Frederico On Moody’s Downgrade Threat
Bermuda’s Assured Guaranty Ltd. today [Mar. 21] responded to the announcement by Moody’s Investors Service that it has placed the debt ratings of Assured Guaranty and its subsidiaries and the insurance financial strength ratings of Assured Guaranty’s insurance subsidiaries under review for possible downgrade.Meanwhile, What's Trading looks at the options:
In its announcement, Moody’s cites constrained business opportunities for financial guaranty insurance and continued economic stress for US municipal, mortgage, and European exposures.
In response to the announcement, Dominic Frederico [pictured], president and CEO of Assured Guaranty, said: “We have been working with Moody’s for some time, emphasizing the improvements in our credit profile since their last review in 2009.
“As the current rating process is not yet complete, we are surprised that Moody’s decided it had enough information to place Assured Guaranty on review for a possible downgrade....MORE
Clean up on aisle 6! Assured Guaranty (AGO) lost $3 to $15.82 and implied volatility in the options on the stock is up sharply after Moody’s put the bond insurance company’s credit rating up for review for possible downgrade. AGO is under fire and options volume is running 5.5X the daily average. 8,150 puts and 5,745 calls traded on the stock so far. May 14 puts, which are now 11.5 percent out-of-the-money, are the most actives....MOREIt appears the stock price is neither assured nor guaranteed, last trade $16.00, down 14.98% on the day.
Maybe Mr. R. just buys MCO?