S&P Global Ratings has placed certain ratings for Build America Mutual Assurance Co., MBIA Inc. and National Public Finance Guarantee Corp. on CreditWatch negative pending a review of the companies' competitive positions.
The rating agency placed the negative CreditWatch on Build America Mutual Assurance's AA financial strength rating, MBIA's A- long-term counter-party credit rating, and National Public Finance Guarantee's AA- financial strength rating.
S&P Global Ratings will compare the companies' operations to peer companies like Assured Guaranty Ltd.'s operating subsidiaries in a review, which could lead to downgrades. Any downgrades are not expected to be by more than one notch.
Build America Mutual Assurance's rating was placed on negative CreditWatch due to its share of industry insured par and premiums written, along with its risk-based pricing, which may not support the current AA financial strength rating. The company, which has been able to increase its business volume year over year, may be limited competitively by its underwriting strategy geared toward the U.S. public finance market, the rating agency said.
National Public Finance Guarantee's ratings were placed on CreditWatch negative due in part to its struggle to gain "wide market acceptance," its exposure to volatility, and the "macroeconomics of a single market," the rating agency said.
The decision to place MBIA's rating on negative CreditWatch was a reflection of the company's "structural subordination" to National Public Finance Guarantee.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.