Ambac looks to banks for bail out

Ambac Financial Group Inc. has been pursuing a $3 billion aid plan with a group of prominent investment banks in order to mend a debilitating credit downgrade. The process could come to a favorable conclusion for the bond insurer early this week, according to published reports. The banks, which include such prominent names as Citigroup, UBS, Wachovia and Barclays, hope to bolster the ailing insurer so it may regain its valuable AAA Fitch rating. The company was downgraded in early February. Investment banks invest billions in structured investment products, and stand to lose from a credit downgrade because they use companies such as Ambac to insure their investments and hedge their risk.