Moody's drops Ambac

Moody's Investors Service said it has downgraded to Ba3 from Baa1 the insurance financial strength ratings of Ambac Assurance Corp. and Ambac Assurance UK Ltd.

In the same rating action, Moody's said it also downgraded the senior debt of Ambac Financial Group, Inc. to Caa1 from Ba1.

The agency said that the rating action concludes a review for possible downgrade that was initiated on March 3.

The outlook is developing.

Moody's noted that the downgrade of Ambac's ratings primarily reflects weakened risk adjusted capitalization, as Moody's loss estimates on RMBS securities have increased significantly.

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