Octave Specialty Group Inc (OSG)

[Cubanwinner]

Ambac Financial Swings to 3rd-Quarter Profit on Lower RMBS Losses
By Melodie Warner

Ambac Financial Group Inc. (ABKFQ) swung to a third-quarter profit as lower estimated losses for residential mortgage backed securities helped to offset a decline in net investment income.
Originally an insurer of municipal bonds, Ambac sold guarantees on billions of dollars of mortgage-backed securities and collateralized debt obligations. When the housing meltdown hit, many of these securities turned toxic, leaving Ambac with heavy losses.
Ambac's reorganization plan won court approval in March, but the company still doesn't know when it will be able to emerge from bankruptcy.
Ambac reported a profit of $157.5 million, or 52 cents a share[i], compared with a loss of $75.5 million, or 25 cents a share, a year earlier.
Net premiums earned rose 11% to $113.1 million, while net investment income fell 7.3% to $84.1 million.
Losses and loss expenses were a net benefit of $18.7 million, reflecting lower estimated losses for first-lien and second-lien residential mortgage-backed securities. Last year's losses and loss expenses were a net benefit of $60.2 million.
Shares were recently trading 3.2% lower at two cents. The stock is down 7% so far this year.

Write to Melodie Warner at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires
November 14, 2012 09:53 ET (14:53 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.DN201211140095112012-11-14 14:53:00.0005EQ2OL29UIVTV139VUO34P347KDJNF