Moody's Investors Service downgraded the insurance financial strength ratings of CIFG Guaranty, CIFG Europe, and CIFG Assurance North America, collectively known as CIFG, to 'Ba2' from 'A1'. The rating agency kept the ratings under review with direction uncertain.

Moody's said that the rating actions reflect the high probability that, without material developments, the insurance firm will likely fail the minimum regulatory capital requirements in New York and Bermuda. This is a result of the expected significant rise in modeled loss reserves on ABS CDOs.

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