Assured Guaranty Stock Soars On Ratings

NEW YORK (AP) — Shares of Assured Guaranty Ltd. soared Friday after the bond insurer said it was committed to maintaining "the highest possible rating" for the company.

Moody's Investor Service on Thursday had dropped its insurance financial strength rating on the Bermuda-based company one notch to "Aa3" from "Aa2" and warned further cuts could come.

The move was based largely on Assured Guaranty's exposure to mortgage-backed securities, Moody's said.

In response to the downgrade, Assured Guaranty President and CEO Dominic Frederico said Friday the company would implement a capital plan to maintain its investment-grade double-A ratings.

The initiatives, which entail external reinsurance, intercompany capital support and about $300 million of additional capital, are to solely support rating agency capital requirements, Frederico said.

The company's stock rose $2.80, or 15 percent, to $20.90, in afternoon trading.

Also on Friday, a JPMorgan analyst issued a note saying Moody's estimate of Assured's loss of $1.7 billion from mortgage-backed securities and credit default swaps was lower than its own forecast of $2.4 billion.