S&P affirms Ambac Assurance

Standard & Poor's said it removed from CreditWatch with negative implications the AAA issuer credit ratings of Ambac Assurance Corp. and the AA issuer credit rating of holding company Ambac Financial Group Inc.

The outlook is negative.

The actions follow Ambac Financial's success in raising $1.5 billion in capital, consisting of $1.25 billion in common equity and $250 million of equity units.

Proceeds will help boost increase Ambac Assurance's capital position.

S&P said raising capital is a component of the insurance company's strategy to manage its capital position relative to projected stress case losses.

The negative outlook reflects the potential for further mortgage market deterioration, which could challenge bond insurers' ability to gauge ongoing capital needs accurately in the near term, according to the agency.

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