Sunday, November 9, 2008

Everyday is a new day at the ratings agencies

THESE BESPOKE TRANCHES

Holy estimation technology Batman, but whatever did occur this week to prompt this ratings change?

Are their ratings set so that there is always a 50% chance of a 'deterioration in credit' every x months or so?

Anyway, the four-step program:

MBIA and Ambac, previously the world's two biggest bond insurers, lost their top AAA ratings earlier this year because of potential losses on credit swaps sold to guarantee CDOs backed by home loans. Moody's Investors Service cut New York-based Ambac's bond insurance rating four levels yesterday to Baa1, three steps above junk, because of potential losses on the derivatives.
...
MBIA, the Armonk, New York-based insurer crippled by ratings downgrades earlier this year following losses from such contracts, has said it sold $126.3 billion in guarantees on slices of CDOs backed by corporate bonds, mortgages and other debt. Ambac sold $60.7 billion in guarantees ...


Despite this, the week belonged to private equity.

No comments: