Moody’s Investors Service Monday night cut Ambac Assurance Corp.’s rating to junk status, downgrading the bond insurer to 'Ba3' from 'Baa1'. The outlook is developing.

The rating agency cited Ambac’s “weakened risk-adjusted capitalization,” pointing out its increased loss estimates on residential mortgage-backed securities. The action concludes a review for downgrade Moody’s announced on March 3.

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