ABK - Ambac Financial Group, Inc. (NYSE Stock)

[BadThad]

ABK still moving north, I'm in at 2.04 and it's at 2.28 today.

[BadThad]

It's been volatile, but holding it's own! ABK wants out of the ratings game:

Ambac Financial Group Inc. will terminate its ratings contract with Fitch Ratings, three months after larger bond-insurer MBIA Inc. asked Fitch to withdraw its ratings on the company.

The move raises new questions about whether companies, particularly financial firms, will become more aggressive in criticizing how the credit raters do their job and the validity some give those grades and how they are handed out.

In explaining its move, Ambac said its decision to focus its operations around its core public-finance and infrastructure operations "has led us to re-evaluate our ratings needs."

Ambac and MBIA, among others, have gotten hurt by moving into the once-lucrative business of guaranteeing mortgage debt against default. But that has since into a major negative as the housing market turned south.

Fitch confirmed it received Ambac's request and is considering it.

The firm, which has been more aggressive in its actions against bond insurers than larger peers Moody's Investors Services and Standard & Poor's, was the first to downgrade the insurance units of Ambac back in January after it abandoned plans to reinforce its capital base by selling $1 billion in equity.

Earlier this month following similar downgraded by other rating firms, Ambac expressed frustrations with S&P about the "ever-changing criteria for AAA financial strength ratings" after the firm cut its rating on Ambac's insurance units below the coveted triple-A level. That move came one day after Moody's warned it was considering a similar move.

Ambac Chief Executive Michael Callen said at the time the timing of both firms' announcements were "unfortunate" because he believed the uncertainty surrounding the bond insurer was temporary, pointing to the strong performance of its portfolio outside its mortgage-related exposures.

Fitch denied MBIA's request to withdraw its ratings, saying in March it would maintain them despite losing access to non-public details about the company's insured portfolio. The ratings will remain in place as long as Fitch believes it can maintain a clear, well-supported credit view without access to those details.

[Skydaemon]

<3 Fitch. The one one even vaguely trying to do it's job.

[BadThad]

ABK was down below $2 this morning....I've added to my position. There's a guy on another forum and we kind of think alike:

Lets do some math...

If I BUY ABK for $1.90, and just like Buffet said, he buys with the
idea that the stock market might be closed for 5 years....will I be
too upset to see if the value of ABK going down to ZERO????? Well, not
really.


On the other hand if even within 10 years, it just reaches $10.90, the
gain will be 1000%.
So the annualized gain will be somewhere 60% compounding


Well, what in the world should be a problem for an investor who can
have the patience and relax with his fishing rod to fish in some lake
water and allowing the grass to grow by itself....just to speak in the
Zen style....??

[BadThad]

Love this website:

Inst Holders of ABK

[BadThad]

Just had a look at insider buying. The big wigs bought 20k shares this month for $2 and $1.88. Always a good sign!

[BadThad]

PPS diving, down to $1.29 ATM, this appears to be due to MBI dropping huge today. I'm going to toss a few more long shares to my modest number.

[BadThad]

Sweet.....my gamble with ABK is looking better:

Ambac board approves $50 mln stock buyback plan
11:32a ET July 3, 2008 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- AMBAC Financial Group Inc. said Thursday its board approved up to $50 million for repurchases of its common stock. "The Board of Directors of Ambac believes that share buyback, when permitted under regulatory rules and corporate policy, represents a good investment of our capital and reinforces our confidence in the long-term stability of our company," said Chief Executive Michael Callen.

[BadThad]

More on the buyback:

Ambac plans buyback after stock offering from March is complete
4:57p ET July 3, 2008 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- Ambac Financial said late Thursday that it will buy back some of its shares after a stock offering from March is complete.

The $50 million repurchase plan will only happen when the underwriters of its March offering -- led by Credit Suisse , Citigroup and UBS -- complete the transaction.

