Wrapper about to fold

S&P resolved its CreditWatch on Ambac Assurance Corp., and slashed its counterparty and financial strength rating to 'CC' from 'BBB' and left the rating with a developing outlook. S&P flagged that the rating could soon be moved to 'R' in the event of regulatory intervention.

Ambac has asked the Wisconsin Office of the Insurance Commissioner for permission to release some contingency reserves into surplus, but the Wisconsin regulator has yet to approve such an action. If the regulator approves the release of contingency reserves to bolster surplus, S&P could raise the rating, but it is unlikely to go above the 'CCC' category.

Moody's similarly lowered its insurance financial strength rating on Ambac to 'Caa2' from 'Ba3' and left the rating with a developing outlook.

Following on from Moody's the week before, S&P also affirmed its 'BBB/Stable' senior secured rating on Broadcast Australia Finance Pty Ltd., noting the acquisition of ultimate parent company, Macquarie Communications Infrastructure Group, by Canada Pension Plan Investment Board will have no impact on credit quality.
Broadcast Australia has A$150 million of credit wrapped, July 2012, bonds outstanding in the domestic market.

Nufarm's latest earnings revision for fiscal 2009 of a further 10 per cent to 15 per cent decline on the previously revised figure of A$187 million was not enough to prompt any rating action from S&P; but S&P felt compelled to issue a statement to this affect. S&P also took the opportunity to note Sinochem's interest in acquiring Nufarm and leaving this potential event aside, warn that if credit metrics do not improve from current levels then the 'BBB-/Negative' rating assigned to Nufarm could be lowered.

nab subsidiary, Clydesdale Bank Plc., had its credit ratings lowered to 'A+/A-1' from 'AA-/A-1+' by S&P and left with a negative outlook. While the ratings on Clydesdale benefit from a three-notch uplift by virtue of its strategically important position within the nab group, S&P believes its stand alone credit profile has deteriorated and Clydesdale could demonstrate poor resilience to any further decline in the UK operating environment.