AMBAC STOPS WRITING STRUCTURED FINANCE BUSINESS

New York-based monoliner Ambac said at the weekend that it would cease writing policies using credit-default swaps and will no longer write business in certain international structured-finance sectors. Along with a move to cut its dividend from 7¢ to 1¢, the company expects to free up around $600m in capital as part of a plan to raise $2bn in capital and preserve its triple A credit rating. Ambac is currently in talks to raise some $3bn from a consortium of banks which hold bonds insured by Ambac, although the claims that the bond insurer could face are thought to be significantly higher than this. Ambac has written $22bn of collateralised mortgage obligations, of which $6.9bn are experiencing events of default, according to Takavoli Structured Finance Inc.