“This is essentially evidence that S&P has signed off any tentative deal”
Wall Street bolted higher Monday after Standard & Poor’s affirmed its ratings for Ambac Financial Group Inc. and MBIA Inc., raising hopes that troubled bond insurers will emerge from the credit market crisis on solid footing. The Dow Jones industrials rallied nearly 190 points.
There has been speculation that Ambac might find sufficient capital early this week to hold onto the stellar ‘AAA’ rating it needs to remain in the municipal bond business. Rating agencies including S&P have been under pressure to downgrade the insurers after they had weakened their financial positions by insuring subprime mortgage securities that later collapsed. Read more
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