US: Credit Market

Ambac Says Has $15 Billion to Pay Claims


Ambac Financial Group moving to quell market concerns about its liquidity and ratings, said Friday that recent efforts to raise capital have given it over $15 billion in "claims paying resources."

Ambac , in a letter from its chairman and chief executive, Michael Callen, said it believes its financial position is "sufficient" to retain its triple-A ratings from Moody's and Standard & Poor's, which are viewed as essential to the company's survival.

Callen said in the letter to shareholders and policyholders the company "will continue to insure" student loans, utility bond issues and certain other structured bond issues, along with hospitals, roads, schools and financing for other issues.

It said it is undertaking a review of all its businesses.

"We remain confident that Ambac will weather the storm," Callen said. Callen said the company "never considered a bailout."

Ambac, one of the largest U.S. corporate and municipal bond insurers, said on March 12 that Moody's and S&P affirmed their AAA ratings for its bond insurance arm after it raised $1.5 billion in new capital.