An online story about Standard & Poor’s downgrade of MBIA Insurance Corp. did not correctly cite S&P’s rationale relative to National Public Finance Guarantee Corp.’s separation of business from MBIA and National’s developing outlook.
On the issue of the business separation, Standard & Poor’s wrote that “the ring-fencing actions it has taken so far have had limited impact in that we view National as no more or less ring-fenced than any typical bond insurance subsidiary operating in a consolidated group.”
Regarding the outlook and what could prompt a downgrade, the agency wrote that “an ongoing lack of market acceptance and continued weak financial flexibility could result in a downgrade to the BBB category.”
