Fitch Ratings today said it has released a new report examining the effect of the 2007 subprime crisis on the bond insurer industry. From the press release:

While the bond insurer industry has remained fairly well-insulated from the problems being faced in these sectors, Fitch believes problems that began in the U.S. subprime mortgage market have caused credit spreads to widen in the financial guaranty industry, as well as many other sectors of the capital markets. “Financial guarantors’ financial statements are directly exposed to movements in credit spreads due to their exposure to pooled credit default swaps that reference underlying obligations on corporate debt or ABS-CDOs,” said Joo-Yung Lee, a director at Fitch Ratings. “Recently, the reported U.S. generally accepted accounting principles net income for each financial guarantor has become adversely affected by the credit spread widening that has taken place in the past several months of 2007,” she said.

It’s a rather cryptic release, which is rare for Fitch – the agency usually at least suggests what the report finds in some more detail. But the content provided does suggest that Fitch’s expectation here may differ somewhat from Moody’s Investors Service, which had said in late September that the subprime exposure of financial guarantors was “well contained.” For more information, visit http://www.fitchratings.com.