S&P downgrades Ambac, MBIA

Standard & Poor's said it lowered ratings on Ambac Financial Group to A from AA and on MBIA Inc. A- from AA- and placed them on CreditWatch with negative implications.

The downgrades reflect the agency's belief that these companies will face diminished public finance and structured finance new business flow and declining financial flexibility, according to S&P.

Continuing deterioration in the U.S. residential mortgage sector and related collateralized debt obligation structures would place increasing pressure on capital adequacy, the agency noted.

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