"Wells Fargo had to dip into the debt service reserve funds, which is never a good sign and could be classified as an event of default.

Bloomberg Reports Ambac (ABK) May Now Have To Deal With A Municipal Bond Issue

[link to www.streetinsider.com]

January 8, 2008 2:22 PM EST

Ambac Financial (NYSE: ABK) may have to worry about a municipal bond issue because of a notice Wells Fargo (NYSE: WFC) put out on January 2nd. Bloomberg said, "Wells Fargo had to dip into the debt service reserve funds, which is never a good sign and could be classified as an event of default. While this is not worriesome for bondholders, it is for Ambac Financial as the company insures the bonds."

Withdrawing money from reserve funds is not typically a positive sign. However, if the trustee draws down all of the reserve funds -- the First Tier bonds are insured, by the likes of Ambac Financial.
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