Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Xchange Benefits Acquires the Employer Stop Loss Renewal Rights of Employer Benefit Underwriters, Inc. (5/02/22)
ARMONK, N.Y.--(BUSINESS WIRE)--Xchange Benefits, LLC, a property and casualty managing general underwriter specializing in accident and health insurance, announced that it has purchased the renewal rights of Employer Benefit Underwriters, Inc.’s employer stop loss portfolio, effective immediately. Founded in 1996 in Daytona Beach, Fla., Employer Benefit Underwriters, Inc. (“EBU”) has been a managing general underwriter of employer stop loss business under the leadership of Howard Huneke.
This acquisition enables Xchange Benefits, a subsidiary of Ambac Financial Group, Inc. (NYSE: AMBC), to expand its nationwide footprint through the addition of new producer relationships that have been solidified over the years by EBU. Employer Stop Loss remains a growing market segment, and Xchange will continue to proactively pursue opportunities in this sector.
“Howard Huneke and the EBU team have built a fabulous business over many years which we are excited about integrating into our Xchange Platform. We very much look forward to welcoming EBU’s partners and clients into the Xchange family,” said Peter McGuire, President, Chief Executive Officer and Chairman of Xchange Benefits. “Xchange prides itself on industry leading service and underwriting creativity, and we are eager to show our capabilities to EBU’s family of clients and partners.”
“We are extremely happy to welcome the EBU team to the Xchange Benefits family and we also look forward to providing the same exceptional service that our Xchange Benefits clients have enjoyed over the years to all of EBU’s producers,” said James Denison, Chief Underwriting Officer and Executive Vice President of Xchange Benefits.
McGuire added, “I am happy that we will be able to continue to be the beneficiaries of Howard’s vast industry experience and am delighted that Howard has agreed to remain as an advisor to Xchange Benefits.”
Huneke said, “The EBU team is excited to join the Xchange family, bringing their years of experience, while looking forward to learning and growing as part of Xchange Benefits.”
About Xchange Benefits
Founded in 2010, Xchange Benefits, LLC is a diverse group of business units focused on the global insurance and reinsurance industry. Led by a team who have industry leading experience, Xchange Benefits underwrites, consults, creates products, creates retail distribution, structures risk, transacts reinsurance, advises on capital deployment and most importantly, listens to their clients. Xchange Benefits have a corporate office in Armonk, New York and an office in Indianapolis, Indiana.
https://www.businesswire.com/news/home/20220502005186/en/
Ambac Authorizes Share Repurchase Program (3/30/22)
NEW YORK--(BUSINESS WIRE)--Ambac Financial Group, Inc. (NYSE: AMBC) (“Ambac” or “AFG”), a financial services holding company, announces that its Board of Directors has approved a share repurchase program, under which Ambac may opportunistically repurchase up to $20 million of the Company’s common shares at management’s discretion over the period ending on March 31, 2024.
Under the share repurchase program, shares may be repurchased from time to time in the open market or negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws. There is no guarantee as to the exact number or value of shares that will be repurchased by the company, and the company may discontinue repurchases at any time that management determines additional repurchases are not warranted. The timing and amount of share repurchases under the share repurchase program will depend on several factors, including the company's stock price performance, ongoing capital planning considerations, general market conditions and applicable legal requirements.
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”) is a financial services holding company headquartered in New York City. Ambac’s core business is a growing specialty P&C distribution and underwriting platform. Ambac also has a legacy financial guaranty business that is in run off. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, we use our website to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information. For more information, please go to www.ambac.com.
The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Ambac’s common stock or a holder of 5% or more of Ambac’s common stock increases its ownership interest.
https://www.businesswire.com/news/home/20220330005330/en/Ambac-Authorizes-Share-Repurchase-Program
Ambac Assurance Corporation Reports Preliminary First Quarter 2022 Impact of Recent Material Developments (3/30/22)
NEW YORK--(BUSINESS WIRE)--Ambac Financial Group, Inc. (NYSE: AMBC) (“Ambac” or “AFG”), a financial services holding company, announces that its subsidiary, Ambac Assurance Corporation (“AAC”), has provided updates regarding the implementation of the restructuring of a significant portion of its Puerto Rico exposure and the estimated impact of recent litigation developments on its representation and warranty (“R&W”) subrogation recoverable. These developments relate solely to AAC, Ambac’s legacy financial guaranty business. Both developments are expected to have a material effect on Ambac’s consolidated financial results for the first quarter of 2022.
