The news is just another tasty morsel in the steady trickle of CNBC reports on Ambac's rescue plan. Prior CNBC reports said that the insurer is in talks with private equity firms including Cerberus Capital Management LP and a group of banks, which could include Citigroup Inc. and Wachovia Corp., securing about $3 billion in capital. According to Thursday's report, sovereign wealth funds may be added to the pool, as Dinallo said these investors have also looked at joining in on monoline recapitalization efforts.
The most recent Ambac news comes in the wake of the two other major monolines laying out restructuring plans. First FGIC Corp. announced plans earlier this month to split between its municipal bond business and the riskier structured finance business, then MBIA Inc. earlier in the week called for a split along similar lines as well as a six-month hiatus on writing new structured finance business and a halt on quarterly dividends.
Ambac officials did not return calls, and a New York State Insurance Department spokesman and Cerberus declined to comment. - Michael Rudnick
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