Ambac to float $1.5 billion in offerings

In a last-ditch effort to save its triple-A ratings, Ambac Financial Group Inc. yesterday said that it would offer $1.5 billion in public offerings. The New York-based municipal bond insurer has spent the last few weeks in talks with insurance regulators and Wall Street banks on methods to raise capital and preserve its triple-A credit ratings. Ambac’s decision to raise the capital through a $1 billion common stock offering, plus a $500 million public offering of equity units, follows the insurer’s abandonment of the plan to divide itself in two. Previously, Ambac had been considering dividing itself into two entities: One would guarantee muni bonds, while the other would cover the riskier structured finance business. The insurer was also reportedly in talks with eight banks, including Citigroup and UBS, to float the company at least $2 billion in capital. “This capital raise, along with our recent strategic actions, our increased emphasis on risk-adjusted returns over the course of an economic cycle and a six-month suspension of the structured finance business, will strengthen our capital base,” Michael Callen, chairman and chief executive of Ambac, said in a statement.