The State of Wisconsin, Office of the Commissioner of Insurance has approved Ambac Financial Group up to $1 billion in future inter-company asset sales and secured lending transactions between Ambac Assurance and its investment agreement business affiliates.
When combined with an existing approval of $200 million in secured lending transactions, Ambac Financial has said that it expects the inter-company asset sales and secured lending transactions to enhance the liquidity within its financial services segment.
Any transactions undertaken pursuant to these approvals will be executed on an arms-length basis and in accordance with Ambac Assurance’s investment guidelines.
Ambac has said that it is reducing its exposures in this sector. Current projections of the investment agreement liability balance result in a reduction of 50% in five years, from a balance of $6.7 billion at June 30, 2008.
Sean Leonard, CFO of Ambac, said: I am pleased with the support that we have received from the Office of the Commissioner of Insurance as we seek an orderly reduction of risk in our financial services business. Increased financial flexibility will enable us to maximize the value of all the assets supporting our guaranteed investment contract liabilities.