Moody’s Investor Service announced that they are going to modify the rating methodology applied to structured finance securities insured by financial guarantors aka monolines. From the FT
New York, July 14, 2009 — Moody’s Investors Service is modifying the rating methodology it applies to structured finance securities insured by financial guarantors. Specifically, starting September 1, 2009, Moody’s will withdraw the ratings on those structured finance securities insured by guarantors that have financial strength ratings below Baa3 (that is non-investment grade) if either of two conditions are met: Moody’s is unable to determine an underlying rating (i.e., absent consideration of the guaranty) on the security or the issuer has requested that theguaranty constitute the sole credit consideration.
New York, July 14, 2009 — Moody’s Investors Service is modifying the rating methodology it applies to structured finance securities insured by financial guarantors. Specifically, starting September 1, 2009, Moody’s will withdraw the ratings on those structured finance securities insured by guarantors that have financial strength ratings below Baa3 (that is non-investment grade) if either of two conditions are met: Moody’s is unable to determine an underlying rating (i.e., absent consideration of the guaranty) on the security or the issuer has requested that theguaranty constitute the sole credit consideration.
Below is a list of securities impacted by the new policy whereby their ratings will be withdrawn on September 1, 2009 unless prior to that date Moody’s is a) provided sufficient information to determine the underlying rating or b) informed by the issuer in the case of GMAC Certificados Bursatiles UDIS MXMACFW 07-5U to no longer rate the security solely based on the guaranty.
The aforementioned list is deals mostly insured by monolines like MBIA and Ambac.
We remember that these structured products got a credit enhancement in the form of a guarantee of payment of principle and interest to bond issuers.
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The aforementioned list is deals mostly insured by monolines like MBIA and Ambac.
We remember that these structured products got a credit enhancement in the form of a guarantee of payment of principle and interest to bond issuers.
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