Turned down by the banks, Ambac turns to stock market for funds

The company had previously told investors that as a result of market conditions and other factors – including rating agency actions – raising equity capital was not an attractive option

Troubled US bond insurer Ambac Financial is hoping to raise $1.5bn in new capital from public offerings of stock and convertible securities to help preserve the top-tier credit ratings critical for its main insurance business. The move by the New York-based insurer came after it failed to reach a capital injection deal with the banking industry which would have provided more funds to cover billions of dollars of claims it could face after insuring subprime mortgage bonds and other risky debt.