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Ambac posts $3.3 bln loss
Reuters Tuesday January 22 2008
By Dan Wilchins
NEW YORK, Jan 22 (Reuters) - Bond insurer Ambac Financial Group Inc on Tuesday reported a quarterly loss of $3.3 billion after recording massive credit derivative write-downs and setting aside more money for credit losses.
The $3.3 billion loss comes as the company faces serious questions about its future profitability. Ambac, the second-largest bond insurer in the world, lost a crucial top credit rating from Fitch for its main insurance unit on Friday. The company also scrapped plans to raise $1 billion of capital, citing market conditions.
More ratings cuts may be on the horizon for Ambac's main units. Moody's Investors Service and Standard & Poor's are also considering cutting Ambac Assurance Corp's top debt ratings.
The bond insurer's difficulties have come after Ambac used credit derivatives to guarantee a series of portfolios of asset-backed securities. Those securities were linked to subprime mortgages, and have weakened dramatically in the widening credit crisis.
Ambac said in its earnings statement on Tuesday that it hopes to regain its top rating from Fitch, and is looking at strategic alternatives from "a number of potential parties."
Ambac wrote down $5.2 billion of credit derivatives, and set aside $208.5 million for losses.
On a per-share basis, Ambac's fourth-quarter loss was $31.85.
In the year ago quarter it earned $202.7 million, or $1.88 a share. (Reporting by Dan Wilchins and Christian Plumb; editing by John Wallace and Dave Zimmerman)
http://www.guardian.co.uk/feedarticle?id=7245836
Reuters Tuesday January 22 2008
By Dan Wilchins
NEW YORK, Jan 22 (Reuters) - Bond insurer Ambac Financial Group Inc on Tuesday reported a quarterly loss of $3.3 billion after recording massive credit derivative write-downs and setting aside more money for credit losses.
The $3.3 billion loss comes as the company faces serious questions about its future profitability. Ambac, the second-largest bond insurer in the world, lost a crucial top credit rating from Fitch for its main insurance unit on Friday. The company also scrapped plans to raise $1 billion of capital, citing market conditions.
More ratings cuts may be on the horizon for Ambac's main units. Moody's Investors Service and Standard & Poor's are also considering cutting Ambac Assurance Corp's top debt ratings.
The bond insurer's difficulties have come after Ambac used credit derivatives to guarantee a series of portfolios of asset-backed securities. Those securities were linked to subprime mortgages, and have weakened dramatically in the widening credit crisis.
Ambac said in its earnings statement on Tuesday that it hopes to regain its top rating from Fitch, and is looking at strategic alternatives from "a number of potential parties."
Ambac wrote down $5.2 billion of credit derivatives, and set aside $208.5 million for losses.
On a per-share basis, Ambac's fourth-quarter loss was $31.85.
In the year ago quarter it earned $202.7 million, or $1.88 a share. (Reporting by Dan Wilchins and Christian Plumb; editing by John Wallace and Dave Zimmerman)
http://www.guardian.co.uk/feedarticle?id=7245836
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