To varying degrees, all of the monolines were affected by their exposure to these new securitized models, and most problematically to exposures to structured finance credit default swaps in residential mortgages.
The actual numbers of mortgage defaults went well beyond what the models projected, and the monolines that participated more heavily in the SF CDO guarantee business were the ones that got burned the most," according to the white paper.
It was a stable business model for these monoline companies: Receive a constant supply of insurance premiums in return for backing debt obligations that had very little default risk.
'' bond insurers in the wake of recent bad news as it had already become optimistic about the monoline
issue after recent rescue plans.
At a time when monoline
consumer finance companies faced heightened regulatory scrutiny and confronted serious balance sheet difficulties, Rich Fairbank opted to transform his.
The market has been closely watching the fate of monoline
bond insurers -- which cover the risk of bonds or other securities defaulting -- as their payments are expected to swell amid the U.
If monolines were to lose their triple-A ratings, it would provide a blow as monolines rely on credit ratings to secure business.
monoline issue was also reinforced by an online report Tuesday by British newspaper the Times that a $3 billion bailout of Ambac by a consortium including several banks could be insufficient to rescue the U.
whose insurer financial strength is rated 'AAA', has indirect exposure to WorldCom in several CDOs insured by 'AAA' monolines, all of which would have significant subordination remaining, even assuming a complete loss on WorldCom.
Niche financial guarantors and monoline reinsurers have exposure to WorldCom that, for some, may result in claims and/or reduced profitability.
Lam expects the readiness of monolines
and swap houses to help pave the foundation for future issuances in 2002.
bond insurers and reinsurers rated by Fitch have a small amount of indirect exposure to Enron or its subsidiaries within highly rated CDO's and pooled credit derivatives.