SAN FRANCISCO (Thomson Financial) - Ambac Financial Group said late Friday it is cutting it's quarterly dividend to a penny from 7 cents and suspending all new structured finance business for the
next six months.
Suspending structured finance writings for six months is expected to free up roughly $600 million in capital, the bond insurer said.
In conjunction with this suspension, we will discontinue writing business in a number of sectors in the global structured finance markets where the risk dynamics are not aligned with our vision of the future of Ambac,' said Michael Callen, chairman and chief executive, in a statement. 'Furthermore, we are discontinuing writing new financial services businesses, including investment agreements and swaps, except where we are hedging existing exposures; and we will no longer execute financial guarantees using credit default swaps.'
Callen also commented on the decision by Moody's to continue its review of Ambac's ratings.
'We are pleased with this acknowledgment by Moody's of the strength of our capital position and our franchise.'
Callen added that 'we are actively pursuing a plan to further augment our capital resources in order to achieve Moody's' Aaa target.'
Shares of Ambac closed at $11.14. Gabriel Madway gm COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Suspending structured finance writings for six months is expected to free up roughly $600 million in capital, the bond insurer said.
In conjunction with this suspension, we will discontinue writing business in a number of sectors in the global structured finance markets where the risk dynamics are not aligned with our vision of the future of Ambac,' said Michael Callen, chairman and chief executive, in a statement. 'Furthermore, we are discontinuing writing new financial services businesses, including investment agreements and swaps, except where we are hedging existing exposures; and we will no longer execute financial guarantees using credit default swaps.'
Callen also commented on the decision by Moody's to continue its review of Ambac's ratings.
'We are pleased with this acknowledgment by Moody's of the strength of our capital position and our franchise.'
Callen added that 'we are actively pursuing a plan to further augment our capital resources in order to achieve Moody's' Aaa target.'
Shares of Ambac closed at $11.14. Gabriel Madway gm COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2008 AFX News
