UPDATE 3-Ambac profit boosted by credit derivative gains

* Q3 EPS $7.58 vs loss $8.45 a year earlier

* Accounting gain from credit derivatives $2.13 billion

* Shares up as much as 46 percent (Recasts paragraphs 1 and 2, adds MBIA share rise)

NEW YORK, Nov 4 (Reuters) - Bond insurer Ambac Financial Group ABK.N posted a quarterly profit of more than $2 billion after accounting gains related to its weakening credit quality, reversing a year-earlier loss and sending its shares up as much as 46 percent.

The value of the company's debt relative to Treasuries fell during the quarter, triggering $2.13 billion in gains from credit protection it sold to customers on complex mortgage securities.

Third-quarter profit totaled $2.19 billion, or $7.58 a share, compared with a loss of $2.4 billion, or $8.45 a share, a year earlier, Ambac reported on Wednesday.

The bond insurer's shares rose as high as $1.62, up 46 percent, in morning trading on the New York Stock Exchange.

Ambac, like its larger rival MBIA Inc (MBI.N), has struggled to write new business since losing its top-notch credit rating last year.

Ambac said net premiums earned in the third quarter dropped 16 percent to $238.4 million.

The New York-based company is still battling losses on complex debt securities it insured. Such losses, and loss expenses, totaled $459 million in the third quarter, down from $607 million a year earlier. Net claims paid jumped to $315.1 million from $182.4 million, largely related to residential mortgage-backed securities.

In June the bond insurer delayed plans to launch a municipal bond arm called Everspan after having difficulty raising money from outside investors to fund the unit.

Shares of MBIA, due to report third-quarter results next week, were up about 15 percent to $4.72. (Reporting by Elinor Comlay, editing by Gerald E. McCormick and John Wallace)