Ambac Disputes Report Calling Assets for Puerto Rico Overstated

Ambac Financial Group Inc. said it disputes a report by CreditSights Inc. that the insurer’s calculation of its claims-paying resources overstates assets available to pay bondholders if Puerto Rico defaults.

The analysts said in a report Wednesday that the amount an Ambac unit has to cover investor losses in Puerto Rico falls to $1.8 billion -- instead of the $4.8 billion stated by the company -- when accounting for certain adjustments. The estimates exclude assets of a U.K. unit and were based on conversations with an insurance regulator in Wisconsin, analysts Rob Haines and Josh Esterov wrote. Ambac has backed $2.4 billion of commonwealth debt.

“The information that we’ve presented publicly through our operating supplement, financial filings, we’re completely comfortable with that information, as well as the stability and quality of our claims-paying resources,” David Trick, chief financial officer of Ambac Assurance, said in a conference call with analysts Thursday.

It’s unclear to whom CreditSights spoke at the Wisconsin office, said Nader Tavakoli, interim chief executive officer of Ambac Financial. “I can tell you that it wasn’t anybody that is of any significance in terms of the policy decisions made.”

Ambac said all July 1 payments due on Puerto Rico bonds it guarantees were paid in full by the issuer.

Esterov said CreditSights didn’t have an immediate comment on Ambac’s statements. He and Haines have an “underperform” recommendation on the insurer’s obligations.

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