S&P Boots AMBAC (ABK, LO, CG, LTR)

After the close of trading today, Standard & Poor’s announced that it is booting Ambac Financial Group Inc. (NYSE: ABK) out of the S&P 500 Index.  The company’s size has gotten too small to be considered on of America’s top 500 by size (let alone by reputation).  As of today’s close of trading Ambac’s market capitalization was roughly $860 million, which gave it a ranking of the lowest market cap of the S&P 500.

Lorillard Inc. (NYSE: LO) will replace Ambac in the S&P 500 after the close of trading on next Tuesday, June 10.  Lorillard is being distributed to the public via a two-tier process first involving the retirement of the tracking stock Carolina Group (NYSE: CG), in exchange for which approximately 62% of Lorillard’s common stock will be issued; and second an offer in which shares of S&P 500 constituent Loews Corp. (NYSE: LTR) can be exchanged for the remaining shares of Lorillard. 

Jon C. Ogg
June 3, 2008