Citigroup under pressure again; Ambac won’t split

Mar.04, 2008 in Market Outlook

Merrill trims Citi profit estimates

Merrill Lynch analyst Guy Moszkowski took a knife to Citigroup earnings
estimates, forecasting the bank will earn 24 cents for the year and lose $1.66 a
share during the first quarter, compared to a previous forecast for $2.74 per
share in annual earnings and 55 cents a share in first-quarter earnings.
Citigroup may report a $15 billion hit on its subprime/CDO exposure and another
$3 billion hit from commercial real estate, leverage lending and consumer lending
provisions. But he kept Citi’s rating at neutral, saying it trades near proforma
book value adjusted for the expected loss this quarter and recent capital
raising.

Ambac won’t split into two parts as it recapitalizes: report

Ambac Inc. (ABK), the New York bond insurer, won’t split its business in two as
it recapitalizes, the Financial Times reported insiders as saying. Ambac was
mulling the idea of separating its municipal-bond-insurance business and its
structured-finance division. A capital infusion into Ambac from Citigroup, UBS
(UBS) and other banks and investors may be announced as early as Wednesday,
people involved in the talks told the FT. Under the plan, Ambac would remain
unified and retain its AAA credit rating, the FT reported. See full story FT.com.

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