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Monolines

Banks to aid Ambac with up to $3bn

By Aline van Duyn and Ben White in New York

Published: February 22 2008 20:55 | Last updated: February 23 2008 00:20

A group of banks is preparing to inject $2bn to $3bn into the troubled bond insurer Ambac, which is racing against time to come up with fresh capital to avoid a sharp cut in its triple-A credit rating that could trigger wider financial market turmoil.

The money from banks would be part of a plan to split Ambac’s operations, people involved in the discussions said.

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