Other rating actions

One company that has been able to use asset sales to advantage its credit rating is AGL Energy. S&P revised the outlook on the 'BBB' long-term rating that it assigns to the company to stable from negative. The revision stems from AGL's improved balance sheet structure following the sale of its investment in Queensland Gas Company Ltd. and its advice to S&P that it will prudently pursue growth opportunities without putting its credit quality at risk.

The Swiss cement company, Holcim Ltd. still has some $260 million of August 2009 bonds on issue in the domestic market via its Australian subsidiary. Moody's revised the outlook on the 'Baa1/P-2' ratings that it assigns to the group to negative from stable.

The revision was prompted by weaker than expected results for the first nine months of 2008, the likelihood of negative free cash flow as expansion projects are funded over the next 12-18 months and the uncertainties that Holcim is facing in many of its markets due to the global economic downturn. Fitch also changed the outlook to negative on the 'BBB+/F2' ratings that it assigned to Holcim a week earlier for similar reasons.

The credit ratings assigned to the credit wrappers are heading south again. S&P lowered its financial strength rating on Ambac Assurance Corp to 'A' from 'AA' and left the rating with a negative outlook. Continuing losses from exposures to the US residential mortgage sector and related CDO structures was again the main trigger.
Earlier in the week, S&P lowered its financial strength rating on Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) to 'B' from 'BBB-', as a result of the company's delay in implementing its restructuring plan and slow progress in its negotiations with counterparties of its CDOs of ABS exposure. S&P said failure to develop strategic alternatives for problematic credits in its insured portfolio could lead to regulatory intervention.