S&P puts MBIA Mexico on watch

Standard & Poor's said it placed its AAA global scale rating on MBIA Mexico SA de CV on CreditWatch with negative implications and affirmed the mxAAA national scale rating with a stable outlook.

The rating action mirrors the action taken on parent company MBIA Insurance Corp. following the agency's recent review of all the bond insurance companies' capital plans, which resulted in the downgrade or placement on CreditWatch of many residential mortgage-backed securities and collateralized debt obligations.

The agency said the rating on MBIA Mexico is based on the comprehensive support MBIA provides to MBIA Mexico in the form of a reinsurance agreement, which calls for MBIA Mexico to cede 100% of its net exposure to MBIA, in addition to a net-worth maintenance agreement from MBIA.

The stable outlook on the national scale ratings on MBIA Mexico reflects S&P's expectations that the ratings on MBIA will continue to support the mxAAA rating.

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