Wilbur Ross takes a beating on Assured Guaranty

The mortgage mess has claimed another high-profile victim. Investor Wilbur Ross saw more than $100 million go up in smoke after Moody’s said it would review the rating of Assured Guaranty (AGO), the bond insurer Ross bought into earlier this year. The news that Moody’s might yank Assured Guaranty’s triple-A insurer financial strength rating sent shares of the Bermuda-based company plunging 47% in heavy trading Tuesday. Assured said it would work with Moody’s in the review, but suggested it believes any possible downgrade would be unwarranted.

“We are concerned by Moody’s announcement at a time when Assured is experiencing broad market acceptance and investor demand for our insured paper,” said CEO Dominic Frederico. “We believe it is important for investors to know that Moody’s action is not at all reflective of a deterioration in Assured’s capital base, credit exposures or earnings outlook.”

Ross made headlines in February when he shunned the two struggling U.S. bond insurers, MBIA (MBI) and Ambac (ABK), and instead plowed $250 million into Assured Guaranty shares at $21 and change. Since then, Assured Guaranty has been writing new business while Ambac and MBIA have largely been sidelined by investor concerns about their financial strength. But now, with Assured Guaranty stock fetching $10 and a downgrade possible there as well, it’s less clear that Ross backed the right horse.