NEW YORK, March 6 (Reuters) - Moody’s Investors Service on Thursday cut its top ratings on bond insurer CIFG Guaranty in what could be a crippling blow to its business, citing “significant” exposure to risky residential mortgage-backed securities.
Moody’s cut CIFG’s insurance financial strength rating four notches from “AAA” to “A1” — the fifth highest investment-grade rating. The outlook is stable, indicating an additional downgrade is not anticipated over the next 12 to 18 months.
Banque Populaire and Caisse d’Epargne, which together own French bank Natixis (CNAT.PA), took over control of CIFG from Natixis last year as part of a $1.5 billion capital injection aimed at stabilizing CIFG’s top ratings. (Reporting by Karen Brettell)