This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Ambac Financial Group, Inc. Announces Second Quarter 2010 Results

The financial guarantee non-VIE investment portfolio had a fair value of $5.3 billion (amortized cost of $5.0 billion) as of June 30, 2010. The portfolio consists of high quality municipal bonds, corporate bonds, Treasuries, U.S. Agencies and Agency MBS as well as mortgage and asset-backed securities.

Long-term debt increased during the quarter from $1,633.4 million at March 31, 2010 to $1,815.0 million due to the issuance of $2.0 billion of surplus notes related to the CDO of ABS commutation which have a carrying value of $200.1 million at June 30, 2010. The surplus notes will accrete to face value over the 10-year life of the bonds. This increase was partially offset by decreases in Ambac’s debt resulting from debt for equity exchanges transacted with certain holders of Ambac’s 9⅜% debentures due in August 2011. During the second quarter 2010, Ambac issued an aggregate of 13,638,482 shares of its common stock in exchange for $20.3 million in aggregate principal amount of its 9⅜% debentures and recognized a gain on the extinguishment of those debentures amounting to $10.7 million during the period.

Cash, short-term securities and bonds at the holding company amounted to $76.0 million as of June 30, 2010. Ambac’s annual debt service costs amount to approximately $87.0 million. As a result of the recent actions taken by OCI (as discussed in our press release dated March 25, 2010 and in our 10-K filed with Securities Exchange Commission on April 9, 2010), management believes that it is highly unlikely that AAC will be able to make dividend payments to Ambac for the foreseeable future.

Overview of AAC Statutory Results

As of June 30, 2010, AAC reported statutory capital and surplus of approximately $1.5 billion, up from $160 million as of March 31, 2010. AAC’s statutory financial statements include the results of AAC’s general account, the Segregated Account which was formed on March 24, 2010, Ambac Assurance UK Ltd. and Everspan Financial Guarantee Corporation. Statutory capital and surplus was positively impacted by the various credit derivative commutations during the period, primarily the June 7, 2010 CDO of ABS settlement. Consideration for these settlements included both cash and surplus notes of AAC. As prescribed by OCI, the surplus notes are included in AAC’s statutory surplus at their par value of $2.0 billion. At June 30, 2010 AAC has no remaining statutory impairments on its credit derivative portfolio.

6 of 8

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 -2.90%
FB $117.52 7.90%
GOOG $691.20 -2.10%
TSLA $247.54 -1.60%
YHOO $36.58 -1.00%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs