Moody’s Investors Service said late Wednesday that it had placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody’s also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. The move comes on the heels of Ambac’s disclosure that it would seek to raise $1 billion in equity, while slashing its dividend in a move to preserve capital; Ambac also warned of massive losses for the fourth quarter, and said its CEO was stepping down. The possible downgrade of Ambac also put all Moody’s-rated securities wrapped by the bond guarantor — including CDO and RMBS issues — on review for a downgrade. The move to reassess Ambac comes just one month after Moody’s had previously affirmed the guarantor — and the rating agency suggested in its statement that further review of other monolines may be coming:

Jack Dorer, Managing Director, added, “The market stresses contributing to Ambac’s recent financial and organizational announcements are also evident at other financial guarantors, particularly those with significant mortgage and mortgage-related CDO exposures.” Moody’s will be evaluating, in the near term, the degree to which these issues — including the extent of customer and investor support — affect the ratings of other firms in the industry and communicate with the market as appropriate.

Standard & Poor’s on Wednesday also indicated that it is reassessing various bond guarantors, in light of its revised assumptions on RMBS performance. For more information, including a full list of impacted securities, visit http://www.moodys.com. Disclosure: At the time this post was published, the author held no positions in ABK.