Ambac Eyeing Capital Infusion

Ambac, a New York-based bond insurer that has been wrestling with U.S. mortgage-related woes, may be getting a capital infusion from a group of banks in the wake of recent regulatory pressure on the industry."We haven't concluded negotiations," said an Ambac spokeswoman Monday afternoon, confirming that the company is considering the possibility among its options. A spokesman for the New York Insurance Department, in noting reports that Ambac has been working with a group of banks, said only, "There is stuff going on." New York Gov. Eliot Spitzer, who said in congressional testimony that he considers bond insurers to be largely within his state's jurisdiction, gave companies in the sector a deadline to do something last week to bolster their flagging ratings, according to a Wall Street Journal article. The governor's office referred queries on the matter to the insurance department. A department spokesman said there is "no actual deadline" and that the period mentioned reflected state officials' expectations about when some action should be taken, ideally "as soon as possible." Standard & Poor's, in updating several bond insurer ratings Monday, affirmed some of Ambac's, citing "the scope of Ambac's capital-raising plans and the company's ability to implement those plans," but left them on CreditWatch with negative implications.