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Company: Ambac Financial Group (ABK)
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57%
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7 votes

  Ambac negotiating to prevent more downgrades - more collateral requirements

Top Contributor: Jack Bass | Created when NYSE:ABK was $1.39 | Edit | History

Ambac's main insurance unit lost its top credit ratings last month, which forced the insurer to post $506 million of additional collateral and end $270 million of investment agreements.

If the insurance unit is downgraded more than two steps by Standard & Poor's or more than one step by Moody's, Ambac would need at least $1 billion to post additional collateral and close out obligations, the company said. It would not have enough assets in its investment agreement asset portfolio to cover that $1 billion

Ambac said it does not expect these downgrades, but said it is talking to the Wisconsin insurance regulator about how to use assets from its regulated subsidiary to pay back obligations if it is downgraded below these levels. Ambac believes regulators will approve its plans.

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50%
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2 votes

  "Business model based on ""risk-free"" fiction"

Created when NYSE:ABK was $8.70 | Edit | History

The era of 'risk free' profits through financial engineering is coming to an end. Risk is now being recognized, while it was hidden in long documents earlier. Even if Ambac pulls through, the business is on it's last legs.

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50%
agree
2 votes

  Business model based on ""risk-free"" fiction

Created when NYSE:ABK was $8.70 | Edit | History

The era of 'risk free' profits through financial engineering is coming to an end. Risk is now being recognized, while it was hidden in long documents earlier. Even if Ambac pulls through, the business is on it's last legs.

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33%
agree
3 votes

  CFO Sean Leonard Resignation may signal further trouble at ABK

Top Contributor: Thomas Shyr | Created when NYSE:ABK was $0.87 | Edit | History

Ambac CFO Sean Leonard suddenly resigned late November to "to pursue other interests", potentially signaling deeper trouble and turmoil within the company. The fact that the CFO doesn't want to stick around to see what happens should be troubling to investors.

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33%
agree
3 votes

  ABK posts fourth quarter loss

Top Contributor: Bret Holmes | Created when NYSE:ABK was $0.48 | Edit | History

Ambac Financial Group Inc. (ABK) posted a $2.34 billion, or $8.14 a share, fourth-quarter loss. The bond insurer set nearly $1 billion aside for losses tied to residential mortgage debt, Reuters reported.

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45%
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11 votes

  Losing AAA rating spells death

Top Contributor: Bret Holmes | Created when NYSE:ABK was $8.70 | Edit | History

Once Ambac loses its AAA raing, its business is dead. Why would I insure a BBB bond with an insurer that has just an A rating? Moody’s Investors Service on Friday downgraded the debt rating of key bond insurers MBIA Inc. (MBI) and Ambac Financial Group Inc. (ABK), increasing expectations that more write-downs are in the offing for the U.S. financial-services sector, which has already written off nearly $400 billion in losses.

Moody’s Investors Service, subsidiary of Moody’s Corp. (MCO), downgraded MBIA to A2 from Aaa, and Ambac from Aaa to Aa. The downgrade caused MBIA shares to shed more than 13% of their value, with an 86-cent decline to close at $5.59 on Friday. Ambac shares fared a bit better, gaining 2 cents to close at $2.05.

Moody’s downgrades follow similar reductions from Standard & Poor’s and Fitch Ratings Inc.

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40%
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5 votes

  The credit crunch will destroy Ambac.

Created when NYSE:ABK was $8.70 | Edit | History

The credit crunch will destroy Ambac.

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