Muni Bond Insurers Get a Lease on Life By Tom Graff About this article: It was a big day for municipal bond insurers Ambac and FSA. Muni investors may be seeing some light at the end of the monoline tunnel. Stock investors in Ambac should be careful. FSA announced a net loss of $330 million in the second quarter after increasing its estimated claims on residential transactions by $603 million. But the bigger news was that its parent, Dexia, has contributed $300 million in fresh capital to FSA and has assumed all risk in FSA's guaranteed investment contracts. In response, Standard & Poor's affirmed FSA's AAA rating, although the outlook was revised to negative. Fitch affirmed FSA's rating at AAA with a stable outlook. There is no word yet from Moody's, which had put FSA's Aaa rating on negative watch in July. However, Moody's did release a very telling FAQ on its ratings methodology for the monoline insurers. Moody's... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200.

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