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Ambac Financial lost nearly half of its market value on Wednesday as the bond insurer warned that potential losses related to mortgage-backed securities could reach more than $3bn, vastly more than had been anticipated. Ambac’s Q1 net loss of $1.7bn – against a net income of $213m a year ago - raises fresh questions about its ability to retain its crucial triple-A credit ratings amid concerns that ratings agencies may require it to raise more capital. Ambac shares closed down nearly 43% at $3.46, their lowest level ever. MBIA, the biggest bond insurer, was also hit, falling 33% to $8.91. Lex says that buying into Ambac now would give plenty of scope for more pain.