Puerto Rico Update
Estimated Gain of $210 to $250 million
AAC has successfully implemented the restructuring of a significant portion of its remaining Puerto Rico exposures, following the occurrence of the effective dates for the Plan of Adjustment related to AAC-insured Puerto Rico General Obligation bonds (“GO”) and Public Buildings Authority (“PBA”) bonds, and Qualifying Modifications for AAC-insured Puerto Rico Infrastructure Authority (“PRIFA”) and Convention Center District Authority (“CCDA”) bonds, all effective March 15, 2022. This follows the court approvals of restructurings for the GO bonds issued by the Commonwealth of Puerto Rico and bonds issued by PBA, PRIFA and CCDA. The execution of these transactions has reduced AAC’s insured principal and interest exposure to Puerto Rico by approximately 25% or $450 million. AAC expects that its insured Puerto Rico Highways and Transportation Authority (“PRHTA”) bonds will be restructured as part of the PRHTA Title III bankruptcy process in the second half of 2022, on terms consistent with the Plan Support Agreement executed last year. As a result of these successful restructurings and based on observable market values for subrogation received as of the date of the restructuring as well as expected risk mitigation activities, Ambac is expected to record a gain in the range of $210 to $250 million as part of its first quarter 2022 consolidated financial results.
R&W Update
Estimated reduction to AAC’s R&W subrogation recoveries of $175 million to $205 million
Based on AAC’s initial evaluation of the court’s decision in the case entitled U.S. Bank National Association v. DLJ Mortgage Capital, Inc. relating to Home Equity Asset Trust 2007-1, a residential mortgage-backed securities trust (“HEAT”), management believes that the estimated reduction to AAC’s estimated R&W subrogation recoveries is in the range of $175 to $205 million. This estimate excludes the impact of changes in discount rates and underlying insured RMBS transaction performance, which will be evaluated in conjunction with loss reserves for the first quarter. Previously, Ambac recorded in its consolidated balance sheet estimated R&W subrogation recoveries of $1.7 billion as of December 31, 2021, under US GAAP accounting principles.
Estimated subrogation recoveries do not represent AAC’s view of the ultimate recovery from its RMBS litigations. In particular, the reported subrogation recoverable does not include: a) pre-judgement interest associated with such claims, which given the passage of time, represents a material incremental value above the subrogation recoverable and b) potential material recoveries attributed solely to fraudulent inducement claims in AAC’s litigations.
AAC’s ultimate recoveries in its RMBS litigations may be materially higher or lower than its estimated subrogation recoveries based on a number of factors, including those described in Ambac’s Form 10-K for the fiscal year ended December 31, 2021. See “More on Estimated Subrogation Recoveries” below for further information.
In addition to the Puerto Rico gains and R&W adjustment, Ambac’s first quarter 2022 consolidated financial results will be impacted by other events and conditions that occurred or existed during the quarter including, but not limited to: rising interest rates; volatility in the equity and debt markets; as well as changes to loss and loss expense reserves. Each of the estimated ranges contained in this release are subject to change. Complete first quarter 2022 consolidated financial results will be filed in Ambac's first quarter 2022 Form 10-Q and discussed during its earnings call which the company will announce at a later date.
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”) is a financial services holding company headquartered in New York City. Ambac’s core business is a growing specialty P&C distribution and underwriting platform. Ambac also has a legacy financial guaranty business that is in run off. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, we use our website to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information. For more information, please go to www.ambac.com.
The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Ambac’s common stock or a holder of 5% or more of Ambac’s common stock increases its ownership interest.
