Ambac posts $2.4 billion quarterly loss
NEW YORK (Reuters) - Bond insurer Ambac Financial Group (ABK.N) reported a much bigger third-quarter loss, hurt by heavy investment write-downs and market losses.
The quarterly results were hit by $2.7 billion of unrealized losses on credit derivatives contracts.
Ambac has suffered large losses after guaranteeing billions of risky repackaged subprime mortgage bonds, leading to strain on the company's capital base.
It also has seen little new business since losing top-notch credit ratings. The company was trying to fix that by setting up a stand-alone insurer to guarantee municipal bond issues, an area that was its bread-and-butter before it strayed into covering more exotic debt.
But on Wednesday, Ambac said it had postponed plans to capitalize the new company, as a result of a rating downgrade in September.
The insurer said its net loss widened to $2.4 billion, or $8.45 a share, from $360.6 million, or $3.53 a share, a year earlier.
The company said it had $186.6 million in cash on hand at the end of the third quarter.
Ambac shares were down 18.5 percent at $2.77 in trading before the market opened, after closing up 10.4 percent at $3.40 on Tuesday.
(Reporting by Lilla Zuill; Editing by Lisa Von Ahn)
