NEW YORK (Bloomberg) Bermuda-based Assured Guaranty Ltd, the bond insurer cut two steps by Standard & Poor’ yesterday, jumped the most in more than seven months after the ratings firm kept its grades in the same tier and said its businesses maintained “strong” capital.Assured rose $1.29, or 13.3 percent, to $10.99 in New York trading. It earlier climbed as much as 20 percent, the biggest increase since April 15.S&P lowered the Hamilton, Bermuda-based company’s insurance units, Assured Guaranty Municipal Corp. and Assured Guaranty Corp., to AA- from AA+, according to yesterday’s statement. The insurers don’t hold enough capital under new restrictions to mitigate so-called largest obligor concentrations, S&P said.“We view the rating action as a significant positive, especially given market fears of a downgrade to the A category,” Piper Jaffray Cos analysts led by Michael Grasher in Chicago wrote in a note to clients today. The ratings action removes “a significant overhang on the stock,” the analysts said, “while clearing the way for new production in 2012.”While S&P said Assured and its units were “maintaining strong capital,” they didn’t have enough to avoid the two-step downgrade because of new tests the ratings firm was applying to bond insurers to guard against defaults by large borrowers. S&P said its outlook on the insurer was “stable”.S&P overhauled the way it grades financial guarantors after the two biggest, MBIA Inc and Ambac Financial Group Inc, and most of the rest of the industry lost their top AAA ratings in 2008 and were cut to below investment-grade within a year. Wisconsin regulators seized part of Ambac’s business last year, while MBIA split its insurance units after losses from securities linked to subprime mortgages.Assured, the only bond insurer still writing new policies, is still graded five steps above MBIA’s municipal insurer, National Public Finance Guarantee Corp, which had its BBB rating affirmed yesterday by S&P.MBIA shares fell 1.7 percent to $9.54 after a 19 percent jump yesterday on the S&P statement relating to its grade.