Credit market sentiment deteriorated on Friday after MBIA’s credit rating was cut from triple A to single A in one fell swoop, highlighting the uncertainty that continues to hang over the bond insurance sector.

The move by Moody’s Investors Service late on Thursday was accompanied by a downgrade of bond insurer Ambac, with its ratings cut to double A from triple A. Moody’s cited the lack of financial flexibility and the bond insurers’ inability to write new business, and maintained a negative outlook on the ratings.