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Article: Moody's Withholds MBIA's A2 Rating From Reinsured FGIC Debt.(News)
- Article from:
- The Bond Buyer
- Article date:
- October 30, 2008
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Byline: Jack Herman
Moody's Investors Service will not assign MBIA Insurance Corp.'s A2 rating to the approximately $166 billion portion of Financial Guaranty Insurance Co.'s U.S. public finance book that the financial guarantor has agreed to reinsure because the deal does not meet the rating agency's credit substitution standards, Moody's said in a special report earlier this week.
FGIC's ability to terminate the deal without a payment to MBIA prevents it from meeting Moody's requirements for substitution, Moody's said. FGIC could cancel the deal if MBIA becomes insolvent, falls below investment grade, or for a number of other reasons.
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