Ambac Financial GroupFinancial Group, Inc, united by 29 April 1991, is primarily a holding company, through its subsidiaries, issues bank guarantees and financial services to clients in the public and private sectors around the world. Ambac Financial Group's activities are divided into two business segments: financial guarantees and financial services. The financial guarantee segment provides financial guarantees (including credit derivatives) for public finance, structured finance and other liabilities. Financial services segment investment agreements, financing of pipelines, interest rate, total profit and currency swaps, mainly for clients from financial business a guarantee, which includes municipalities and other state structures, healthcare organizations, owned by investors, utilities and asset issuers. For the year, ended 31 December 2008 the year the company stopped writing new investment agreements and derivative products in its financial services segment. His current agreement of investment portfolios and derivative products are in active stock, which may include endings deals, settlements, Restructuring, transmission and natural loss, as maturity contracts.
Ambac Financial Group provides financial guarantee insurance for government and structured financing liabilities for its main subsidiary operating Ambac Financial GroupAssurance Corporation (Ambac Financial GroupAssurance).Ambac Financial GroupAssurance has two financial guarantees, insurance of operating subsidiaries, Ambac Financial GroupAssurance UK Limited (Ambac Financial GroupВеликобритания) and Everspan Financial Guarantee Corporation (Everspan). Ambac Financial Group UK provides a range of obligations in the international markets, including financing infrastructure, securitization of assets, secured by debt obligations (EVERY), communal obligations, all business securitization transactions (securitization of almost all production assets of the corporation) and other obligations, generally in Western Europe. Everspan is a financial guarantee of an insurance company and is in stock.
Segment financial guarantees
Financial guarantees segment includes insurance of financial guarantees and other credit enhancement products, such, as credit derivatives. Financial guarantees insurance provides an unconditional and irrevocable guarantee, which protects the owner with a fixed income obligation in relation to non-payment of debt and interest on time. As a matter of fact, Ambac Financial GroupAssurance and its subsidiaries make payments, if the debtor is responsible for the payments cannot do so. Ambac Financial GroupAssurance and its subsidiaries serve the global capital markets by providing financial guarantees for public finance insurance and structured financing of liabilities, in some floating rate insured transactions, the issuer or ultimately the debtor of the insured securities is a participant in an interest rate swap, that hedges your interest rate risk, actually creating synthetic fixed liabilities. In such transactions, Ambac Financial Group Assurance has, occasionally, insurance payment of the debtor of its obligations under the interest rate swap contract, including some, but not in all cases is obliged to terminate the payment upon the occurrence of certain events of the specified termination.
Ambac Financial GroupAssurance and its subsidiaries provide a guarantee or credit protection for obligations, already carry out insurance from other financial guarantors, with Ambac Financial GroupAssurance are obliged to pay only by default, as the main debtor and the original financial guarantor. On 31 December 2008, Ambac Financial Group provided loan protection for $ 1,4 billion dollars in outstanding par of these obligations, primarily through the issuance of credit derivatives. Ambac Financial GroupAssurance has guaranteed deals, which put the company at risk, which may not be associated with credit risk, for example, market risk, related to weather or other natural disasters, mortality or other property and accident insurance characteristics of the type of risk.
Alternatively, financial guarantee insurance, credit protection was provided by Ambac Financial Group Loan Products LLC (Ambac Financial GroupLoan Products), subsidiary of Ambac Financial Group Assurance, in credit derivatives. Ambac Financial Group Assurance secures Ambac Financial Group's commitments Loan products under these operations. These credit derivatives, who privately signed contracts, provide the counterparty with credit protection against the occurrence of a specific event, for example, default payment or bankruptcy, related to core obligations. Virtually all of Ambac Financial Group's loan product derivative contracts involve structured finance transactions. As part of its refocusing business strategy, Ambac Financial Group has decided to stop performing credit transactions by raising the credit swap format by default. Nevertheless, Ambac Financial Group may restructure or hedge derivatives format transactions in order to mitigate the impact of a loss and / or by improving its position in relation to existing credit risk carriers.
Guaranteed financial products are sold in three main markets: US open market finance, United States and structured finance and asset market, and on the international financial market. 31 December 2008, Ambac Financial Group's portfolio in the U.S. $ 238 billion, what constitutes 55% of the net par of Ambac Financial Group in circulation. It consists of the United States municipal issuance, including general obligations, lease and tax liabilities support, healthcare, housing construction, communal services, transport and higher education, as well as some infrastructure privatization deals, such, as toll roads and bridges financing, public transport financing, financing of the stadium, military housing and student housing. As of 31 December 2008, Ambac Financial Group's US portfolio of structured exposure finance amounted to $ 140 billion, what constitutes 32% of the net par of Ambac Financial Group in circulation. Sectors included mortgage securitization transactions, loans for residential real estate, car loans, student loans, credit card debt, rent, operating assets and debt, where most of the major collateral risks are in the United States. As of 31 December 2008 year, the company's portfolio in the international exposition amounted to $ 56 billion, what constitutes 13% from the net par Ambac Financial Group in circulation. Ambac Financial Group's existing international finance exposition includes a range of commitments in international markets, including infrastructure financing, asset management of debt securitization, communal obligations, all transactions for the securitization of business and other liabilities.
Financial services segment
Financial Ambac Financial Group Services segment provides financial and investment products, including investment agreements, derivative products (interest, currency swaps and total profits) and financing channels for main clients financial guarantees of business. The financial services portfolios received financial support from both the Ambac Financial Group Assurance and the Ambac Financial Group financial group in 2008 year in the form of loans and the acquisition of invested funds. Ambac Financial Group terms of investment agreements, including repurchase agreements, primarily for issuers of asset-backed securities and structured debt financing, And, to a lesser extent, municipal issuers through its subsidiary, Ambac Financial GroupCapital financing. Investment agreements, used in structured finance to provide a guaranteed return on investment tailored to meet expected and potential cash flow needs. Investment agreements are used by municipal bond issuers to invest proceeds from the sale of bonds, while such income can be used for their intended purpose, for example, construction financing. The investment agreement provides for a guaranteed return of the main invested, as well as interest payments on it at a guaranteed rate and have the same ratings from Ambac Financial GroupAssurance.
Ambac Financial Group Securities Inc. 'The main business will serve as an agent and dealers for securities, issued by Ambac Financial Group Capital Financing Private Placement Operations. Ambac Financial GroupSecurities, brokerage and dealer activities. The main activities in the derivative business products are the mediation of interest rates and foreign exchange transactions “swap” (through Ambac Financial Group financial services) and taking into account the total income, swap places (через Ambac Financial GroupCapital Services) undertaking certain fixed income obligations. All derivatives provided by Ambac Financial Group Financial Services and Ambac Financial Group Capital Services guarantee Ambac Financial Group Assurance through a policy, securing their obligations to counterparties of the derivative.
As of 31 December 2008 the consolidated investment of Ambac Financial Group had a total fair value of approximately 10,3 billion. Doll. US and the aggregate amortized cost of about 12,8 billion. Doll. USA. As of 31 December 2008 years investments financial guarantees portfolio total fair value of approximately 7,7 billion. Doll. US and the aggregate amortized cost of about 9,4 billion. Doll. U.S. Investment Policy Ambac Financial Group Assurance is, aimed at achieving diversification of their portfolio and only allows investments with fixed income securities.
The company competes with Financial Security Assurance Inc. (FSA guarantees), and assured by Warranty Corporation (guaranteed guarantee).
