INSTANT VIEW 4 - Ambac to raise at least $1.5 bln

NEW YORK (Reuters) - Ambac Financial Group Inc said on Wednesday that it will sell at least $1.5 billion of stock and equity-linked securities to help boost capital levels at its main insurance unit, which had been facing potential ratings downgrades.

Ambac said it will sell at least $1 billion of common stock. It also plans to sell at least $500 million of equity units. Its shares fell 15 percent in afternoon trade. Story:

MARKET COMMENTS

MICHAEL HOLLAND, PORTFOLIO MANAGER AND FOUNDER OF HOLLAND & CO,

NEW YORK

"For me, the big story is the market's hypersensitivity to every single announcement as it relates to the monoline insurers. The sensitivity to bad news in this area, I think, is symptomatic of the market's deeper concern with the financial system."

Asked if Ambac's plan goes far enough, he said:

"The market is saying it's not sufficient, so it's not sufficient. At the end of the day, whether it's a bank, insurer or S&L, they're all based on the confidence of the market place."

CLIFTON HOOVER, CO-CHIEF INVESTMENT OFFICER, DREMAN VALUE

MANAGEMENT, NEW JERSEY, WHICH HAS SOME SHORT POSITIONS ON

AMBAC

"Both Ambac and MBIA are not triple-A rated companies, given their situation and leverage. Compare that to a Pfizer which was actually downgraded last year to double-A, with virtually no debt and very strong free cash flow. There is something wrong there.

"They (Ambac, MBIA) are probably closer to triple-C than they are to triple-A."

GEORGE SCHWARTZ, PRESIDENT, SCHWARTZ INVESTMENT COUNSEL,

BLOOMFIELD HILLS, MICHIGAN:

"It's a disappointment obviously. Both Ambac and MBIA and the others are suffering from a crisis of confidence. They have their backs against the wall in many respects. I don't know how they're going to get out of this. I wish I knew what the answer is. We don't have investments in either. I'm glad we don't.

TIM SMALLS, HEAD OF U.S. STOCK TRADING AT BROKERAGE FIRM

EXECUTION LLC, GREENWICH, CONNECTICUT:

"Right now everybody is looking at it as a disappointment. Keep in mind a lot of people who bought the stock were short- term investors and they're bailing out now.

"Instead of a group of banks coming in and bailing them out, they're filing a prospectus to issue stock, which was not what the (stock) market was looking for."

SEAN EGAN, MANAGING DIRECTOR OF INDEPENDENT CREDIT-RATING FIRM

EGAN-JONES RATINGS INC, PHILADELPHIA, PENNSYLVANIA:

"It's lovely that they are raising the additional capital and they sorely need it but it does not provide us with enough comfort to issue anything near an investment grade rating for the company.

"We estimate the pipeline losses at between $7 billion and $10 billion ... they need a lot more to cover those losses."

BRIAN EDMONDS, MANAGING DIRECTOR OF FIXED INCOME AT CANTOR

FITZGERALD, NEW YORK:

"The news you got is mixed. They (Ambac) haven't exactly solved all their problems."

MARK LANE, ANALYST WITH WILLIAM BLAIR, CHICAGO

"I think the disappointment is that they (investors) wanted a solution that provided more clarity.

"This does not clear up (questions)."

(Contributions from Joseph A. Giannone, Lilla Zuill, Cal Mankowski, Caroline Valetkevitch, John Parry, Richard Leong and Mark McSherry in New York and Muralikumar Anantharaman in Boston)