More on Estimated Subrogation Recoveries
The subrogation recoveries range disclosed in this press release is an estimate, and is based solely on information available to Ambac as of the date hereof. The estimate is inherently uncertain and subject to change due to a variety of risks and uncertainties, which are described in the risk factors section of the company’s latest 10-K, particularly the risk factor captioned, “Our inability to realize the expected recoveries included in our financial statements could adversely impact our liquidity, financial condition and results of operations and the value of our securities, including the Sitka Senior Secured Notes and Tier 2 Notes.”
https://www.businesswire.com/news/home/20220330005324/en/Ambac-Assurance-Corporation-Reports-Preliminary-First-Quarter-2022-Impact-of-Recent-Material-Developments
AAC Releases Statement Regarding RMBS Litigation (3/18/22)
NEW YORK--(BUSINESS WIRE)--Ambac Financial Group, Inc. (NYSE: AMBC) ("Ambac" or "AFG"), a financial services holding company, announces that its legacy financial guaranty insurance subsidiary Ambac Assurance Corporation (“AAC”), released the following statement:
On March 17, 2022, the New York Court of Appeals issued a decision in the case entitled U.S. Bank National Association v. DLJ Mortgage Capital, Inc. relating to Home Equity Asset Trust 2007-1, a residential mortgage-backed securities trust (“HEAT”). While AAC does not insure the HEAT securities and is not a party to the HEAT litigation, the decision is relevant to AAC's breach-of-contract cases relating to its insured RMBS transactions, as previously disclosed in Part I, Item 1A Risk Factors in Ambac’s most recently filed Form 10-K.
The HEAT decision may affect one of the bases upon which AAC seeks recovery with respect to a significant portion of breaching loans in AAC's RMBS cases. However, AAC believes there remain other potential alternative paths to recovery for such breaching loans.
AAC’s management and legal advisors are evaluating the decision and its implications for AAC’s RMBS litigations and plan to issue additional disclosure following such evaluation. Management presently expects the HEAT decision to result in a downward adjustment, which could be material, to AAC’s estimated subrogation recoveries, recorded as of December 31, 2021. However, reported estimated subrogation recoveries do not represent AAC’s view of the ultimate recovery from its RMBS litigations.
As a reminder, AAC records, as a component of its loss reserves, estimated subrogation recoveries related to securitized loans in RMBS transactions with respect to which it is pursuing claims for breaches of representations and warranties. Importantly, AAC does not include potential material recoveries attributed solely to fraudulent inducement claims in our litigations in our estimate of subrogation recoveries. Nor does AAC include potential material recoveries attributable to pre-judgment interest in the estimate of subrogation recoveries.
AAC’s ultimate recoveries in its RMBS litigations may be materially higher or lower than its recorded estimated subrogation recoveries based on a number of factors, including those described in Ambac’s Form 10-K for the fiscal year ended December 31, 2021.
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”) is a financial services holding company headquartered in New York City. Ambac’s core business is a growing specialty P&C distribution and underwriting platform with a legacy financial guaranty business in run off. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, we use our website to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information. For more information, please go to www.ambac.com.
The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Ambac’s common stock or a holder of 5% or more of Ambac’s common stock increases its ownership interest.
https://www.businesswire.com/news/home/20220317006037/en/AAC-Releases-Statement-Regarding-RMBS-Litigation
AMBC.WS represents the right to purchase one share of AFG common stock.
The warrants are exercisable for cash at any time on or prior to April 30, 2023 at an exercise price of $16.67 per share. The warrants also have a cashless exercise provision.
Everspan Group Acquires Three Admitted Insurance Carriers (1/03/22)
Everspan completes its first year of operations with an established framework for its specialty property and casualty platform
NEW YORK--(BUSINESS WIRE)--Ambac Financial Group, Inc. (NYSE: AMBC) (“Ambac”), a financial services holding company, today announced that its subsidiary, Everspan Insurance Company (together with certain affiliates, “Everspan Group”), has completed the acquisitions of 21st Century Indemnity Insurance Company, 21st Century Pacific Insurance Company and 21st Century Auto Insurance Company of New Jersey.
The acquisition of these carriers, in addition to the recently completed acquisition of Providence Washington Insurance Company in October 2021, materially broadens and enhances Everspan Group’s (rated A- by AM Best) distribution capabilities and provides greater optionality for its program partners. The acquired companies will be renamed during the course of 2022. Legacy liabilities of the three newly acquired carriers will remain with the seller, a national insurance group.
“The expansion of Everspan’s carrier base will provide greater capabilities to launch new admitted programs, develop innovative products and provide us with enhanced flexibility to foster strategic relationships with prospective program partners,” stated Claude LeBlanc, Chief Executive Officer of Ambac and Everspan Group.
