Banks have bought $500m of shares in Ambac as part of an agreement to provide a backstop to the troubled bond insurer's $1.5bn equity raising plan, completed this week to protect its vital triple-A credit ratings.

The shares are divided among the underwriters of the $1.5bn deal, which include Credit Suisse, Citigroup, Bank of America, UBS and Dresdner Kleinwort. Two banks - BNP Paribas and Royal Bank of Scotland - bought shares through a $95m private placement, an Ambac spokesman said.