Ambac Goes After Citigroup Over $2B In CDS

Law360, New York (August 6, 2009, 3:28 PM EDT) -- Ambac Credit Products LLC has sued Citigroup Inc. and Credit Suisse Alternative Capital Inc. for allegedly misleading Ambac into assuming $2 billion in potential liabilities associated with mortgage-backed securities from Citigroup through credit default swaps.

According to a complaint filed Monday in the Supreme Court of the State of New York, Ambac entered into a series of CDS in 2007 under which it agreed to cover losses to the senior tranche of a mortgage-backed collateralized debt obligation known as Ridgeway II created by Citigroup.

Through the...
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