“Another troubling aspect of Moody’s rating process is that it was conducted without the transparency mandated under the Dodd-Frank Act and required by Moody’s own Professional Code of Conduct, which is posted on Moody’s website. 1 Specifically, Moody’s still has not shared material capital model results with us, despite our repeated requests throughout the process. As importantly, on the limited information provided, Moody’s would not discuss underlying assumptions used to achieve these summary results nor assure us that all Moody’s rated companies are stressed similarly.“If we look at the three years since our last detailed Moody’s review, when AGM and AGC were assigned ratings of Aa3, we have materially increased our financial strength while significantly decreasing our insured exposures. During this period of global financial stress, Assured Guaranty produced a total of $1.8 billion in operating earnings. We increased statutory capital by $1.4 billion and decreased our statutory insured par in force by $116 billion, which included an $11.1 billion reduction of U.S. residential mortgage-backed securities (RMBS). Currently, 22% of our remaining U.S. RMBS par exposure is covered by loss mitigation agreements, further protecting Assured Guaranty’s capital. Our solid capital position and decreasing exposure over this time period has also resulted in a 38% reduction in our insured leverage. We also held total claims-paying resources at approximately $12.5 billion even after paying over $3.0 billion (before R&W recoveries) to protect policyholders. These strong results certainly should have led, at a minimum, to a rating affirmation.
Assured Guaranty Disputes Moody’s Rating Decision And Announces Future Actions
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.