Fitch Ratings said that while the near-term rating outlook for the bond insurance industry is "negative," the intermediate-term outlook is "uncertain" based on a combination of possible positive and negative trends.
The comments came in an updated outlook on the monoline financial guaranty sector released yesterday. Fitch said that "lingering uncertainty as to ultimate subprime-related losses" in addition to capitalization questions are driving the near-term negative outlook.
Fitch noted that of the seven financial guarantors rated "AAA" for financial strength in the beginning of 2007, five have been downgraded by all three rating agencies. Fitch added that it "believes each of these companies is susceptible to further ratings pressure in the future."
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