Ambac Financial's(ABK Quote) plan to raise $1 billion through a stock offering disappointed investors hoping for a bailout, sending the financial sector and overall market plummeting Wednesday.
Ambac shares plummeted as much as 19.8% after saying it would sell $1 billion worth of its stock and $500 million in equity units in an attempt to add to its capital base to backstop losses to debt it insures. The move is designed to save its remaining triple-A credit ratings, critical for the company to win new business. More recently, the stock was down 14.2% to $9.20.
Larger rival MBIA(MBI Quote), which has raised $2.6 billion in new capital so far, also sank 4% on the news to $12.46. The NYSE Financial Sector Index slipped 43.34 to 7,160.76. ...
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