Ambac Not Likely To Split Bond Insurance Business

Bond insurer Ambac Financial Group Inc is unlikely to announce a capital raising deal on Tuesday.

The second largest U.S. bond insurer is looking to raise capital to maintain top credit ratings at its main unit. Talks on finding a solution are continuing, but will not likely be concluded on Tuesday, the person briefed on the matter said.

Both Moody's Investors Service and Standard & Poor's are considering stripping Ambac Assurance Corp, Ambac's main insurance unit, of its top ratings.

The Financial Times reported on Tuesday that Ambac was not planning to split up its bond insurance businesses. Many bond insurers are thinking about dividing up the relatively risky structured finance guarantee business from the safe municipal bond insurance business.

CNBC reported on Tuesday that Ambac was progressing toward a deal, but had not yet reached an agreement.