Ambac Rocky Balboa oder chapter 11

rating agencies pushing for outside investment to support the
unit's proposed top ratings. For details see [ID:nN11519756]. "Overall, results were poor and reflected the continued
deterioration of the company's structured finance book of
business," said Rob Haines, analyst at research firm
CreditSights. "Ambac has a policyholder surplus that we're concerned
about, which I would argue is dangerously close to the
regulatory minimum," he added. Ambac said on a conference call that it could petition the
Wisconsin insurance regulator for permission to free up
contingency reserves, which could boost capital by around $700
million. The company may also be able to reverse much of the capital
loss it took in the first quarter to downgraded debt if
proposals to remove requirements to mark mortgage debt to their
distressed market valuations are adopted, said spokesman Peter
Poillon. Ambac's bond insurance unit, Ambac Assurance Corp, has been
decimated by its exposures to residential mortgage-backed debt,
which includes protection sold on the securities through
Collateralized Debt Obligations (CDOs). Ratings downgrades of the risky securities caused the
insurer's policyholder surplus, which is the excess of assets
insurers hold over legal obligations to pay for policy
liabilities, to drop to $394 million in the quarter, from $1.6
billion at the end of the prior quarter. Most of the fall was due to Moody's Investors Service
downgrading a number of Alt-A residential mortgage-backed
securities to junk, which triggered a requirement for Ambac to
value the securities at their market levels, said Haines. Moody's also last month cut its ratings on Ambac Assurance
into junk territory, citing higher loss estimates for Ambac's
portfolio of residential mortgage-backed securities (RMBS),
which includes debt held for investment and guarantees the
company has sold on the securities. While the company's resources to pay claims remain above
the rating agency's expected losses, "this cushion has been
significantly eroded, and losses in more severe stress
scenarios would exceed available resources," Moody's said. Ambac now insures $49.4 billion in net par volumes of
junk-rated debt, up from $42.6 billion in the fourth quarter of
2008 and from $16.7 billion in the first quarter of 2008,
analysts at Barclays Capital said in a report on Monday. "We remain concerned about the potential for further
incurred losses, particularly from the company's RMBS and CDO
exposure," they added. As losses and downgrades continue, Ambac may face further
pressure and risk breaching regulatory minimums. "The statutory minimum is $65 million, they're still in
excess of it but you don't want to be that close," said
CreditSights' Haines. "Ambac's Everspan strategy has been effectively shut down
by the rating agencies, which means barring an outside capital
injection Ambac is likely headed towards run-off mode," he
said.
(Editing by James Dalgleish)

other U.S. ABS classes that benefit from full financial guarantees from Ambac.
Most of these classes are backed by student loan collateral, and any rating
actions related to these classes will be discussed in a separate press
release. For each affected class, Ambac provides a full financial guarantee
insurance policy guaranteeing full payments of principal and interest to the
noteholders. Under our criteria, the issue credit rating on a fully credit-enhanced bond
issue is the higher of the two ratings: the rating on the credit enhancer or
the Standard & Poor's underlying rating (SPUR) on the class. A SPUR is our
opinion of the stand-alone creditworthiness of an obligation--that is, the
capacity to pay debt service on a debt issue in accordance with its
terms--without considering an otherwise applicable bond insurance policy. We placed 39 of the 63 ratings being lowered on CreditWatch with negative
implications. These 39 ratings affect 26 student loan classes, 12 rental car classes, and
one auto loan class. The additional 24 lowered ratings affect 11 manufactured
housing classes, nine auto loan classes, and four student loan classes. We also
placed our ratings on 12 classes related to one student loan issuer on
CreditWatch with negative implications Lastly, we affirmed 106 ratings on 103 student loan classes and three auto
loan classes.
RATINGS LOWERED
Capital One Auto Finance Trust 2006-A                            Rating
Collateral   Series   Class   To     From
Auto Loan    2006-A   A-4     BBB    A
Capital One Auto Finance Trust 2007-A
Auto Loan    2007-A   A-3-A   BBB    A
Auto Loan    2007-A   A-3-B   BBB    A
Auto Loan    2007-A   A-4     BBB    A
Triad Automobile Receivables Trust 2006-C                   Rating
Collateral   Class   To     From
Auto Loan    A-3     BBB    A
Auto Loan    A-4     BBB    A
UPFC Auto Receivables Trust                            Rating
Collateral   Series   Class   To     From
Auto Loan    2006-B   A-3     BBB    A
Auto Loan    2007-B   A-2     BBB    A
Auto Loan    2007-B   A-3     BBB    A
CountryPlace Manufactured Housing Contract Trust                                      Rating
Collateral             Series   Class   To     From
Manufactured Housing   2005-1   A-2     BBB    A
Manufactured Housing   2005-1   A-3     BBB    A
Manufactured Housing   2005-1   A-4     BBB    A
Manufactured Housing   2007-1   A-2     BBB+   A
Manufactured Housing   2007-1   A-3     BBB+   A
Manufactured Housing   2007-1   A-4     BBB+   A
Origen Manufactured Housing Contract Trust 2006-A                                      Rating
Collateral             Series   Class   To     From
Manufactured Housing   2006-A   A-1     BBB    A
Manufactured Housing   2006-A   A-2     BBB    A
Origen Manufactured Housing Contract Trust Collateralized Notes 2007-A                                      Rating
Collateral             Series   Class   To     From
Manufactured Housing   2007-A   A-1     BBB    A
Manufactured Housing   2007-A   A-2     BBB    A
Origen Manufactured Housing Contract Trust Collateralized Notes 2007-B                                      Rating
Collateral             Series   Class   To     From
Manufactured Housing   2007-B   A       BBB    A
National Collegiate Student Loan Trust 2007-3 (The)                              Rating
Collateral     Series   Class   To     From
Student Loan   2007-3   A-IO    BBB+   A
National Collegiate Student Loan Trust 2007-4 (The)                              Rating
Collateral     Series   Class   To     From
Student Loan   2007-4   A-IO    BBB+   A
California Education Facilities Authority 1998                     Rating
Collateral     Class   To     From
Student Loan   Sr      BBB    A
Missouri Hgr Ed Ln Auth 1988A                     Rating
Collateral     Class   To     From
Student Loan   1988A   BBB    A