Bond insurer Ambac Financial -- whose guarantee is behind billions of dollars in asset-backed bonds collateralized by subprime loans -- saw its stock plunge 60% in trading early Thursday after Moody's Investor Service said it is reviewing the company for a possible downgrade. The news comes on the heels of Ambac's recent announcement that it has an estimated $5.5 billion pretax loss on credit derivatives for the fourth quarter. In trading, Ambac's shares were down 62% to just $5 a share. In a statement regarding the possible downgrade, Ambac called it a "surprising" move on Moody's part, adding that "Management remains confident in Ambac's insured portfolio and will communicate further on these matters."
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