UPDATE 1-AMBAC spread widening gives it big Q3 net profit - News

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UPDATE 1-AMBAC spread widening gives it big Q3 net profit

By: AFX | 04 Nov 2009 | 09:04 AM ET

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NEW YORK, Nov 4 (Reuters) - Bond insurer Ambac Financial Group on Wednesday reported a huge third-quarter profit, almost entirely due to $2.13 billion in gains from credit derivatives triggered by the company's credit spread widening. Ambac reported a third-quarter profit of $2.19 billion, or $7.58 a share, compared with a loss of $2.4 billion, or $8.45 a share, in the same period a year earlier. Shares in the bond insurer soared in premarket trading to $1.40, up 26 percent. Ambac, like its larger rival MBIA Inc which reports third-quarter results next week, has struggled to write new business since losing its top-notch credit rating last year. The bond insurer in June delayed plans to launch a municipal bond arm called Everspan, after having difficulty raising money from outside investors to fund the unit. (Reporting by Elinor Comlay, editing by Gerald E. McCormick) Keywords: AMBAC/ (elinor.comlay@thomsonreuters.com; +1 646 223 6116) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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