Ambac Releases Selected Monthly Data for May 2008
26 Juin 2008 - 11:40PM
Business Wire
Ambac Financial Group, Inc. (NYSE: ABK) (Ambac) today released
selected pre-tax financial data for the month of May 2008. Ambac�s
impairment analysis is performed on a quarterly basis. As such, the
monthly data does not reflect the results of the quarterly credit
derivative impairment, insurance loss reserve and investment
portfolio impairment analysis. Key Financial Highlights: � - �
Normal premium amortization and refundings continue to support the
stated goal of building and maintaining a capital cushion; � - The
unrealized change in the fair value of credit derivatives reflects
the continued dislocation in the credit markets as credit spreads
in certain of our CDO of ABS exposures continue to widen; and � -
Overall, the financial guarantee investment portfolio, comprised of
highly liquid securities, has an unrealized gain of 161.4 million
at May 31, 2008. ($ millions) � � Selected Data (Unaudited) � Month
of May 2008 � Quarter-to- date � Insured Portfolio � Normal
Premiums Earned (1) $ 56.2 $ 112.7 Accelerated Net Premiums Earned
(2) 42.4 97.0 � Net Change in Fair Value of Credit Derivatives (3)
(96.2) (272.2) � Investment Portfolio Net Investment Income 42.5
84.6 Change in Fair Value of the Investment Portfolio (4) -
Financial Guarantee Portfolio (14.7) (20.6) - Financial Services
Portfolio 12.7 (34.8) � Financial Guarantee Liquidity Installment
Premiums Written, net of reinsurance 33.0 69.2 Investment Portfolio
Cash Received (5) 85.3 134.3 Claims Paid, net of reinsurance �
(23.1) � (39.3) (1) Defined as net premiums earned, computed in
conformity with U.S. generally accepted accounting principles, less
accelerated net premiums earned as defined in footnote 2 below. (2)
Accelerated net premiums earned relate to transactions that had
been insured by Ambac Assurance, which have been called or refunded
in the periods presented. When an issue insured by Ambac Assurance
has been refunded or called, any remaining unearned premium is
earned at that time. (3) Estimated changes in fair value of credit
derivatives may not include all adjustments that would be included
in the quarterly results presented in conformity with U.S.
generally accepted accounting principles. Certain surveillance,
valuation and reserving processes are performed on a quarterly
basis, including processes that are considered important inputs to
calculations of fair value (such as internal Ambac ratings on the
underlying reference obligations). Consequently, monthly results
may differ materially from amounts that would be determined in
connection with the quarterly close process. (4) Includes both
realized and unrealized gains and losses. (5) Defined as principal
received on maturing invested assets plus coupon interest received
during the period. ($ millions) Selected Data (Unaudited) � End of
Period Balances (at May 31, 2008) � Financial Guarantee Investment
Portfolio Long Term Investment Portfolio at Fair Value $10,998.6
Cash & Short Term Investment Balances 1,034.7 Total 12,033.3 �
Holding Company Cash & Short Term Investment Balances Ambac
Financial Group, Inc (parent only) � 181.7 Forward-Looking
Statements This release contains statements that may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Any or all of management�s forward-looking statements here or in
other publications may turn out to be wrong and are based on
Ambac�s management current belief or opinions. Ambac�s actual
results may vary materially, and there are no guarantees about the
performance of Ambac�s securities. Among events, risks,
uncertainties or factors that could cause actual results to differ
materially are: (1)�changes in the economic, credit, foreign
currency or interest rate environment in the United States and
abroad; (2)�the level of activity within the national and worldwide
credit markets; (3)�competitive conditions and pricing levels;
(4)�legislative and regulatory developments; (5)�changes in tax
laws; (6) changes in our business plan, our decision to discontinue
writing new business in the financial services area, to
significantly reduce new underwriting of structured finance
business and to discontinue all new underwritings of structured
finance business for six months from March 6, 2008; (7)�the
policies and actions of the United States and other governments;
(8)�changes in capital requirements whether resulting from
downgrades in our insured portfolio or changes in rating agencies�
rating criteria or other reasons; (9)�changes in Ambac�s and/or
Ambac Assurance�s credit or financial strength ratings;
