Moody’s still reviewing Ambac for possible downgrade

Feb.29, 2008 in Market Outlook

SAN FRANCISCO (MarketWatch) — Moody’s Investors Service said on Friday that it’s
still reviewing Ambac Financial for a possible downgrade because the bond insurer
currently doesn’t have enough capital to keep its Aaa rating. “Based on an
updated assessment of Ambac’s mortgage risk, Moody’s believes that Ambac’s
capital exceeds the minimum Aaa standard but falls below the Aaa target level,”
the agency said in a statement. However, Ambac is trying to raise new capital and
Moody’s was supportive of that effort. “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. “Moody’s continuing review will focus on both the further refinement of,
and execution of, those capital plans.” Ambac shares fell 2% to $11.52 during
afternoon trading on Friday.