by Calculated Risk on 5/20/2008 03:27:00 PM

From Bloomberg: CIFG Guaranty's Bond Insurer Ratings Cut to Junk (hat tip DD49)

CIFG Guaranty, the bond insurer that lost its AAA ratings in March, was downgraded to below investment grade by Moody's Investors Service, which said the company may become insolvent.

The ratings were cut seven levels to Ba2, two steps below investment grade, from A1 to reflect ``the high likelihood that, absent material developments, the firm will fail minimum regulatory capital requirements,'' Moody's said in a statement.
...
``CIFG demonstrates the cliff-like nature of these events,'' said Thomas Priore, chief executive officer of hedge fund Institutional Credit Partners LLC in New York. ``Depending on the language in the credit-default swap, it can set off a chain of events that creates a complete unwind of the company.''

From AAA to Junk in two months! Yeah, I'd call that Cliff Diving.