In the wake of Moody's announcement late Wednesday that it would reassess the ratings of Ambac Assurance Corp., the bond insurer released a press statement today that said its recently-announced plan to strengthen capital may not be enough:
In view of the uncertainty generated by Moody's surprising announcement, Ambac is assessing the impact of this action on the Company's previously announced capital plan.
Shares of Ambac have been punished in early morning trading -- again -- and are down more than 50 percent to $6.15 in heavy selling, as of when this post was originally published. I'm fairly confident I don't need to explain what it would mean to the mortgage banking industry if a AAA-rated bond guarantor were to see its ratings dropped. (H/T: Calculated Risk) Disclosure: The author held no positions in ABK when this post was originally published.