Updated from 4:41 p.m. ESTEmbattled financial guarantors MBIA ( MBI) and Ambac Financial ( ABK) will retain their coveted triple-A rating -- at least for now, says Standard & Poor's. On Monday, S&P issued a statement saying that Armonk, N.Y.-based MBIA is no longer on review for downgrade. Rival guarantor Ambac Financial's ( ABK) triple-A ratings was reaffirmed by the agency. Both firms are being placed on negative watch, but downgrades at this point no longer appear imminent. At the heart of the ratings agency's brightening forecast is the improving financial picture of both companies. MBIA, which raised some $2.5 billion from private equity firm Warburg Pincus and public investors, further enhanced its capital position after S&P's announcement on Monday by eliminating its quarterly dividend. The move will save some $174 million, the amount it paid in dividends in 2007. Ambac is expected to benefit from a plan that is presently being arranged by a consortium of lenders to provide fresh liquidity. A rescue for Ambac by a bank group that includes Citigroup ( C) and UBS ( UBS) could provide it between $2 billion to $3 billion in a plan that would see it break itself into two halves, sources tell TheStreet.com. One would house policies for conservative debt, including municipal bonds; and another that backstops losses on structured debt, which are dropping in value due to the slumping mortgage market. S&P's rating "reflects our assessment of the scope of Ambac's capital-raising plans and the company's ability to implement those plans," the agency's report reads. "We left the ratings on credit watch with negative implications to reflect uncertainty surrounding the risk profile and capitalization plans for the reported new corporate structure being contemplated by the holding company." After S&P announced its action, MBIA said that it will eliminate its dividend. The company had cut its dividend to 13 cents last month, but has not yet paid out any dividends at that rate. "MBIA will continue to take reasonable and prudent actions such as this dividend elimination in an effort to retain and strengthen our Triple-A ratings," said CEO Jay Brown, who returned to the company last week. "As a very large individual shareholder of MBIA, I'm the first one to feel the pinch from this action. But I think this, coupled with my recent commitment to buy a substantial number of additional shares, demonstrates my absolute commitment to be aligned with our owners and to maximize long-term value." Calls to media representatives at Ambac, MBIA and S&P were not immediately returned. The ratings moves come after months of handwringing over the fate of the imperiled bond insurers. Monolines have been under pressure because rating agencies argue that the firms need billions more in capital to protect against losses in risky businesses that they began to provide guarantees on in the late 1990s and early 2000s. MBIA, however, still faces a downgrade by Moody's Investors Service. That hit could be leveled as soon as this week, but S&P's affirmation could mean that Moody's follows suit. High credit ratings are critical for bond insurers, which provide backstops and credit enhancements on securities from municipal bonds to funkier mortgage paper. Although S&P appeared sufficiently content with MBIA's and Ambac's capital plans, the lack of action at another bond insurer, Financial Guaranty Insurance Co., led it to downgrade that firm to single-A from double-A. FGIC remains on watch for further action S&P also reaffirmed the triple-A ratings of guarantor of CIFG Guaranty, CIFG Europe and CIFG Assurance North America Inc. But the agency downgraded guarantor XL Capital Assurance Inc. and XL Financial Assurance Ltd. to 'A-' from triple-A citing execution and timing risk on its plan to raise capital.