Fitch Rates Ambac's Junior Hybrids 'AA-'; Outlook Stable.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch assigns an 'AA-' rating to Ambac Financial Group Ambac Financial Group (NYSE: ABK) is an American Insurer of bonds, including municipal bonds. Ambac Financial Group, Inc. (NYSE: ABK) is a holding company whose subsidiaries provide financial guarantee products and other financial services to clients in both , Inc.'s (NYSE NYSE See: New York Stock Exchange :ABK ABK Abkuerzung (German: Abbreviation) ABK Anybody Killa (musician) ABK Ahli Bank of Kuwait ABK American Bank of Kosovo ABK Aphakic Bullous Keratopathy (ophthalmology) ) (Ambac Financial Group) $400 million Directly-Issued Subordinated Capital Securities (DISCS) due Feb. 7, 2087. Fitch also affirms the Ambac Financial Group 'AA' Long-term Debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. Rating and the 'AAA' insurer financial strength (IFS) ratings of Ambac Assurance Corp., Ambac Assurance UK Ltd., and Connie Lee Insurance Co. The Rating Outlooks for all entities are Stable. The notes will pay a fixed rate of interest until Feb. 15, 2037 and pay interest at an annual floating rate based on one-month LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 1.835% thereafter. Ambac Financial Group has the right to defer interest for up to 10 consecutive years. The notes may be redeemed by Ambac Financial Group on or after Feb. 15, 2037 at par plus any accrued and unpaid interest, or before Feb. 15, 2037 if certain changes occur in tax laws or rating agency treatment subject to certain make whole provisions. Based on Fitch's hybrid rating criteria published on Sept. 27, 2006, the notes have a high equity component. Fitch has assigned a class D designation to those notes that will allocate 75% of the principal to adjusted equity and 25% to adjusted debt in evaluating the financial leverage of Ambac Financial Group. Key features supporting the equity credit class of the notes include the junior subordinated ranking, 10-year deferral period, and a long maturity with no put provision. While Ambac can redeem the notes in 30 years, the securities have a replacement capital covenant not to redeem the notes prior to 2067 unless replaced by the issuance of similar equity-like securities. Ambac's proforma equity-credited adjusted leverage of 15.2% at Dec. 31, 2006 is well within the range for an 'AAA' rated financial guarantor. Ambac's debt servicing capability is strong and supported by capacity from its primary financial guaranty subsidiary, Ambac Assurance Corporation Ambac Assurance Corporation A subsidiary of publicly traded Ambac Financial Group that provides financial guarantees for municipal borrowers and for asset-backed and structured issues. . Ambac intends to use the proceeds of the hybrid issuance to repurchase common stock. Fitch rates the following: Ambac Financial Group, Inc. --$400 million Directly-Issued Subordinated Capital Securities 'AA-'. Fitch affirms the following with a Stable Outlook: Ambac Financial Group, Inc. --Long-term Debt Rating at 'AA'. Ambac Assurance Corp. Ambac Assurance UK Ltd. Connie Lee Insurance Co. --Insurer Financial Strength at 'AAA'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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