Ambac opts for prepackaged bankruptcy
Ambac Financial Group has announced that it is pursuing a restructuring of its outstanding debt through a prepackaged bankruptcy proceeding.
The US bond assurer has skipped an interest payment due on part of its $1.6 billion debt and having failed to raise additional capital, intends to file for bankruptcy under Chapter 11 of the US Bankruptcy Code, if it is unable to reach agreement on a prepackaged bankruptcy.
Ambac provides financial guarantees and financial services to clients in both the public and private sectors around the world.
Concerns over bond assurers, which guarantee the interest and certain other payments on the securities that they underwrite, first arose in 2007 when it became clear that they could face huge claims resulting from the US sub-prime mortgage crisis.
Since then, both Ambac and rival MBIA have had their credit ratings downgraded, affecting their ability to write new business.
The group’s principal operating subsidiary, Ambac Assurance Corporation, which is a guarantor of public finance and structured finance obligations, has a Caa2 rating under review for possible upgrade, from Moody’s.
Category: Companies News, Financials, Insurance News
Visited 1776 times, 1 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.