Last week, Ambac Financial Group (ABK) announced that its chief operating unit Ambac Assurance expects to report estimated impairment losses on credit derivatives of $4.9 million. This will be an increase of $1.6 billion during the quarter. The expected write downs on the credit derivatives portfolio is a result of falling values of underlying collateral within the collateralized debt obligations of asset-backed securities.

The unit will also incur about $800 million in statutory loss and loss expenses in the period. The statutory loss and loss expenses relate primarily to deterioration in Ambac Assurance’s second-lien and Alt-A mortgage-backed securities financial guarantee portfolios. The impairment loss is expected to reduce Ambac's statutory capital and surplus.

At the end of March, Ambac Assurance had $372.8 million in statutory capital and surplus. With $1.6 billion in extra impairments from the second quarter, the unit would have negative statutory capital and surplus of

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For Immediate Release

Chicago, IL – July 13, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Broadcom Corp. (BRCM), Emulex Corp. (ELX), Primus Guaranty, Ltd. (PRS), Ambac Financial (ABK) and MBIA (MBI).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

Broadcom Stops Pursuing Emulex

Broadcom Corp. (BRCM) yesterday dropped all efforts to acquire Emulex Corp. (ELX) after the latter rejected its revised acquisition offer. Broadcom had earlier raised its hostile bid to acquire all outstanding shares of rival Emulex from $9.25 per share to $11.00 per

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Primus gains scale through CypressTree acquisition Primus Asset Management, Inc. (PAM), a wholly owned subsidiary of Primus Guaranty, Ltd. (PRS), announced the closure of the acquisition of CypressTree Investment Management, LLP on July 9, 2009. We view this acquisition as positive for PRS as it will gain more scale with a leveraged platform. With approximately $2.4 billion of assets under management, CypressTree will operate as a wholly-owned subsidiary of PAM. The nature of CypressTree’s business is managing leveraged loans and high yield bonds among various other investment products, including collateralized loan obligations (CLOs), collateralized swap obligations (CSOs), off-shore funds and separately managed accounts. Following the acquisition, PAM now has over $25 billion in assets under management in structured credit vehicles. Focusing on the single niche area of credit swaps, Primus is able to maintain lean operations and leverage its employee base while growing its business. ...

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While we remain negative over all, we would note our outlook has begun to improve a bit around the edges given the comparatively limited downside potential remaining for certain entities.

The financial markets and financial stocks in particular have experienced a significant percentage-point lift following the pending modification to the mark-to-market accounting rules (an artificial adjustment to capital) and the announcement for the Public Private Investment Partnership (PPIP) -- though we would point out that there is nothing of note to what was proposed approximately two months ago, we will soon find out if the issues with the securities in question were based on the buyers or sellers being out of whack, or a question of valuation or solvency.

Since the Troubled-Asset Relief Program (TARP) is effectively out of money -- more than $665 billion out of $700 billion has already been used -- we would currently expect nearly $2.0 trillion needed

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Highlighted stocks include Huntington Bancshares Inc. (HBAN), MGIC Investment Corporation (MTG) and MBIA Inc. (MBI). While we remain negative over all, we would note our outlook has begun to improve a bit around the edges given the comparatively limited downside potential remaining for certain entities.The financial markets and financial stocks in particular have experienced a significant percentage-point lift following the pending modification to the mark-to-market accounting rules (an artificial adjustment to capital) and the announcement for the Public Private Investment Partnership (PPIP) -- though we would point out that there is nothing of note to what was proposed approximately two months ago, we will soon find out if the issues with the securities in question were based on the buyers or sellers being out of whack, or a question of valuation or solvency.Since the Troubled-Asset Relief Program (TARP) is effectively ...

Highlights include MGIC Investment Corp. (MTG), Ambac Financial (ABK), MBIA (MBI) and PMI Group (PMI).MGIC Investment Corp.'s (MTG) recent announcement resulted in more than a 40% inter-day decline in the shares -- now more than 95% lower than when we placed our Sell recommendation on the shares on December 21, 2007.The mortgage insurance business remains under pressure as fewer financial institutions are unwilling to make or refinance loans not under government programs without requiring the borrowers to have a "reasonable amount of skin in the game." This is a trend that may not change quickly, as valuation for securities remains significantly curtailed. Therefore, we would expect additional pressure on the shares of companies such as Ambac Financial (ABK), MBIA (MBI) and PMI Group (PMI).On Wednesday, MTG sent notice to the undisclosed holder of its 9.0% ...

While the financial markets and financial institutions in particular have received a lift in recent days, until there is a quality plan to get the financial institutions back on the lending track, this may amount to a bit of irrational exuberance.

Our banking system remains in a fairly frozen state. Financial institutions remain afraid of the potential for additional losses, continue their anaconda grip on lending only exacerbates the problem.

A financial institution's true willingness to lend remains only to "qualified" home buyers. Clearly, the definition of "qualified" has changed dramatically over the past year to mean "pristine credit," or a FICO credit score of 750 or better out of a 300-850 range.

As credit score requirements continue to be ratcheted higher, additional hurdles have been added, though the credit scoring agencies continue to have excessive errors in their data. More times than not, these errors can only be addressed by paying for

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Highlighted stocks include Huntington Bancshares Inc. (HBAN), MGIC Investment Corporation (MTG) and MBIA Inc. (MBI). Even though it appears that financial institutions have moved ahead with respect to the unfreezing of our banking system, they remain reluctant to lend. With financial institutions afraid of the potential of additional losses, their current Anaconda grip on lending only exacerbates the problem. While we continue to see financial institutions advertise their willingness to lend, the hook remains, "qualified" home buyers. Clearly, the definition of "qualified" has changed dramatically over the past year to mean "pristine credit". As credit score requirements continue to be ratcheted higher, additional hurdles have been added. Credit card client "profiling", with respect to their shopping habits, has increased. So by example, you previously shopped at a gourmet grocer and now it's predominately at a Super Target or Wal-Mart. Even though the

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Highlighted stocks include Huntington Bancshares Inc. (HBAN), MGIC Investment Corporation (MTG) and MBIA Inc. (MBI). Even though it appears that financial institutions have moved ahead with respect to the unfreezing of our banking system, they remain reluctant to lend. With financial institutions afraid of the potential of additional losses, their current Anaconda grip on lending only exacerbates the problem. While we continue to see financial institutions advertise their willingness to lend, the hook remains, "qualified" home buyers. Clearly, the definition of "qualified" has changed dramatically over the past year to mean "pristine credit". As credit score requirements continue to be ratcheted higher, additional hurdles have been added. Credit card client "profiling", with respect to their shopping habits, has increased. So by example, you previously shopped at a gourmet grocer and now it's predominately at a Super Target or

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