Ambac abandons efforts to launch Everspan for now; CEO to retire

By Jennifer Chiou

New York, June 19 - Ambac Financial Group, Inc. announced the postponement of its efforts to launch Everspan Financial Guarantee Corp., adding it will, however, continue to focus on its ongoing loss-mitigation efforts and other new business initiatives.

In light of this decision, Douglas Renfield-Miller, chief executive officer of Everspan and executive vice president of Ambac and Ambac Assurance Corp., announced that he will retire effective Jan. 1, 2010.

Ambac said it had been seeking to launch Everspan in order to write financial guarantee insurance in the public finance market as a separate, stand-alone legal entity.

To launch the business, it was essential that it receive sufficient financial strength ratings to enable Everspan to successfully compete in the targeted market, according to a news release. The company had been looking to raise capital to help achieve these ratings.

On May 11, the company said the process of launching Everspan was delayed due to rating agency concerns over separating it from its parent, Ambac Assurance Corp. At the time, the company said that Everspan has been carefully structured to separate it from Ambac Assurance.

Nonetheless, the agencies already said they would view a minority investment from an independent third party to ensure Everspan's separateness as positive in their ratings decisions.

Ambac, based in New York, is a holding company whose affiliates provide financial guarantees and financial services.

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