Lorillard to replace Ambac in S&P 500

Tobacco products producer Lorillard Inc. will replace Ambac Financial Group Inc. in the S&P 500 after the close of trading June 10, Standard & Poor's said Tuesday.

Ambac's market capitalization is about $860 million, ranking it 500 in the benchmark index, S&P said. The value of the bond insurer has plummeted during the past year over its exposure to mortgage debt. Its stock, which traded at $89.94 in May 2007, closed Tuesday down 2 cents at $3.

Lorillard, whose brands include Newport and Kent, is being distributed to the public via a two-tier process involving the retirement of Carolina Group tracking stock, in exchange for which about 62 percent of Lorillards common stock will be issued, and an offer in which shares of Loews Corp. can be exchanged for the remaining shares of Lorillard.