http://www.concurringopinions.com/archives/2007/11/corporate_law_gorilla_award_2007.html The Law, the Universe, and Everything Tue, 14 Feb 2012 14:29:40 +0000 hourly 1 http://wordpress.org/?v=3.2.1 http://www.concurringopinions.com/archives/2007/11/corporate_law_gorilla_award_2007.html/comment-page-1#comment-51458 Ben Barros Tue, 27 Nov 2007 22:46:50 +0000 http://www.solove.org/archives/2007/11/corporate-law-gorilla-award-2007.html#comment-51458 If the big bond insurers like MBIA and Ambac get downgraded because of the subprime mess, there could be a big ripple effect throughout the markets. A lot of investment-grade securities get their rating from the insurance policy (or "wrap") that the bond insurers place on the issue. If the insurers get downgraded, a lot of debt instruments might also get downgraded. Among other things, entities that can only hold investment-grade instruments might be forced to sell lots of this stuff at the same time. If the big bond insurers like MBIA and Ambac get downgraded because of the subprime mess, there could be a big ripple effect throughout the markets. A lot of investment-grade securities get their rating from the insurance policy (or “wrap”) that the bond insurers place on the issue. If the insurers get downgraded, a lot of debt instruments might also get downgraded. Among other things, entities that can only hold investment-grade instruments might be forced to sell lots of this stuff at the same time.

]]>