Untouched by Bear Stearns, Ambac shares jump

18 March 2008

Shares in Ambac Financial surged upwards in trading on Tuesday after the company announced in a statement that it has hardly been affected by exposure to beleaguered bank Bear Stearns.

Shares in Ambac experienced nine per cent growth to $5.90 in early trading after it insisted that its financial guaranty and financial services businesses had not been materially affected.

Although Ambac admitted exposure to Bear Stearns through special purpose vehicles, it believes the structure of them will be enough to mean that no material loss will be incurred.

"We believe that we have limited exposure to Bear Stearns and we will continue to monitor it closely. We understand that, in times of market stress, it is particularly important to communicate this information with investors and our other constituents," Michael Callen, Ambac's chairman and chief executive officer, said in the statement.

Ambac said it was reassured that JPMorgan would take over Bear Stearns' liabilities under its interest rate and cross-currency swap contracts.

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