UPDATE 1-Ambac hires Blackstone for restructuring

February 3rd, 2010

NEW YORK, Feb 2 (Reuters) – Troubled U.S. bond insurer Ambac Financial Group Inc (ABK.N) has hired Blackstone Group (BX.N) to help it restructure, according to sources familiar with the matter.

Ambac has said in public filings that it is working on a strategy to address liquidity concerns. The company, like its larger rival MBIA Inc (MBI.N), has struggled to write new business since losing its top-notch AAA credit rating in 2008.

Ambac warned in November that it might be forced to seek bankruptcy protection. It expects that it could run out of cash in the second quarter of 2011, or possibly sooner.

At the time, Ambac said it might pursue strategies including “a negotiated restructuring of its debt through a prepackaged bankruptcy proceeding” as it tries to deal with its liquidity issues.

Blackstone and Ambac declined comment.

Ambac, the world’s second biggest bond insurer, has struggled with a cash crunch after writing down repackaged consumer debt hit by the subprime mortgage crisis.

Ambac’s liquidity is largely dependent on its Ambac Assurance unit’s ability to pay dividends, which it is not able to do and is not expected to do in 2010 either.

Ambac said in November that its primary insurance regulator in Wisconsin has increased its oversight of Ambac Assurance and that the unit has submitted a plan to regulators to detail the steps that it has been taking to reduce its risk exposure.

In an attempt to recover some funds, an Ambac unit earlier this month sued Credit Suisse Securities and a mortgage affiliate for “pervasive and material misrepresentations” on mortgage-backed securities that Ambac insured in 2007.

Ambac has insured over $1 trillion in securities, largely for states and municipalities, since it went public in 1991.

Blackstone, which has immense private equity and real estate assets, also advises companies on M&A and restructuring. It has gotten large assignments like advising companies such as insurer American International Group (AIG.N) on its restructuring.

Ambac shares closed down 1.4 percent at 73 cents on the New York Stock Exchange on Tuesday. Its shares had traded above $94 in May 2007. (Reporting by Megan Davies and Emily Chasan, additional reporting by Caroline Humer. Editing by Robert MacMillan)

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AAA Tipsy Tow helps drivers Sunday

February 3rd, 2010

AAA doesn’t want football fans to fumble when it comes to drinking and driving this Sunday.

The auto club is offering a free tow home for drivers who have been drinking at Super Bowl festivities. Tipsy Tow service will start 6 p.m. Feb. 7 and will run through 6 a.m. Feb. 8.

During this period, drivers, passengers, party hosts, bartenders and restaurant managers can call 1-800-AAA-HELP (1-800-222-4357) to request a free tow home of up to 10 miles. Callers can simply state “I need a Tipsy Tow” to receive the free tow and ride home. The program is open to everyone. You do not need to be a AAA member to take advantage of this service.

“As Super Bowl festivities take place this weekend, we urge partygoers to refrain from getting behind the wheel or in the vehicle with a driver who has been drinking,” said Linda Gorman, public affairs director for AAA Arizona. “Rather, we want party hosts and goers alike to know that they can rely on AAA to get them home safely.”

Tipsy Tow will provide a one-way ride for the driver, one passenger and their vehicle. Services will not be provided to motorists requesting a tow to another drinking establishment, repair facility or any location other than their home. However, in some cases, a tow to a hotel may be allowed if the motorist is, or plans to become, a guest.

Other services that will not be provided include: requests for a vehicle start, flat tire change, gas delivery, “taxi” service and requests to transport more than two people with the vehicle. In addition, motorists can expect to be charged the towing company’s standard rate for trips longer than 10 miles.

A first of its kind and the only free program of its kind in the state, AAA Arizona launched the Tipsy Tow program in mid-2009.

The auto club AAA estimates that a first-time DUI conviction can cost a motorist more than $10,000 in fines, penalties, restitution, ignition interlock installation and maintenance, legal fees and increased insurance costs.

AAA Arizona, the Arizona affiliate of AAA, provides automotive, insurance and auto travel services to nearly 800,000 Arizona members. Annually, AAA’s Emergency Road Service responds to more than 450,000 calls for help on the streets and highways of the state as well as providing insurance, travel, and financial services to AAA members and motorists.

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