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Ambac shares hit record low after new disclosure

Bond insurer reports CDO write-downs, claim payments from April

By Alistair Barr, MarketWatch

Last Update: 2:56 PM ET May 28, 2008

SAN FRANCISCO (MarketWatch) — Ambac Financial shares fell to a record low on
Wednesday after the bond insurer disclosed new information about its operations
in April.

Ambac reported $228 million of write-downs during April on derivative-based
guarantees the company sold on complex mortgage-related securities known as
collateralized debt obligations, or CDOs.

Ambac (ABK) also said it paid $16.2 million in claims during April, after
reinsurance.

Shares of the bond insurer fell 7.7% to $2.98 during afternoon trading. Earlier
in the day, the stock dropped to a record low of $2.88. The company has lost 97%
of its market value during the past year as investors focused on bond insurers’
exposure to the mortgage meltdown.

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