Ambac Financial Adds 10% After Its Unit Settles Claims With Bank Of America

(RTTNews) - Shares of Ambac Financial Group (AMBC) are rising more than 10% Friday morning after the company said Ambac Assurance Corporation, a unit of the company has signed an agreement with Bank of America to settle claims related to residential mortgage-backed securities for $1.84 billion.

Ambac expects a gain of about $390 million related to the settlement as the current $1.84 billion exceeds the amount of subrogation recovery recorded on Ambac's second quarter earnings release.

Claude LeBlanc, President and Chief Executive Officer, stated, "Ambac is very pleased to have reached this settlement with Bank of America, which materially advances our strategic priority to progress AAC to a stable runoff and further maximizes optionality for our legacy financial guaranty business."

AMBC, currently at $14.08, has traded in the range of $7.24-$17.86 in the last 1 year.