(Updates with Assured comment in fourth paragraph.)
Nov. 30 (Bloomberg) -- Assured Guaranty Ltd.’s bond insurance units were cut two steps by Standard & Poor’s after the ratings company overhauled the way it grades guarantors.
Assured Guaranty Municipal Corp. and Assured Guaranty Corp. were lowered to AA- from AA+, S&P said in a statement today. The insurers don’t hold enough capital under new restrictions to mitigate so-called largest obligor concentrations, S&P said.
Those “could add volatility to the companies’ capital and operating performance, and hence limit the rating without additional capital to mitigate this risk,” S&P said.
The change “is solely based on S&P’s new criteria for rating financial guaranty companies, as to which we have previously registered our concerns,” Assured said in a statement. “Despite the higher capital standards, Assured Guaranty has maintained its ratings in the AA category by continuing to execute its capital enhancement strategies.”
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