SAN FRANCISCO (MarketWatch) — Ambac Financial said on Wednesday that it has no
material exposure to securities backed by subprime second-lien mortgages and
subprime home equity lines of credit, two types of securities that are worrying
Moody’s Investors Service. The rating agency said yesterday that
bigger-than-expected losses on these securities may increase the capital that
bond insurers have to set aside to keep their AAA ratings. “Despite very
stressful loss estimates of our portfolio, we believe we have already exceeded
Moody’s stressed Aaa target as of April 30th, 2008 and we continue to build
excess capital,” Ambac said in a statement on Wednesday. Ambac shares fell 3% to
$3.88 during afternoon trading on Wednesday.
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