Ambac Takes $5.2B Mortgage-Linked Charge

Ambac Financial Group Inc., New York, has taken a $5.21 billion writedown involving mortgage-related exposures and posted a $3.26 billion quarterly loss, but its executives said in a Jan. 22 conference call that they remain "confident." They said they were confident in part because the company has been offered several unspecified "alternatives" by "strong parties." The executives said the loss included a $1.1 billion reserve set aside to cover mortgage-related exposures. The company had backed away from a plan to raise equity capital on Jan. 18, citing challenging market conditions and rating actions. Fitch recently downgraded several of the company's ratings and put them on Rating Watch Negative.