AMBAC FINANCIAL GROUP CONFIRMS SECURED EXPOSURE TO PACIFIC GAS & ELECTRIC
News Release
April 6 , 2001 - New York, NY: Ambac Financial Group, Inc. (NYSE: ABK) (Ambac) confirmed today that it has $68.7 million in secured insured net par exposure outstanding to Pacific Gas & Electric. These bonds are secured by a first mortgage lien. Pacific Gas & Electric (PG&E) filed today for Chapter 11 bankruptcy protection.
Although PG&E has not previously missed a debt service payment on Ambac-insured bonds, interest payments due on secured Ambac-insured PG&E debt total approximately $4.7 million annually. No principal comes due on Ambac-insured bonds until a $1.4 million maturity in 2009. The remainder of the bonds mature between 2022-2026.
"As Ambac has stated previously, the secured nature of this exposure, coupled with the essentiality of the services the company provides, cause us to be confident that the likelihood of any material permanent loss is remote," said Robert J. Genader, President. "However, to accommodate any possible disruption in debt service over the near-term, in December of 2000 Ambac reserved $5 million for California utility exposure," he continued.
In December of 2000 Ambac also disclosed that it has $75.1 million in insured net par exposure outstanding to Southern California Edison. The bonds are also secured by a first mortgage or lien on substantially all of the property and franchises now owned by Southern California Edison.
Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Assurance Corporation is the principal operating subsidiary of Ambac Financial Group, Inc. Ambac Assurance, a leading guarantor of municipal and structured finance obligations, has earned triple-A ratings, the highest ratings available from Moody's Investors Service, Inc., Standard & Poor's Credit Markets Services, Fitch and Rating and Investment Information, Inc. Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK).