UPDATE 1-GS says SCA's ability to write new business a concern

martes 26 de febrero de 2008 12:23 CET

(Recasts; adds analyst's comments, background)

Feb 26 (Reuters) - Goldman Sachs said it was concerned about bond insurer Security Capital Assurance's SCA.N ability to write new business after it was downgraded by all three rating agencies.

The brokerage raised its price target on bond insurers MBIA Inc (MBI.N: Cotización), Ambac Financial Group Inc ABK.N and SCA on Tuesday, a day after Standard & Poor's removed its threat of an imminent downgrade on MBIA's rating, and affirmed Ambac's "AAA" grade.

Security Capital Assurance may struggle as a single-A rated company, analyst James Fotheringham said in a note to clients.

"However, we continue to value SCA as an ongoing concern pending details of management's capital and business plans," he said.

On Monday, S&P said it cut the "AAA" ratings on SCA's unit, XL Capital Assurance Inc, by six notches to "A-minus," adding it was under review for further downgrades.

SCA has already been cut by Moody's Investors Service to "A3," the seventh-highest investment grade, and by Fitch Ratings to "A," the sixth-highest investment grade.

S&P ended its downgrade review for MBIA's top "AAA" rating, citing success by the largest U.S. bond insurer in raising new capital. The outlook was negative, indicating a rating cut may still be likely over the next two years.

Ambac, however, remains on review for downgrade, S&P said.   Continuación...