Douglas J. Lucas will join AMBAC Inc. next week as chief risk compliance officer and first vice president. The hire will help AMBAC's capital management subsidiary gets its new swaps business off the ground, market sources said.
Lucas, 38, was chief credit officer at TMG Financial Products, a swaps subsidiary of the Mutual Life Assurance Company of Canada.
AMBAC's swap operation is expected to commence soon, and Lucas may help the company overcome one significant hurdle -- convincing rating agencies that the bond insurer can provide swaps without jeopardizing its triple-A claims-paying ability.
Before joining TMG in October of last year, Lucas spent six and a half years at Moody's Investors Service. At Moody's, Lucas was a vice president in charge of the U.S. brokerage industry and was responsible for rating firms' separately capitalized swaps subsidiaries.
At TMG, chief executive officer Lee Wakeman said he has not chosen a replacement for Lucas yet.
"We wish him all the best at AMBAC. We're sorry to see him go," Wakeman said.
Although AMBAC officials declined to comment on their swaps activity, the insurer hired several other swap specialists this year and has made known its desire to get into the swaps business.
"Clearly, it is our intention to get into the pure plain-vanilla municipal swaps business sometime this year," AMBAC's chief executive officer, Phillip B. Lassiter, said in an interview with The Bond Buyer in May.
Market sources said AMBAC might offer issuers a long-dated swap package. Under that scenario, the firm would provide liquidity support for long-term, variable-rate bonds and a swap to give issuers a synthetic fixed rate.
Lucas was not available for comment yesterday.