Moody's cuts Ambac Financial

Moody's Investors Service said it downgraded Ambac Financial Group, Inc.'s senior debt rating to Aa3 from Aa2.

The outlook is negative.

The action concludes a review for downgrade that began on Jan. 16 and reflects Moody's assessment of Ambac's ongoing efforts to strengthen its capital position in light of its troubled mortgage and mortgage-related collateralized debt obligation exposures, the agency said, as well as the significant changes the company is implementing to reduce the volatility associated with its insured portfolio over time.

According to Moody's, Ambac's recently completed $1.5 billion capital raise was a critical factor leading to the confirmation of the Aaa insurance financial strength ratings at the company.

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