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.
Ambac Financial Group, Inc. Announces Second Quarter 2010 Results
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