Moody's Investors Service signaled a grim ending to a long-running credit market debate Wednesday, warning it will likely strip MBIA and Ambac Financial Group of their key AAA insurer ratings.

Moody's said it will most likely downgrade the ratings of each company's insurance units by one to three notches, leaving them in the Aa range. Moody's also said it's possible MBIA's insurer ratings could be dropped at least four notches into the single-A category.