Incitec Pivot and Origin ready to sell bonds

Incitec Pivot Ltd may be the next company considering a corporate bond issue, either in the domestic market or more likely in the US. The maker of fertiliser received 'BBB/A-2' long- and short-term credit ratings from Standard & Poor's with a stable outlook.

It seems almost certain that Origin Energy has a US bond issue under consideration. It has just obtained 'Baa1/P-2' long- and short-term credit ratings from Moody's Investor Service. It is already rated 'BBB+/Watch Pos/F2' by Fitch Ratings and 'BBB+/Positive/A-2' by S&P.

Fitch resolved its Rating Watch Negative on Assured Guaranty Corp. and subsidiary Financial Security Assurance Inc. It lowered the Insurer Financial Strength ratings assigned to both companies by one notch to 'AA-' and 'AA' respectively, and assigned a negative outlook to both ratings.

The rating actions primarily reflect increased expectations of credit losses arising from the companies' residential mortgage securitisation exposures. To date, most of the claims activity experienced by Assured and FSA has been from exposures to securitisations of second lien mortgages, Fitch said.

The negative outlook has been assigned pending greater clarity on loss mitigation and capital initiatives. Absent tangible progress on these initiatives and/or a material improvement in RMBS loss expectations, the ratings could face downward pressure.  
Moody's still has its 'Aa3/Aa2' ratings on the two credit wrappers on review for possible downgrade, while S&P rates both 'AAA'.

As a result of the downgrades, Fitch also lowered the rating on the A$659 million of bonds issued by Sydney Airport Finance and wrapped by FSA to 'AA/Negative'. The underlying ratings on Sydney Airport Finance are 'BBB/Stable'.