Ambac insuring $264 million for Air Force project including Travis AFB

Associated Press
Ambac insuring $264 million for Air Force project
Associated Press 07.11.08, 3:49 PM ET


NEW YORK -
Bond insurer Ambac Financial Group Inc. said Friday it is insuring a $264 million privatization of 3,500 Air Force housing units.

The project to privatize 3,500 existing single-family and townhouse-style housing units will take place at three separate bases. Ambac (nyse: ABK - news - people ) is collaborating with the Air Force, Balfour Beatty Construction Co., and Capmark Finance.

The bases involved include Fairchild Air Force Base in Spokane, Wash., Tinker Air Force Base in Oklahoma City, Okla., and Travis Air Force Base in Fairfield, Calif.

At the end of the seven-year development period, the financing will provide 2,400 new and rehabilitated homes for service members and their families at the bases, Ambac said.

The project will include $264 million in taxable mortgage loans insured by Ambac. In addition to the insured loans, other sources of funds will include a $137 million subordinate loan provided by the Air Force; an equity contribution of $14 million from the developer; a $6 million equity contribution from the Air Force, and net operating income and interest earnings during the development period.

Shares of Ambac rose 8 cents, or 5 percent, to $1.68 in afternoon trading.