(10)�changes in accounting principles or practices relating to the
financial guarantee industry or that may impact Ambac�s reported
financial results; (11)�inadequacy of reserves established for
losses and loss expenses; (12)�default by one or more of Ambac
Assurance�s�portfolio investments, insured issuers, counterparties
or reinsurers; (13)�credit risk throughout our business, including
large single exposures to reinsurers; (14)�market spreads and
pricing on insured collateralized debt obligations (�CDOs�) and
other derivative products insured or issued by Ambac; (15)�credit
risk related to residential mortgage securities and CDOs; (16)�the
risk that holders of debt securities or counterparties on credit
default swaps or other similar agreements seek to declare events of
default or seek judicial relief or bring claims alleging violation
or breach of covenants by Ambac or one of its subsidiaries;
(17)�the risk that our underwriting and risk management policies
and practices do not anticipate certain risks and/or the magnitude
of potential for loss as a result of unforeseen risks; (18)�the
risk of volatility in income and earnings, including volatility due
to the application of fair value accounting, or FAS 133, to the
portion of our credit enhancement business which is executed in
credit derivative form; (19)�operational risks, including with
respect to internal processes, risk models, systems and employees;
(20)�the risk of decline in market position; (21)�the risk that
market risks impact assets in our investment portfolio; (22)�the
risk of credit and liquidity risk due to unscheduled and
unanticipated withdrawals on investment agreements; (23)�changes in
prepayment speeds on insured asset-backed securities; (24) factors
that may influence the amount of installment premiums paid to
Ambac; (25)�the risk that we may be required to raise additional
capital, which could have a dilutive effect on our outstanding
equity capital and/or future earnings; (26)�our ability or
inability to raise additional capital, including the risks that
regulatory or other approvals for any plan to raise capital are not
obtained, or that various conditions to such a plan, either imposed
by third parties or imposed by Ambac or its Board of Directors, are
not satisfied and thus potentially necessary capital raising
transactions do not occur, or the risk that for other reasons the
Company cannot accomplish any potentially necessary capital raising
transactions; (27)�the risk that Ambac�s holding company structure
and certain regulatory and other constraints, including adverse
business performance, affect Ambac�s ability to pay dividends and
make other payments; (28)�the risk of litigation and regulatory
inquiries or investigations, and the risk of adverse outcomes in
connection therewith, which could have a material adverse effect on
our business, operations, financial position, profitability or cash
flows; (29)�changes in expectations regarding future realization of
gross deferred tax assets; (30) other factors described in the Risk
Factors section in Part I, 1A of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2007 and in Part II, Item 1A of
our Quarterly Report on Form 10-Q for the quarter ended March 31,
2008, and also disclosed from time to time by Ambac in its
subsequent reports on Form 10-Q and Form 8-K, which are or will be
available on the Ambac website at www.ambac.com and at the SEC�s
website, www.sec.gov; and (31)�other risks and uncertainties that
have not been identified at this time. Readers are cautioned that
forward-looking statements speak only as of the date they are made
and that Ambac does not undertake to update forward-looking
statements to reflect circumstances or events that arise after the
date the statements are made. You are therefore advised to consult
any further disclosures we make on related subjects in Ambac�s
reports to the SEC. Ambac Financial Group, Inc., headquartered in
New York City, is a holding company whose affiliates provide
financial guarantees and financial services to clients in both the
public and private sectors around the world. Ambac's principal
operating subsidiary, Ambac Assurance Corporation, a guarantor of
public finance and structured finance obligations, has earned a Aa3
rating from Moody's Investors Service, Inc. and a AA rating from
Standard & Poor's Ratings Services; Moody�s rating is on
negative outlook while Standard & Poor's maintains a credit
watch negative. Ambac Financial Group, Inc. common stock is listed
on the New York Stock Exchange (ticker symbol ABK).
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