UPDATE 2-Ambac Q1 loss widens, shares plummet

* Q1 EPS loss $2.39 vs year-earlier loss $1.36

* Loss smaller than Ambac warned a week earlier

* Shares down 8 percent in premarket trade (Updates share price, adds detail on one-time loss, background on capital, MBIA results)

NEW YORK, May 18 (Reuters) - Bond insurer Ambac Financial Group Inc ABK.N reported a wider quarterly loss on Tuesday, sending its shares down 8 percent.

The New York-based company posted a first-quarter loss of $690 million, or $2.39 a share, compared with a loss of $392 million, or $1.36 a share, a year earlier.

Shares of Ambac fell 12 cents to $1.34 in premarket trading.

The results included a one-time loss of $495 million related to Wisconsin state regulators taking control of $64 billion of the insurer's worst assets.

Ambac said last week it could report a first-quarter loss of up to $750 million due to the accounting impact of the regulators' move in March. [ID:nN11124870]

The insurer's capital levels have become severely strained by the mortgage crisis, which forced it to make big payouts on a number of complicated repackaged mortgage bonds it had guaranteed, among other instruments.

Ambac and its larger rival MBIA Inc (MBI.N) lost their top "triple-A" credit ratings in 2008. That rating was crucial for winning business, and both MBIA and Ambac have struggled to write new policies since then.

MBIA last week reported its third straight quarterly loss on charges related to credit derivatives. The bond insurer lost $1.5 billion, or $7.22 a share, in the first quarter. (Reporting by Elinor Comlay; editing by John Wallace)