NEW YORK (Bloomberg) — MBIA Inc. and Ambac Financial Group Inc., the world's largest bond insurers, had their AAA insurance financial strength rankings cut by Standard & Poor's.

The ratings were cut two levels to AA, New York-based S&P said in a statement yesterday. S&P said it would keep the ratings under review pending "clarification of ultimate potential losses as well as future business prospects, the outcome of strategic business decisions, and potential regulatory developments." More than $1 trillion of municipal bonds and corporate securities the companies guaranteed depend on those top ratings, as does the capacity for New York-based Ambac and Armonk, New York-based MBIA to generate new business. MBIA chief executive officer Jay Brown and Ambac interim CEO Michael Callen were hired last year largely to help the bond insurers maintain their top ratings in the face of potential losses on collateralized debt obligations and other faltering securities they guaranteed.

"The rating actions on the companies reflect our belief that these entities will face diminished public finance and structured finance new business flow and declining financial flexibility," S&P said in the statement.

The cuts follow Moody's announcement on Wednesday that it had placed the two companies' ratings under review for a second time this year. MBIA and Ambac executives said they had no plans to try to raise additional capital to salvage the top ratings. The world's largest bond insurers raised $4.1 billion in the past six months through the sale of debt and equity in a bid to keep their top ratings.