Insurer crippled by US mortgage scandal downgraded
Standard & Poor's has cut its ratings on monoline bond insurer Ambac to BBB, saying the insurer has "negligible" prospects for writing new business and is effectively in run-off, Reuters reports.
S&P cut Ambac Assurance Corp three notches to BBB, the second lowest investment grade.
Ambac Financial's rating was also cut three notches to BB, two steps below investment grade, from BBB.
"The downgrade stems from our view that Ambac is effectively in run-off," S&P said in a statement.
"Loss reserving increases have depleted surplus, boosting the likelihood of regulatory intervention, and we believe Ambac's prospects for writing new business are negligible," S&P added.
Ambac Assurance has been hit by its exposures to residential mortgage-backed debt.
S&P warned it could lower the rating again.
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