Ambac Financial Group (ABK) yesterday announced that it has received notice from New York Stock Exchange (NYSE) that the company has breached the bourse’s listing standard with regard to its share price.
 
The NYSE requires companies to maintain an average closing price of at least $1 over 30 days. However, Ambac fell short of this requirement as its 30 trading-day share price averaged 94 cents on the day prior to the receipt of the notice on Dec 9, 2009.
 
As per NYSE’s rules, Ambac has six months to haul up its 30 trading-day average share price back above $1 to stay listed. However, the company’s common stock will continue to trade on the NYSE as long as Ambac remains in compliance with other listing requirements.
 
The company, which used to only insure municipal bonds, delved into structured products when the market was booming. However, the subprime mortgage crisis stung the bond insurer badly since its onset, robbing investors of confidence and contributing to the slump in the company’s share price. The stock declined rapidly from $94 range in mid 2007 to $10 range in early 2008. Since then, the stock has gone into free fall. 
 
Ambac has been neck deep in trouble for quite some time. It has suffered multiple rating downgrades from Jun 2008 through Aug 2009. Its principal operating subsidiary Ambac Assurance rating stands at Junk status, “CC”. The financial strength rating downgrades have adversely impacted Ambac’s ability to generate new business and have negatively affected its operating and financial results.
 
In its third quarterly filing, Ambac declared that it is facing liquidity constraints. The company is seeking to address the issue. However, if it is unable to do so, it may file for bankruptcy.
 
The deepening credit crisis has led the NYSE to de-list most companies in five years for falling below standards or going bankrupt as their shares crumble.
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