Standard & Poor's yesterday moved the AAA financial strength rating of bond insurer Financial Security Assurance Inc. to CreditWatch negative, while three European governments continued to work on plans to strengthen FSA's parent Dexia SA.

The action on FSA follows Tuesday's downgrade of Dexia's core units to A-plus from AA-minus. Last week, the governments of Belgium, France, and Luxembourg - along with institutional investors - helped prop up Dexia with a capital infusion $9.2 billion, and the economy ministers of those countries planned to meet last night to discuss further support, according to news reports.

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