MBIA and Ambac Financial surged after Standard & Poor's said it is no longer thinking of downgrading the two bond insurers' debt. S&P said the two firms had taken "positive steps" to save themselves. Bloomberg : MBIA Insurance's capital levels remain ``well above the level required for a AA rating,'' S&P said. Ambac Assurance's efforts to cancel protection on mortgage-linked debt also ``are starting to bear fruit,'' the ratings company said. The outlook for the ratings, which were cut from AAA in June, is negative. Both companies used to enjoy AAA ratings, the highest investment rating but were downgraded as losses from CDOs and other mortgage exposure grew and capital shrank. That S&P doesn't think it needs to downgrade them further obviously comes as a relief. But given the rating agencies' recent track record, it hardly means much. ...
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