ABK deal

Discussion in 'Trading' started by niceneasy, Mar 5, 2008.

  1. seems like they must be buying time - this doesnt strike me as a solution will just buy them some time... they have no revenue and have been bailed out and have agreed they dont even know how much money they lost in early 2008? If this is AAA i'd hate to see what "A" looks like.

  2. well, since you asked. my thought is that this company has been spared a downgrade for many weeks now, (due to the strong arm tactics of the fed/treasury), in hopes of the banks working out a deal. After many weeks and a failed first atempt, we get a final solution of "we're going to raise capital through a stock offering".

    I like to at least imagine that I can think outside the box. What I see is a multi-week period that these guys have bargianed to find a solution, and have failed to do so. That is why the solution offered is a stock sale. The banks won't touch this shit, you figure out how bad that really is, regarless of what they say.
  3. the issue has been subscribed and if the buyers back out - the banks will cover it. so the banks are in..
  4. bt116


    I think the fact that ambac is still aaa shows once again how freaking useless the ratings agencies are. they'll throw up that 'negative watch' crap. How good is a aaa credit if the only thing holding it up is a future bailout? It's pretty rediculous.
  5. BigE


    I honestly believe that ABK has more to say and prove about what their plans are in the near future to keep their triple A ratings. The rating agencies have pressured Ambac to raise the capital in order to continue doing business and so Ambac has come up with some kind of plan to meet expectations and please investors. We have to understand that this company and other major bond insurers, like MBIA, cannot fail because it will destroy the market as a whole. We've seen the market make big comebacks in a matter of minutes because Ambac has provided them with some good news the past week. I believe that a large amount of money has been injected in this company and they will come out and announce that in the next few days or so. Today's announcement was part of their plan and was probably a distraction to buy them some more time.