Standard & Poor's earlier this week corrected to A-plus from A the ratings on 1,096 issues guaranteed by Ambac Assurance Corp. that it had inadvertently lowered.

The agency Nov. 19 downgraded Ambac to A from AA after parent Ambac Financial Group Inc. earlier in the month reported a $2.431 billion net loss. Standard & Poor's lowered the 1,096 issues to the A level even though their underlying rating was higher.

Ambac last week announced that it had paid counterparties $1 billion to commute four transactions representing $3.5 billion of notionalized collateralized-debt obligation exposure. As a result of the deals, Ambac said it expected "to record positive adjustments to its aggregate mark-to-market and impairment reserves" and improve its rating agency capital position.

However, Standard & Poor's last week said the deals would not affecct Ambac's rating. The agency said it had already factored the potential completion of these deals into its rating.

"In our opinion, while the company benefits from removing the potential for further adverse loss development relating to these transactions, the near-term effect on the company's capital adequacy is not material," Standard & Poor's said in a statement.


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