Ambac Takes Capital Raising Initiatives

Ambac Financial Group said it will issue at least $1 billion of equity and equity-linked securities. The company said it may also take on additional capital from reinsurance or issuance of debt securities. By raising the additional capital, Ambac said it expects to meet or exceed Fitch Ratings' current triple-A capital requirements. The company also announced that it will reduce the quarterly dividend on its common stock from $0.21 per share to $0.07 per share. Ambac has been working with Credit Suisse as its financial adviser. The news comes just as Ambac said it would take a $5.4 billion, pre-tax writedown in the fourth quarter, $1.1 billion of which is related to its ABS CDO exposure. Ambac expects to report a net loss per share of up to $32.83 for the fourth quarter ended December 31, 2007 Along with the announcements, comes a restructuring on the managerial level. Michael A. Callen, who has been on Ambac's board since the company went public in 19991, has been named presiding director and a member of the Audit and Risk Assessment; Compensation; and Governance committees of Ambac's Board of Directors. He succeeds Robert J. Genader, whose retirement from the company is effective today.