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The Ambac Financial Group, Inc., generally known as Ambac, (NYSE: ABK) is an American holding company whose subsidiaries provide financial guarantee products, such as bond insurance and other financial services to clients in both the public and private sectors around the world. Ambac is regulated by the insurance commission of Wisconsin. Through its financial services subsidiaries, the company provides investment agreements, interest rate swaps, investment advisory and cash management services, primarily to states, municipalities and their authorities.
[edit] Credit rating
Ambac and other bond guarantors such as MBIA were hit hard by the 2007 subprime mortgage financial crisis and on January 18, 2008 its Fitch credit rating was lowered from AAA (the highest) to AA when its plans to raise two billion dollars in new capital failed.[2] Moody's and S&P however chose to affirm Ambac's AAA with their agencies after it succeeded in raising $1.5 billion in new capital in March of 2008 [3] In early 2008 the spectre of the major bond guarantors failing to be able to pay off insurance claims on a trillion dollars of securities back by sub-prime mortgages and other securitized debt led to attempts to shore them up with infusions of capital.[4]
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