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”), headquartered in New York City, is a financial services holding company. Ambac's subsidiaries include: Ambac Assurance Corporation and Ambac Assurance UK Limited, financial guarantee insurance companies currently in runoff; Everspan Indemnity Insurance Company and Everspan Insurance Company, specialty property & casualty program insurers; and Xchange Benefits, LLC and Xchange Affinity Underwriting Agency, LLC, property & casualty Managing General Underwriters. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Ambac’s common stock or a holder of 5% or more of Ambac’s common stock increases its ownership interest. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, we use our website to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information. For more information, please go to www.ambac.com.
About Everspan Group
Everspan Group is a specialty property and casualty insurance platform comprised of Everspan Insurance Company and Providence Washington Insurance Company, admitted insurers, and Everspan Indemnity Insurance Company, a surplus lines insurer. Everspan Group operates nationwide on an admitted and non-admitted basis. The companies which comprise the Everspan Group are wholly-owned subsidiaries of Ambac Financial Group, Inc. (NYSE:AMBC), a financial services holding company. For more information please refer to www.everspangroup.com.
https://www.businesswire.com/news/home/20220103005229/en/
Best Warrants For 2022: 1847 Goedeker And Ambac (12/20/21)
https://seekingalpha.com/article/4475460-2022-best-ideas-goedeker-ambac-warrants
Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. Countrywide Home Loans, Inc., Countrywide Securities Corp., Countrywide Financial Corp. (n.k.a. Bank of America Home Loans) and Bank of America Corp. Case no. Case No. 651612/2010, Supreme Court of the State of New York, County of New York (11/23/21)
Trial begins 9/07/22.
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000874501/000087450121000170/ambc-20211123.htm
Minor setback I think
Ambac Announces Closing of Ballantyne Restructuring Following Irish and U.S. Court Approvals (6/18/19)
NEW YORK, June 18, 2019 (GLOBE NEWSWIRE) -- Ambac Financial Group, Inc. (Nasdaq: AMBC) ("Ambac"), a holding company whose subsidiaries, including Ambac Assurance Corporation (“AAC”) and Ambac Assurance UK Limited (“Ambac UK”), provide financial guarantees, announced today the closing of a restructuring transaction proposed by Ballantyne Re plc ("Ballantyne") in relation to its obligations following approval from the Irish High Court and the Bankruptcy Court of the Southern District of New York. This restructuring eliminates Ambac’s $900 million of insured Ballantyne net par exposure.
The key features of the restructuring are as follows:
- The novation of the indemnity reinsurance agreement between Ballantyne and Security Life of Denver Insurance Company dated November 19, 2008 (as amended) to Swiss Re Life and Health America Inc.;
- The disbursement of the assets from Ballantyne's reinsurance trust account to effectuate the novation and make payment to the holders of the affected Ballantyne notes in full and final satisfaction of their claims against Ballantyne; and
- The commutation of the obligations of Ambac UK in respect of Ballantyne’s Ambac UK guaranteed notes
Following implementation of the restructuring, Ballantyne is expected to be wound-up by way of a solvent liquidation.
Claude LeBlanc, President and Chief Executive Officer of Ambac commented, “The closing of the Ballantyne restructuring, Ambac UK’s largest Adversely Classified Credit, advances our de-risking strategy, improves the quality of our Book Value, materially increases our Adjusted Book Value and significantly strengthens Ambac UK’s regulatory capital position.” Mr. LeBlanc continued, “We believe the Ballantyne restructuring furthers our strategy of stabilizing our insurance platform.”
The impact of the transaction will be included in Ambac’s second quarter 2019 financial results. The transaction is expected to result in a Net Loss per diluted share attributable to common stockholders of between $1.65 and $1.90 and a decrease in Ambac’s GAAP Book Value per share of between $2.75 and $3.00, primarily due to the accelerated amortization of Ambac’s insurance intangible asset, partially offset by the reversal of loss and loss expense reserves. Conversely, the consummation of the transaction is expected to result in Adjusted Earnings per diluted share attributable to common stockholders of between $2.65 and $2.90 and an increase in Adjusted Book Value per share of between $2.90 and $3.10, as a result of the reversal of loss and loss expense reserves and the recognition of a gain on Ballantyne notes held in the investment portfolio. Ambac will provide further details of the transaction in its second quarter 2019 earnings press release and Form 10-Q filed with the SEC.
