Ambac Financial Group Inc. Announces Regulatory Approval for Connie Lee Capital Contribution
02 Settembre 2008 - 10:41PM
Business Wire
Ambac Financial Group, Inc. (NYSE: ABK) Ambac Assurance Corporation
(Ambac Assurance) today announced that it has received regulatory
approval from the Commissioner of Insurance of the State of
Wisconsin to capitalize and reactivate Connie Lee Insurance Company
(�Connie Lee�), its financial guarantee subsidiary. Connie Lee will
conduct business under a new name and will focus on the U.S.
municipal and global public purpose financing markets. Ambac
Assurance will inject $850 million into Connie Lee which will
operate as a separate corporate and legal entity within Ambac
Financial Group, Inc. (Ambac). Ambac is seeking to obtain
stand-alone triple-A ratings for Connie Lee, and has worked
extensively with Moody�s and Standard and Poor�s towards that goal.
Connie Lee expects to write new insurance policies no later than
the fourth quarter of 2008. In conjunction with receiving
regulatory approval, Ambac announced that Douglas Renfield-Miller,
currently Executive Vice President of Ambac and Chairman and CEO of
Ambac Assurance UK Limited, has been named CEO designate for Connie
Lee. Ambac will transfer certain underwriting, management and
support staff to Connie Lee over the course of the next few months.
Benefiting from Ambac�s historic industry-leading experience, Ambac
believes that Connie Lee will have a distinct competitive advantage
in the bond guarantee marketplace. Independent risk management will
be a cornerstone of Connie Lee�s business model. Demonstrating its
commitment to this priority, Ambac is pleased to announce that Judy
Slotkin has been hired as Chief Risk Officer for Connie Lee. Ms.
Slotkin brings extensive experience in investment and commercial
banking, and has held positions as Senior Credit Officer of
Citigroup and Credit Head for Citigroup�s Public Finance business.
Douglas Renfield-Miller, CEO designate for Connie Lee, commented,
�We are delighted to welcome Judy aboard and excited at the
prospects for Connie Lee. We believe that Connie Lee will redefine
the financial guarantee business model through its clean balance
sheet, municipal and public purpose focused business, strong
corporate governance and unprecedented transparency. Public sector
issuers are facing increased financing needs and increased funding
costs at a time when the availability of insurance has been
seriously curtailed. We believe Connie Lee will fill a critical
need while also fully addressing investor concerns with the
financial guarantee business model.� �Connie Lee will help carry
forward the successful franchise Ambac has built up over 37 years
while addressing rating agency concerns regarding business
production,� said Michael Callen, Chairman and CEO of Ambac. �This
is an important element in our strategy to restore Ambac
Assurance�s own triple-A ratings and create value for our
shareholders.� Forward-Looking Statements This release contains
statements that may constitute "forward-looking statements" within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Any or all of management�s
forward-looking statements here or in other publications may turn
out to be wrong and are based on Ambac�s management current belief
or opinions. Ambac�s actual results may vary materially, and there
are no guarantees about the performance of Ambac�s securities.
