UPDATE 1-Ackman: regulators should halt bond insurer dividends

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NEW YORK, Jan 30 (Reuters) - The founder of hedge fund Pershing Square Capital Management told regulators on Wednesday that the two biggest U.S. bond insurers face combined losses of over $23 billion from bonds they've insured, and should be forced to stop paying dividends.

Ambac Financial Group Inc (ABK.N) faces losses of $11.61 billion from asset-backed securities and collateralized debt obligations it insured, Pershing's Bill Ackman said in a letter to regulators.

MBIA Inc (MBI.N) faces at least $11.63 billion of losses from these obligations, plus additional losses from reinsurance that may no longer be valid, Ackman said.

The two companies should be forced to stop shifting money from their operating subsidiaries to their holding companies to preserve capital, Ackman said. Money moved to the holding company can be used to pay dividends, and pay holding company debts and expenses.

In an open letter to Ambac and MBIA's state regulators, as well as officials at the U.S. Securities and Exchange Commission, Ackman said that it has completed a complete analysis of securities in Ambac's and MBIA's portfolio, based on data from a bank that it believes are reasonable.

But Pershing makes no representations regarding the accuracy and completeness of the data, Ackman wrote.

Ackman said the data and the valuation models that Pershing used were posted publicly at: ">here

Pershing Square, which is short MBIA and Ambac, welcomes suggestions from market participants, Ackman said. The letter refers to the model as the "Open Source Model." (Reporting by Dan Wilchins; Editing by Brian Moss, Leslie Gevirtz)