Ambac Financial Group Inc
Ambac, which has suffered large losses after guaranteeing billions of dollars worth of risky repackaged subprime mortgage bonds, posted a loss of $2.34 billion, or $8.14 a share.
That was narrower than the year-earlier loss of $3.27 billion, or $32.03 per share, which included record writedowns for credit derivatives positions linked to assets including mortgages.
While our financial results continue to be affected by the disappointing housing market and other economic conditions, I am encouraged by the progress made in relation to some of our strategic alternatives, Chief Executive David Wallis said in a statement.
Wallis said the new municipal bond insurer being formed by Ambac -- Everspan Financial Guarantee Corp -- expects to begin doing business in the second quarter.
Ambac's larger rival MBIA Inc
Both firms are separating these businesses from the rest of their operations in order to win higher credit ratings, which are crucial to winning business. They lost their top ratings last year after a foray into guaranteeing repackaged debt that triggered massive losses.
Ambac shares, which have lost more than 80 percent of their value in the last five months, were down 3 cents at 98 cents in premarket trading.
(Reporting by Lilla Zuill; Editing by Lisa Von Ahn and John Wallace)