Among events, risks, uncertainties or factors that could cause
actual results to differ materially are: (1)�changes in the
economic, credit, foreign currency or interest rate environment in
the United States and abroad; (2)�the level of activity within the
national and worldwide credit markets; (3)�competitive conditions,
pricing levels and reduction in demand for financial guarantee
products; (4)�legislative and regulatory developments; (5)�changes
in tax laws; (6) changes in our business plan, our decision to
discontinue writing new business in the financial services area, to
significantly reduce new underwriting of structured finance
business and to discontinue all new underwritings of structured
finance business for six months from March 6, 2008; (7)�the
policies and actions of the United States and other governments;
(8)�changes in capital requirements whether resulting from
downgrades in our insured portfolio or changes in rating agencies�
rating criteria or other reasons; (9)�changes in Ambac�s and/or
Ambac Assurance�s credit or financial strength ratings;
(10)�changes in accounting principles or practices relating to the
financial guarantee industry or that may impact Ambac�s reported
financial results; (11)�inadequacy of reserves established for
losses and loss expenses; (12)�default by one or more of Ambac
Assurance�s�portfolio investments, insured issuers, counterparties
or reinsurers; (13)�credit risk throughout our business, including
large single exposures to reinsurers; (14)�market spreads and
pricing on insured collateralized debt obligations (�CDOs�) and
other derivative products insured or issued by Ambac; (15)�credit
risk related to residential mortgage securities and CDOs; (16)�the
risk that holders of debt securities or counterparties on credit
default swaps or other similar agreements seek to declare events of
default or seek judicial relief or bring claims alleging violation
or breach of covenants by Ambac or one of its subsidiaries;
(17)�the risk that our underwriting and risk management policies
and practices do not anticipate certain risks and/or the magnitude
of potential for loss as a result of unforeseen risks; (18)�the
risk of volatility in income and earnings, including volatility due
to the application of fair value accounting, or FAS 133, to the
portion of our credit enhancement business which is executed in
credit derivative form; (19)�operational risks, including with
respect to internal processes, risk models, systems and employees;
(20)�the risk of decline in market position; (21)�the risk that
market risks impact assets in our investment portfolio; (22)�the
risk of credit and liquidity risk due to unscheduled and
unanticipated withdrawals on investment agreements; (23)�changes in
prepayment speeds on insured asset-backed securities; (24) factors
that may influence the amount of installment premiums paid to
Ambac; (25)�the risk that we may be required to raise additional
capital, which could have a dilutive effect on our outstanding
equity capital and/or future earnings; (26)�our ability or
inability to raise additional capital, including the risks that
regulatory or other approvals for any plan to raise capital are not
obtained, or that various conditions to such a plan, either imposed
by third parties or imposed by Ambac or its Board of Directors, are
not satisfied and thus potentially necessary capital raising
transactions do not occur, or the risk that for other reasons the
Company cannot accomplish any potentially necessary capital raising
transactions; (27)�the risk that Ambac�s holding company structure
and certain regulatory and other constraints, including adverse
business performance, affect Ambac�s ability to pay dividends and
make other payments; (28)�the risk of litigation and regulatory
inquiries or investigations, and the risk of adverse outcomes in
connection therewith, which could have a material adverse effect on
our business, operations, financial position, profitability or cash
flows; (29)�changes in expectations regarding future realization of
gross deferred tax assets; (30) risks relating to the re-launch of
Connie Lee; (31) other factors described in the Risk Factors
section in Part I, 1A of our Annual Report on Form 10-K for the
fiscal year ended December 31, 2007 and in Part II, Item 1A of our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2008,
and also disclosed from time to time by Ambac in its subsequent
reports on Form 10-Q and Form 8-K, which are or will be available
on the Ambac website at www.ambac.com and at the SEC�s website,
www.sec.gov; and (32)�other risks and uncertainties that have not
been identified at this time. Readers are cautioned that
forward-looking statements speak only as of the date they are made
and that Ambac does not undertake to update forward-looking
statements to reflect circumstances or events that arise after the
date the statements are made. You are therefore advised to consult
any further disclosures we make on related subjects in Ambac�s
reports to the SEC. Ambac Financial Group, Inc., headquartered in
New York City, is a holding company whose affiliates provide
financial guarantees and financial services to clients in both the
public and private sectors around the world. Ambac's principal
operating subsidiary, Ambac Assurance Corporation, a guarantor of
public finance and structured finance obligations, has earned a Aa3
rating from Moody's Investors Service, Inc. and a AA rating from
Standard & Poor's Ratings Services; both Moody�s and Standard
& Poor's maintain a negative outlook. Ambac Financial Group,
Inc. common stock is listed on the New York Stock Exchange (ticker
symbol ABK).
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