UPDATE: Ambac Financial CFO Quits To 'Pursue Other Interests'
(Adds background on Ambac's remediation efforts, updates share prices.)
By Lavonne Kuykendall and Kathy Shwiff
Of DOW JONES NEWSWIRES
Ambac Financial Group Inc. (ABK) said Chief Financial Officer Sean Leonard
resigned, effective Tuesday, to pursue other interests.
Shares doubled their losses on the news and were recently down 9.1% at 82
cents. The stock has slumped 43% the past year.
Until a replacement is named, the company said, his department heads will
report directly to Chief Executive David Wallis. Leonard joined the struggling
bond insurer as financial chief in 2005.
Last week, Ambac reported $856 million of surplus as of Sept. 30, easing
concerns that it would fall short of statutory minimums. Some Wall Street
analysts had speculated the company would come up short of the $2 million in
minimum capital needed under rules set up by its regulator, the Wisconsin Office
of the Commissioner of Insurance. A spokesman with the Wisconsin regulator did
not immediately return a phone call asking for comment.
Ambac was able to boost its regulatory capital just before filing statutory
returns last week when it was able to negotiate the cancellation of four credit
default swaps contracts worth $5.03 billion for cash payments of about $520
million.
Ambac is in discussions with lenders over about $1.9 billion of claims it has
made over residential loans in securities it insures. In its third-quarter
earnings call, Leonard said it might take up to three years to complete the
process of getting reimbursed for the bad loans in the securities.
A spokeswoman at Ambac did not return a message asking what role Leonard
played in helping Ambac through the process.
Leonard's departure is the second high-profile resignation in the past several
months. In June, Ambac announced that it was putting off the launch of its
planned public-finance bond insurance startup, Everspan, and that Douglas
Renfield-Miller, executive vice president of Ambac and chief executive of
Everspan, would retire as of the end of the year.
Ambac earlier this month posted a third-quarter profit on big mark-to-market
gains from credit derivative along with growing insurance losses, particularly
on mortgage-backed securities.
Other bond insurers also traded down recently, with shares of MBIA Inc. (MBI)
down 4.2% to $3.39 and Assured Guaranty Ltd. (AGO) down 3.1% to $23.01.
-By Lavonne Kuykendall and Kathy Shwiff, Dow Jones Newswires; (312) 750 4141;
lavonne.kuykendall@dowjones.com
(END) Dow Jones Newswires
11-24-091413ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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