- Dubai Struggles to Ease Debt Fears; Investors Rattled
- US Companies Already Moving on Curbing Emissions
- Fannie Mae to Tighten Lending Standards: Report
- Investing in Good Karma – and Making a Profit
- Retailers Should Believe in Christmas Miracles
- Wal-Mart Price Pressure Hurts China Workers: Report
- Bankruptcies Jump, Hitting Highest Level in Four Years
- Steepest Black Friday Discounts, Revealed
- Where Do Pardoned Turkeys Go?
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
MOST SHARED
- Kuoni CEO Sees Recovery in Travel Sector
- Gold Retreats from Record High as Dollar Rebounds
- Dubai Struggles to Ease Debt Fears; Investors Rattled
- Chinese Overcapacity is Worsening, EU Chamber Warns
- Wal-Mart Price Pressure Hurts China Workers: Report
- Fannie Mae to Tighten Lending Standards: Report
- Hyundai-Kia Targets Rapid China Growth in 2010
- China Unveils Carbon Target Ahead of Copenhagen
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
Text Size 
A group of banks planning a rescue of Ambac Financial Group is willing to consider leaving the bond insurer with just a single "triple-A" credit rating, according to people involved in the deal.
In the past, the bank consortium had wanted two triple-A ratings to underwrite new business.
 |
Ambac is looking to raise capital as its expected losses have mounted after insuring repackaged subprime mortgage bonds and other risky assets.
The banks working on the Ambac bailout met this weekend with New York State Insurance Commissioner Eric Dinallo to come up with alternative plan that pasts muster with the rating agencies.
The raters said the banks needed more capital for a bailout that split the business of cdo insurance from municipals. Now the banks seem to be favoring a unified approach.
As first reported by CNBC, the bailout effort ran into trouble last week when the bond rating agencies said they wanted to see more capital injected into the bond insurer. A consortium of banks had already agreed to come up with $2.5 billion in capital.
Like other bond insurers, Ambac [ABK
Loading...
()
] is in danger of losing its critical triple A debt rating unless it raises enough capital to offset billions of dollars in losses from risky subprime related debt.
Early Friday afternoon, Moody's said that Ambac will likely lose its triple A rating if a bailout plan isn't worked out. Standard & Poor's made similiar comments earlier in the week.
The banks are now trying to come up with a different type of structure for the bailout that will satisfy the rating agencies.
People close to the proposed bailout remain confident a deal will still happen, possibily by sometime next week. Banks and the rating agencies are aware that if Ambac collapses, it would trigger another wave of panic in debt markets and send the stock market reeling.
If the new structure is approved by the rating agencies, a deal could be put into place by early this week, sources said.
Print
Email
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Ever wished your cab driver would stop nattering and just get to where you're going? Well that moment is near(er).
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
Data is a real-time snapshot *Data is delayed at least 15 minutes