Moody’s Investors Service Tuesday night downgraded bond insurer CIFG Assurance NA  to 'B3' from 'Ba2', keeping its ratings review with direction uncertain less than a week after Assured Guaranty Corp. agreed to reinsure $13 billion of CIFG’s U.S. public finance book.

Increased expectations of mortgage-related losses and CIFG’s efforts to commute certain exposures led to the action, Moody’s said. In addition to the reinsurance deal, CIFG has also reached an agreement to commute $12 billion in structured finance exposures in a deal that has yet to close.

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