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December 14, 2007


Gary B

Why would AGO reinsure $29B of ABK's paper? Then ABK reinsures the reinsurance!

Ambac Announces Reinsurance Transaction with Assured Guaranty, Ltd.
10:18a ET December 13, 2007 (Business Wire)
Ambac Financial Group, Inc. (NYSE: ABK) ("Ambac") announced today that its financial guarantee insurance subsidiary, Ambac Assurance Corporation ("Ambac Assurance"), has entered into a commitment to reinsure to Assured Guaranty Re Ltd. ("AG Re"), the reinsurance subsidiary of Assured Guaranty Ltd. (NYSE: AGO), a diversified portfolio of financial guaranty contracts. The portfolio totals approximately $29 billion of net par outstanding and will be ceded under an existing master facultative reinsurance agreement with AG Re. Pursuant to the commitment, AG Re has agreed to provide reinsurance under the terms of Ambac's current surplus share treaty program that expires March 31, 2008. Ambac has also agreed to offer AG Re the opportunity to provide reinsurance under the terms of Ambac's surplus share treaty programs that commence April 1, 2008, 2009 and 2010.

Commenting on the reinsurance arrangement, Ambac Chairman and Chief Executive Officer, Robert J. Genader, noted, "We value Assured's reinsurance capacity and look forward to a prosperous relationship with the company in the years to come." Mr. Genader added, "Reinsurance is a valuable, capital-efficient and shareholder-friendly tool for managing risk and capital in the financial guaranty industry. This reinsurance arrangement immediately increases our current claims paying resources providing additional capacity to grow our business in a period when market conditions for our core financial guarantee product are favorable."



When do you think it will be time up for MBIA?



WHOOPS!!! Guess you had it ALL wrong. AAA affirmed and now they stand to get all new business at 150% margins.

Trading at 30% of book - Ambac will trade to 65-75 VERY soon.

Moodys just flushed your thesis, so maybe you can find something else to bash and be depressed about.


Thus, I assume you are inferring that since Moody's grants a AAA rating on this company, I had it all wrong. Who was more wrong over the last 2 quarters, me or Moody's? Moody's has given vehicles AAA status to product that have not only stopped paying interest, but lost much their principle. No thesis is flushed, the credit wizard has conflicted interests... If anything, this confirms my thesis of Moody's being the confused credit wizard. Compare how much you would have made (or lost) following Moody's ratings advice in this area over the last year or two. I am not even going to suggest who to compare it to.

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I believe it may be close to its death knell, and possibly delisted. Expect to see an announcement like this for Ambac Financial over the next 8 quarters.

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I believe it may be close to its death knell, and possibly delisted. Expect to see an announcement like this for Ambac Financial over the next 8 quarters.

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