Fitch Ratings downgraded Financial Guaranty Insurance Co. to AA from AAA yesterday, saying the bond insurer has failed to address the capital shortfall it needed to maintain is vaunted triple-A rating. FGIC remains on watch for further downgrades.

On Dec. 17, Fitch placed FGIC on negative watch, giving the financial guarantor four to six weeks to address a capital shortfall of more than $1 billion. The six weeks ended Monday without a public word from FGIC, and while Fitch managing director Tom Abruzzo said it was not a strict deadline, the rating agency felt it could wait no longer.

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