Ambac
| File:Ambac.jpg | |
| Company type | Public |
|---|---|
| Industry | Financial services |
| Founded | New York City, U.S. (1971) |
| Headquarters | New York City, U.S. |
| Revenue |  US$3.91 Billion (FY 2009) |
| US$725 Million (FY 2009) | |
| Template:Loss US$-14.6 Million (FY 2009) | |
| Total assets | US$18.9 Billion (FY 2009) |
| Total equity | US$-2.29 Billion (FY 2009) |
Number of employees | 113 |
| Subsidiaries | Ambac Assurance Corporation Everspan Financial Insurance Company |
| Website | ambac |
Ambac Financial Group, Inc., initially established as the American Municipal Bond Assurance Corporation, is a U.S.-based holding company. Its subsidiaries deliver financial guarantee services, including bond insurance, catering to clients in both public and private sectors globally. Ambac Assurance focuses on underwriting guarantees for obligations related to public finance and structured finance. The company's common shares and warrants are listed on the New York Stock Exchange under the ticker symbols and . Headquartered in Lower Manhattan, New York City, Ambac operates under the supervision of the Wisconsin insurance regulatory authority.
The main subsidiaries within Ambac's corporate structure include Ambac Assurance Corporation and Everspan Financial Insurance Company.
History and Credit ratings
Founded in 1971 in Milwaukee, Wisconsin, as the American Municipal Bond Assurance Corporation, Ambac began as a subsidiary of MGIC Investment Corp with the purpose of insuring municipal bonds against default risk. In 1985, Citibank acquired a controlling interest in Ambac Inc., alongside other stakeholders such as Xerox Corp., Ambac’s management team, and Stephens Inc. By 1989, Citibank had attained full ownership and subsequently launched Ambac’s initial public offering in 1990, fully divesting its holdings by 1992. The company rebranded to Ambac Financial Group, Inc. in 1997, with its municipal insurance division adopting the name Ambac Assurance.
During the 2007 subprime mortgage financial crisis, Ambac, along with other bond insurers like MBIA, experienced substantial financial setbacks. On January 18, 2008, Fitch Ratings downgraded Ambac’s credit rating from AAA to AA following an unsuccessful $2 billion capital raise attempt. Nevertheless, Moody's and S&P upheld their AAA ratings after a $1.5 billion capital injection was completed in March 2008. The uncertainty surrounding bond insurers’ capacity to fulfill claims on securities backed by subprime mortgages prompted initiatives to strengthen their capital bases. Subsequently, Moody’s reduced Ambac’s rating to Aa3 on June 19, 2008.
Between 2008 and 2010, Ambac’s credit ratings continued to deteriorate. In March 2010, Moody’s lowered the senior unsecured debt rating of Ambac Financial Group from Ca to C and placed the insurance financial strength rating of Ambac Assurance under review for potential upgrade. On March 25, 2010, S&P downgraded Ambac Assurance Corp.’s ratings to 'R', categorizing it below investment grade. Facing challenges with dividend payments from its bond insurance operations, Ambac announced intentions for a pre-packaged bankruptcy filing on June 8, 2010. This announcement precipitated a sharp decline in its stock price by August of that year.
Ambac failed to make an interest payment due November 1, 2010, leading to a Chapter 11 bankruptcy filing on November 8, 2010. The company successfully emerged from Chapter 11 proceedings on May 1, 2013, issuing new common stock and warrants to creditors.
Following interim roles as President and CEO and then Executive Chairman in 2015, Tavakoli was officially appointed President and CEO in January 2016. His leadership prioritized enhancements in risk analytics, operational efficiency improvements, asset management strategies, shareholder engagement, and recovery of losses.
In 2017, Claude LeBlanc took over as CEO from Tavakoli. Under LeBlanc’s guidance, on February 12, 2018, Ambac Assurance's Segregated Account concluded its rehabilitation process through a thorough restructuring plan and resumed full cash payments of all claims.
In May 2020, Ambac Assurance initiated legal action against the Puerto Rico Financial Oversight & Management Board in U.S. District Court for alleged violations of bankruptcy law provisions.
December 2020 marked the launch of a new strategic direction for Ambac with the acquisition of an 80% ownership interest in Xchange, a managing general underwriter. Subsequently, in February 2021, Ambac introduced Everspan Group—a specialty program insurance platform comprising Everspan Indemnity Company (operating within excess and surplus lines) and Everspan Insurance Company (an admitted carrier).