Financial Guaranty

Rating Agency Developments

On July 19, Moody’s issued its U.S. RMBS surveillance methodology.  Moody’s Report

On July 19, DBRS released its criteria for rating guarantees and other forms of explicit supportDBRS Report

On July 19, KBRA released its financial guaranty rating methodology.  KBRA Report

On July 19, Fitch released its national scale criteria for rating money market fundsFitch Report

On July 17, Fitch released its criteria for evaluating third-party partial credit guaranteesFitch Report

On July 16, Fitch released its criteria for rating U.S. RMBSFitch Report

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Bank of America’s Motion to Consolidate Actions by Bond Insurers Denied

On October 31, 2011, Justice Bransten of the Supreme Court for the State of New York denied Bank of America’s (“BofA”) motion to split the successor liability claims from four separate lawsuits pending against the bank and consolidate those claims into a single case. Four monoline insurers that insured Countrywide mortgage-backed securities – MBIA Inc., Syncora Guarantee Inc., Ambac Assurance Corp., and Financial Guaranty Insurance Co. – have sued BofA and Countrywide for fraud and breach of contract. BofA argued that the nearly identical successor liability claims in the four suits should be severed from the individual cases, consolidated, and stayed until after primary liability is decided. Justice Bransten agreed the claims were similar but found severance and consolidation would prejudice MBIA, the first to file suit, by unduly delaying its claims while the other insurers conduct discovery. Decision.