Ambac files for bankruptcy

US bond insurer Ambac Financial Group filed for Chapter 11 bankruptcy yesterday citing liabilities of $1.68bn (£1.04bn). Its shares plummeted in after-hours trading to $0.20 down from $0.52 at their close on the Wall Street. Ambac failed after chasing higher profits by insuring riskier debt. The move backfired when the housing market crashed and credit markets tightened. Ambac said it was unable to raise capital and failed to reach an agreement with senior bondholders that would have allowed it to restructure through a prepackaged bankruptcy deal.