Moody's keeps Ambac on review

Moody's Investors Service announced Friday that it has concluded its analysis of the residential mortgage and mortgage-related CDO exposures of Ambac Assurance Corp. and is continuing the review for possible downgrade that was begun on Jan. 16.

Based on an updated assessment of Ambac's mortgage risk, the agency believes that Ambac's capital exceeds the minimum Aaa standard but falls below the Aaa target level. Moody's is evaluating plans the company is pursuing to close the gap, including the certainty of those plans and the timeframe over which they would likely be realized. Ambac is actively pursuing capital strengthening activities that, if successful, are expected to result in the company meeting Moody's current estimate of the Aaa target level.

The agency said the continuing review will focus on the further refinement and execution of those capital plans, as well as on substantive changes that Ambac is implementing to its risk and operating strategies going forward.

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