Bond Insurer Takes $1B Mortgage Hit

Ambac Financial Group, whose guarantees stand behind billions of dollars worth of subprime asset-backed securities, lost $1.6 billion in the first quarter, blaming its problems on the company's "direct exposures" to the mortgage-backed securities market. At deadline time, the company's shares were trading down 38% to $3.73 a share, reaching a new 52-week low. (Its high was $96.) The New York-based Ambac took a $1 billion writedown in the quarter on its mortgage guarantee business. It also took a noncash charge of $1.7 billion to cover losses on credit derivatives. Commenting on the results, company chief executive Michael Callen noted that, "The housing market crisis continues to disrupt the global credit markets, and our credit derivatives and direct mortgage portfolios were severely impacted once again." The company can be found on the Web at http://www.ambac.com.