UPDATE 1-Ambac gets Wis. green light for muni entity
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NEW YORK, Sept 2 (Reuters) - Ambac Financial Group Inc (ABK.N) said on Tuesday it won Wisconsin regulatory approval for a subsidiary to insure municipal bonds, seen as a key move in rebuilding its struggling business and sending up its shares.
The company said it received approval from the Wisconsin commissioner of insurance.
Ambac said it has recapitalized a subsidiary known as Connie Lee Insurance Co with $850 million. The unit will focus on insuring more traditional debt, such as municipal bonds, rather than the complex packages of debt that led to billions of dollars in losses this year.
Ambac lost its prized 'triple-A' rating from the two major ratings agencies in June as a result of the losses.
Connie Lee, which Ambac hopes will get it back in the bond insurance business, will start writing insurance policies by the fourth quarter, according to a company statement.
Ambac named Douglas Renfield-Miller, currently executive vice president of Ambac and chairman and chief executive of its U.K. business, as CEO of Connie Lee.
Ambac shares rose 12.7 percent to $7.97 in extended trading after the announcement. (Reporting by Elinor Comlay; editing by Jeffrey Benkoe)
