Thursday, December 20, 2007
The ratings agencies have been subject to some criticism for not reacting quicker to the mortgage market crisis. In a sign that the market's troubles are not over, yesterday Standard & Poors cut the bond rating of one bond insurer, ACA Financial Guaranty, from A to CCC and, while not cutting their ratings, assigned a "negative outlook" to four other companies that guarantee debt linked to home mortgages. ACA announced it had negotiated a postponement of its contractual commitment to post $1.7 billion in collateral if its rating fell, but it needs to find a more permanent solution. NYTimes,
Bond Insurer Cut to Junk; Negative Outlook for 4 More.