boosted its loss reserves for Puerto Rico exposures during the first quarter asthe bond insurer's president and CEO reiterated that he is "deeplytroubled" by the push by the commonwealth's government "for defaultsand moratoriums"on various outstanding obligations.
Speakingduring a conference call, Nader Tavakoli said he is pleased with the progressAmbac has made in taking a "more urgent and proactive approach to risk andloss mitigation," particularly involving its distressed exposures. But heexpressed concern about the Puerto Rico government's response to its debtcrisis.
"Thelast thing Puerto Rico should be doing is destroying consumer and investorconfidence as they are doing now," Tavakoli said. He further accusedPuerto Rico Gov. Alejandro Garcia Padilla and his advisers of engaging in aneffort to "gain leverage over creditors" in a manner that will be "incrediblydestructive to the long-term interests of Puerto Rico and its people."
Ambacand other bond insurers filed suit against the Puerto Rico governor earlier in2016 in response to the commonwealth's allegedly illegal clawback of certainrevenue. Its exposure to Puerto Rico public finance credits totaled $2.16billion in net par outstanding as of March 31, the company said in its10-Q.
Tavakolisaid that the company would continue to aggressively protect its interests inPuerto Rico as highlighted by the May 10 filing of a that seeks the appointment of areceiver for the Puerto Rico Highways and Transportation Authority, followingcertain April transactions that allegedly had the effect of"siphoning" money away from the agency.