Ambac considering split: report

Troubled bond insurer said to be in talks to separate municipal debt from mortgage-backed securities business, but deal could fall apart.

Subscribe to Companies
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

ambac_logo.03.jpg

NEW YORK (CNNMoney.com) -- Bond insurer Ambac Financial Group Inc. is in talks to split itself into two units, the Wall Street Journal reported on its web site Sunday.

Under the plan, one unit would insure municipal debt, while the other would insure securities tied to mortgages, according to the Journal.

The structure is meant to make sure that municipal bonds backed by Ambac keep high credit ratings, but a deal would be complicated and could fall apart, the Journal said.

New York-based Ambac (ABK) is the U.S.'s second-largest bond insurer, after MBIA Inc (MBI).

On Friday, the U.S.'s third-biggest bond insurer, Financial Guaranty Insurance Co., reportedly asked New York state insurance regulators to split its troubled structured finance arm from its healthy municipal bond insurance business.

FGIC's move came after New York Gov. Eliot Spitzer warned at a congressional hearing Thursday that the state might be forced to "strip the municipal businesses" from bond insurers if they fail to raise sufficient capital to cushion against possible losses in the future.  To top of page

Photo Galleries
10 most expensive cars sold at Pebble Beach These multi-million-dollar cars sold for top dollar at this year's Pebble Beach collector car auctions. More
The world's most popular beer is ... Few people outside China have ever tasted the top-selling brew in the world. More
Transformations on the street On his days off, stylist Mark Bustos gives free haircuts to the homeless. Here are some of the transformations. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.