NEW YORK (Bloomberg) – Ram Reinsurance Co. Ltd. said it is "disappointed" with the decision by Standard & Poor's (S&P) to cut its credit rating based on a slowdown in new business.

S&P reduced Bermuda-based Ram Re's financial strength rating two grades to A+ from AA on Wednesday, citing limited new business.

S&P also cut Channel Reinsurance Ltd. one grade to AA- from AA.

Ram Re, along with Assured Guaranty Ltd., offer reinsurance to financial guarantee companies. Channel Re, also based in Bermuda, provides reinsurance solely to MBIA Inc.

"We are disappointed by S&P's action, since S&P's review shows that our capital is above the level required to maintain a AA rating," Vernon Endo, Ram Re's CEO said in a statement today distributed on Business Wire.

The downgrades come as bond insurers are trying to restore confidence in the industry by setting up municipal bond-only insurance companies. Five of seven formerly AAA rated bond insurers were stripped of their top grades by S&P and Moody's Investors Service over the last year after reporting record losses on guarantees of securities backed by sub-prime mortgages.

New business for Ram Re has fallen off as "our continuing customers are reported to be under review by Moody's and our former customers have already been downgraded by both rating agencies", Mr. Endo said.

Most of Ram Re's new business has been with Assured Guaranty and Financial Security Assurance, a unit of Dexia, which both retain AAA credit ratings at Moody's and S&P. Moody's placed both ratings under review in July, reducing the volume of insurance the two companies are writing, Ram Re said in a regulatory filing.

Ambac Financial Group Inc. CEO Michael Callen told CNBC on Wednesday that credit rating companies should institute a moratorium on downgrades of financial firms such as bond insurance companies.

Moody's cut Ram Re three levels to A3 from Aa3 and downgraded Channel Re four levels to Baa1 from Aa3 in August.

Channel Re provides more than half of the $78 billion in reinsurance that MBIA has obtained on its portfolio, according to filings from the Armonk, New York-based bond insurer with the US Securities and Exchange Commission.

"S&P's downgrade of Channel Re to AA- has no impact on MBIA as the reinsurance credit we receive in S&P's capital model is unchanged," said Liz James, a spokeswoman for MBIA. "Channel's capitalisation remains well in excess of what is required for its rating and all of its claims-paying resources are dedicated to the business ceded to it by MBIA."