Ambac Cuts Dividend, Plans to Raise $1 Billion

Hard-hit bond insurer Ambac Financial Wednesday slashed its quarterly dividend, announced plans to raise $1 billion of new capital and named an interim chief executive as it scrambles to maintain a triple-A credit rating.

Ambac said it will issue at least $1 billion of stock and equity-linked securities. The balance sheet strengthening plan may also include additional capital from reinsurance or issuance of new debt securities.

New York-based Ambac also will cut its quarterly dividend by two-thirds, to 7 cents a share, and named Michael Callen as chairman and interim chief executive. Callen succeeds Robert Genader, who is retiring.