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Analyst Blog Ambac Unit Faces Downgrades By: Zacks Equity Research March 26, 2010 | Comments: 0 Recommended this article (1) ABK Print Share Yesterday, the rating agency Standard & Poor's slashed the rating of Ambac Assurance (“AAC”), a unit of Ambac Financial Group (ABK - Analyst Report), to “R” from “CC.” This move was fueled by the announcement of the Officer of Commissioner of Insurance (OCI) regarding the rehabilitation of AAC liabilities. The OCI yesterday ordered AAC to create a segregated fund, which would contain $35 billion of the company’s liabilities on policies related to residential mortgage-backed securities and $29 billion on other credit derivatives and structured finance products. No claims will be made with respect to any policies under the segregated account until the rehabilitation plan is approved by the court, which might take six months. A moratorium on claims payment has been put to conserve Ambac’s reserves. The regulatory intervention is meant to protect investors of municipal bond issues. Ambac Assurance has been under constant vigilance by the regulators with regard to capital and surplus targets. It has been hit by losses on investments as well as the insurance of structured financial products, reducing its claims paying capability. Recently, its estimation of future loss impairments has also increased significantly. Ambac has been in trouble for quite some time. The company has suffered multiple rating downgrades since June 2008. The financial strength rating downgrades have adversely impacted Ambac’s ability to generate new business and have negatively affected its operating and financial results. Ambac CFO Sean Leonard resigned last November after the company was found guilty of misstating financial statements to hide the capital shortfall in order to avoid seizure by the regulators. The rating of “R” is considered to be junk and below investment status and indicates the regulatory supervision on the company. http://www.zacks.com/stock/news/32207/Ambac+Unit+Faces+Downg… |
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| aus der Diskussion: | AMBAC REBOUND- Ratings, Analysen, Charts, News |
| Autor (Datum des Eintrages): | Aktientitan (28.03.10 09:09:39) |
| Beitrag: | 47 von 133 (ID:39230709) |
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