Insurance companies that guarantee Puerto Rico municipal debtfiled a lawsuit challenging the commonwealth's decision to divertrevenue designated for some bonds to pay other creditors.

Ambac Financial Group Inc. and Assured Guaranty Ltd. said theclawback of revenue pledged to bond issues violates the U.S.Constitution by interfering with debt-holders' contractual rights.The suit filed in U.S. District Court in Puerto Rico seeks to havethe clawback declared unlawful and asks the court to issue aninjunction against implementation, according to a statement.

“This may well just be the beginning,” Mark Palmer, amanaging director at BTIG LLC who analyzes Puerto Rico andmunicipal bond insurers, said Friday. Bond insurers and investors“are going to use every means at their disposal to hold Puerto Ricoto the letter of the law.”