Three major rating agencies have retained Ambac's “triple-A”rating and removed the guarantee insurer from ratings watch afterthe mortgage insurer's announced plan to raise $1.5 billion.

Moody's Investors Service and Standard & Poor's affirmedAmbac's financial strength rating yesterday and Fitch did the same.All three said the outlook is negative reflecting the volatility ofthe bond markets.

Moody's rating is “Aaa” and S&P's is “triple-A.”

In a statement Michael Callen, chairman and chief executiveofficer of New York-based Ambac, said: “The successful completionof the capital raise was a very important component of the ratinganalysis. We want to thank all the rating agencies for their hardwork in this process.”

The rating agencies threatened to downgrade the ratings ofAmbac, MBIA and other guarantee insurers after they revealedsignificant exposure to mortgage securities affected by thesubprime mortgage defaults.

Agencies feared the insurers did not have the reserves to coverlosses. Insurers argued their reserves and long-term pay-out planswould cover the risk, but the threat of the rating's downgradeforced the carriers to raise capital to cover those potentiallosses.

Loss of the “triple-A” rating would jeopardize the writing ofmunicipal bonds that require that rating from underwriters.