 2008, pages 14-17).

The immediate market reaction to the downgrades tells its own story. Five-year credit default swaps (CDSs) for Ambac Assurance moved from 957.4 basis points on May 28 to 1,587.9bp on June 5, while the cost of protection on MBIA Insurance rose from 919

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here