Saturday, December 15, 2007

A Business I Never Understood-8

"Ambac Financial Group Inc. became the latest bond insurer to improve its capital position, reaching an agreement under which a unit of Assured Guaranty Ltd will reinsure a $29 billion Ambac portfolio. ... The company said it is waiting for the rating providers to conclude their evaluations of the financial guarantors' triple-A credit ratings before announcing the details of this and any other capital-enhancement plans", WSJ, 14 December.

Why is Ambac waiting? Why does Ambac care what the rating agencies do? This reinsurance agreement appears to be 8-K reportable. It should be an interesting read. Its' terms should be revealing. Mike Shedlock (MS) has an excellent post on this at, 14 December. I have nothing to add to MS's post. Take a look, enjoy.

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