The prospects for the existing bond insurers took another hit Friday, with one knocked below triple-A, another handed an ultimatum, and all of them confronted by the prospect of more competition.

Fitch Ratings sent the insurer financial strength rating for MBIA Insurance Corp. to AA, and insurance regulators threatened further action against Financial Guaranty Insurance Co. if a plan to raise new capital was not finalized in the next month. New York insurance superintendent Eric Dinallo said in an interview with the Financial Times that he was working with a number of investment banks to form a triple-A rated bond insurance subsidiary.

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