Ambac shares fall below NYSE listing standards

AP News
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Posted: Dec 09, 2009 5:55 PM

Bond insurer Ambac Financial Group Inc. said Wednesday it was notified by the New York Stock Exchange that it has fallen below listing standards.

Companies must maintain an average closing price of $1 per share over a consecutive 30 days to remain listed.

As of Dec. 8, Ambac's average was 94 cents per share.

Under the stock exchange's rules, Ambac has six months to bring its share price and 30 trading-day average price back above $1 to stay listed.

Ambac's common stock will continue to be traded as long as Ambac remains in compliance with other listing requirements.

New York-based Ambac's stock traded over $95 a share just two years ago. The company was battered by turmoil in the bond market last year.

For years it made tidy profits backing billions in municipal bonds that rarely defaulted and paid steady dividends, with little risk. When the housing market boomed, and lenders started issuing riskier mortgages, investment banks packaged them into complex bonds. For insurers like Ambac and several competitors, the new bonds were an opportunity to generate outsize returns of their own.

But when the housing bubble burst and mortgage defaults spiked, the assets underlying the bonds lost value, increasing the likelihood of issuer default and claims on bond insurance _ putting once rock-solid bond insurers in hot water.

Ambac shares closed unchanged at 82 cents. They fell 2 cents in after-market trading.