S&P cuts Bond Safeguard, Lexon outlooks to negative

Standard & Poor's said it revised its outlook on Bond Safeguard Insurance Co. and Lexon Insurance Co. to negative from stable.

At the same time, S&P said it affirmed its BBB- counterparty credit and financial strength ratings on these companies.

The agency noted that the outlook revision reflects its view that the companies face a heightened threat of earnings and revenue disruptions because of their significant exposures related to the housing market, as about half of the companies' combined surety book is for subdivision projects.

However, partially mitigating this heightened systemic risk and supporting the affirmation, the companies have not yet experienced any significant losses related to the housing market or otherwise and the companies have continued to produce favorable operating results so far in 2007, both beating the industry average and meeting all of S&P's expectations.

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