No Wilbur Ross deal for Ambac

Vulture investor Wilbur Ross is investing as much as $1 billion in Assured Guaranty (AGO), a bond insurer that has sidestepped the worst of the questions looming over rivals Ambac (ABK) and MBIA (MBI). Ross will buy $250 million worth of stock now and could buy $750 million more next year, at Assured’s option. He’ll pay at least $21.76 a share for the stake, which is a dollar below Thursday’s closing price, though he could pay more if Assured shares rise Friday and Monday.

The news comes after Ross said publicly he would consider an investment in the financial guaranty business, leading some observers to conclude he was looking to infuse cash into either Ambac or MBIA, which until recently have been at risk of losing the triple-A ratings that allow them to write new policies. At one point a U.K. newspaper reported Ross was close to a deal with Ambac, leading some people to wonder what Ross was thinking. But that deal never came to pass, and investors continue to await confirmation of a bank-led capital infusion of Ambac that has been reported this week. 

For his part, Ross indicated Friday that he sees a bright future at Assured, which unlike its big rivals isn’t seen as painfully exposed to possible losses on mortgage-related securities like collateralized debt obligations.  “We believe that Assured has an excellent opportunity during this time of uncertainty in the financial markets to provide investors with credit enhancement products in both the public and structured finance markets,” Ross said. “We look forward to a long and profitable association with Assured.”