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Ambac Deal Hits Snag Regarding Raters’ Capital Demands -CNBC

Last Update: 2/29/2008 8:03:21 AM

NEW YORK (Dow Jones)–Ambac Financial Group Inc. (ABK) hit a “significant snag”
Wednesday in its restructuring effort, CNBC’s Charlie Gasparino reported Friday.

At issue is a disparity between how much money a bank consortium is willing to
invest in the troubled bond insurer and how much capital cushion ratings agencies
require to maintain the company’s rating given a structure that would separate
the municipal bond insurance from the collateralized debt obligations.

The consortium banks and Ambac are devising a new proposal to present to the
ratings agencies, Gasparino said, “citing people close to the deal.”

He added that talks are ongoing and the deal is not dead.

-By Rebecca Townsend, Dow Jones Newswires; 201-938-5174,
rebecca.townsend@dowjones.com

(END) Dow Jones Newswires

February 29, 2008 08:03 ET (13:03 GMT)

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