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Detail: Ambac Deal Has Backstop If Investors Walk Away - CNBC

Mar 6, 2008 Market Outlook

Ambac Deal Has Backstop If Investors Walk Away - CNBC

Last Update: 3/6/2008 11:39:28 AM

NEW YORK (Dow Jones)–Underwriters of Ambac Financial Group Inc.’s (ABK) plan to
raise $1.5 billion in capital have committed to stepping in and buying a certain
percentage of the shares in case demand is lacking, CNBC reported Thursday.

Without citing sources, the network’s Charlie Gasparino said that the
underwriters are claiming a a pre-existing core of demand for the deal already
exists from about four or five investors, who are building a book with other
investors.

Gasparino said private equity may get into the deal, as well, “meaning the size
of $1.5 billion could rise to as much as $2 billion when all is said and done.”

On Thursday, Ambac said it would try to raise the fresh capital and stop insuring
mortgage-backed debt to defend the key AAA rating at subsidiary Ambac Assurance.

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