"We are unable to predict when the offering will be completed," Ambac said in a statement.

In early March, Ambac said it priced an offering of more than 171 million shares at $6.75 each, to raise $1.155 billion. Ambac shares have slumped since then and now trade at $1.33.

Offerings such as these usually allow the underwriters to buy some of the shares. When underwriters own some, there are lock-ups that prevent companies from buying back shares.

In Ambac's case, there were lock-ups for 60 days, 90 days and 120 days. The final lock-up expires later in July.

Ambac also said Paul DeRosa, a principal at hedge fund firm Mt. Lucas Management Corp., will join the board of directors on July 7.

DeRosa is an expert in bond trading, derivatives and risk management, Ambac said.

"His skills will be particularly valuable to Ambac at this time," Chief Executive Michael Callen said in a statement. "I've known Paul for over 30 years and I look forward to working with him on the challenges facing Ambac."

Ambac shares jumped 15% to $1.33 on Thursday.

[BadThad]

ABK news out:

Ambac hopeful on approval for $850 mln Connie Lee capitalization
6:26p ET July 7, 2008 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- AMBAC Financial Group Inc. said Monday it's had positive discussions with regulators over a plan to funnel $850 million into an insurance unit called Connie Lee.

Ambac shares climbed 4.5% to close at $1.39.

The company also said later on Monday that recent downgrades by rating agencies triggered requirements to post more than $500 million in extra collateral to support its guaranteed investment contract business.

Connie Lee is a unit of Ambac that is already licensed in many states in the U.S. The company is trying to pump new capital into the subsidiary and launch it as a new bond insurance business focused on guaranteeing municipal debt and global infrastructure deals.

Ambac's current bond insurance business has been crushed by the housing bust. The unit guaranteed mortgage-backed securities and more complex vehicles known as collateralized debt obligations. As foreclosures have surged, the unit has had to pay claims from those guarantees and has lost its crucial AAA ratings, bringing new business grinding to a halt.

Ambac said on Monday that it's had "positive" talks with the Office of the Commissioner of Insurance for the state of Wisconsin, or OCI, which regulates the company's bond insurance business. The discussions have focused on Ambac's plan to send $850 million from the current bond insurance unit, Ambac Assurance Corp., to Connie Lee.

"Ambac intends to seek formal approval from the OCI for capitalization of Connie Lee and believes that it will obtain OCI's approval of the plan," the company said in a statement. "A contribution of capital of $850 million to Connie Lee would bring Connie Lee's total capital to slightly over $1 billion."

Insurance regulators mostly try to make sure that policyholders are paid by insurers when they have a valid claim. With bond insurers facing potentially large claims from guarantees on mortgage securities and CDOs, some investors have worried that Ambac and also rival MBIA Inc. might not be allowed to funnel capital into a new muni bond business.

However, Wisconsin Insurance Commissioner Sean Dilweg said on Monday that Ambac is in a "strong capital position."

Ambac's bond insurance business did not have enough capital to keep its AAA ratings. But the unit may have more than enough to repay all claims that come due over a long period. That may leave regulators more inclined to let the company capitalize a new business.

"We've been working very closely with them as they go through their business planning and adjust to all the challenges of the current market," Dilweg said in an interview. "When we have the physical filing in hand, we will look at it closely and try to turn it around as quickly as possible."

Dilweg expects to receive the filing from Ambac in the next few days.

Ambac also said it's been talking with Moody's Investors Service and Standard & Poor's about getting top triple-A ratings for Connie Lee.

Connie Lee "will be received favorably by the market as it will provide much needed capacity and execution capability," Michael Callen, chief executive of Ambac, said.

More collateral

Downgrades of Ambac Assurance by leading rating agencies last month forced the insurer to post an extra $506 million of collateral to support guaranteed investment contracts it sold.

Another $270 million of these agreements were terminated after the downgrades, the company added in a statement after markets closed on Monday.