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”), headquartered in New York City, is a holding company whose subsidiaries, including its principal operating subsidiaries, Ambac Assurance Corporation (“Ambac Assurance” or “AAC”), Everspan Financial Guarantee Corp. and Ambac Assurance UK Limited (“Ambac UK”), provide financial guarantees of obligations in both the public and private sectors globally. AAC is a guarantor of public finance and structured finance obligations. Ambac’s common stock trades on the NASDAQ Global Select Market under the symbol “AMBC”. The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Ambac’s common stock or a holder of 5% or more of Ambac’s common stock increases its ownership interest. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, we use our website to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates to the status of certain residential mortgage backed securities litigations. For more information, please go to www.ambac.com.
http://www.globenewswire.com/news-release/2019/06/18/1870377/0/en/Ambac-Announces-Closing-of-Ballantyne-Restructuring-Following-Irish-and-U-S-Court-Approvals.html
Smart money shorting this stock market, big time. Especially the bond insurers. IMO.
Bishop files amicus breif.
https://drive.google.com/file/d/1c4O0D8IbPaIjcavLhr2wfvtSL-xyKM13/view
"Representative Bishop requests that all parties and the Court respect the letter and intent of PROMESA."
$30 p/t. "hearing date of June 6, 2018 has been set for oral arguments on our appeal in our Countrywide case as a progressive step towards final resolution of our Bank of America Countrywide dispute. We remain committed to fully protecting our rights and are prepared to progress this case all the way through trial, if necessary."
I own the warrants
Short noballs, make money
Short bond insurers, make money. IMO.
Bond insurers a safe short bet. IMO.
Upside in Puerto Rico Municipal Bonds (11/26/16)
Puerto Rico’s new governor is intent on restructuring the island’s debt.
The recent election of a new governor in Puerto Rico, and the formation of a powerful federal financial control board this summer, have resulted in some optimism about a bondholder-friendly restructuring of much of the island’s $70 billion of debt.
The situation is still unsettled, but the new governor, Ricardo Rosselló, is viewed on Wall Street as a serious leader who wants to put the island on a stronger financial footing, bolster a weak economy, and work out a reasonable agreement with bondholders. Rosselló contrasts with the more combative outgoing governor, Alejandro García Padilla, who clashed with bondholder groups and then opted to default on $1 billion of debt-service payments on July 1.
Rosselló’s election came after midyear, when President Barack Obama signed the Puerto Rico Oversight, Management, and Economic Stability Act, which created a seven-member control board with broad fiscal and debt-restructuring authority.
The benchmark Puerto Rico 8% general-obligation bond due in 2035 rallied after the Rosselló win, to about 72 cents on the dollar from 69 cents, but has since slipped back to about 69 cents. The market for Puerto Rico’s senior sales-tax revenue bonds, known by their Spanish acronym Cofina, has been stronger, with long-term senior debt trading up to the low $70s from the high $60s in the summer, as Puerto Rico has continued to make payments to that debt.
Barron’s was among the first to warn about Puerto Rico’s growing financial troubles in a cover story more than three years ago (“Troubling Winds,” Aug. 26, 2013).
http://www.barrons.com/articles/SB50001424052748704719204579022892632785548
Key future developments will be a new fiscal proposal from the incoming governor and recommendations from a task force about steps the U.S. government can take to ease Puerto Rico’s financial burden.
Things should heat up in early 2017 because a stay on bondholder lawsuits ends in February—with a potential extension to around May 1. This means that a bond restructuring plan probably needs to be in place by then. There is apt to be considerable wrangling among different bondholder groups, and there is overall risk given Puerto Rico’s fiscal, economic, and pension problems.
Against that backdrop, the general-obligation bonds, trading at less than 70 cents on the dollar, look like the best way to bet on a bondholder-friendly deal that could give GO holders a package worth 85 cents to 90 cents on the dollar.
—Andrew Bary
http://www.barrons.com/articles/upside-in-puerto-rico-municipal-bonds-1480137155
I remember my first winning play was AMBC in 2010 when was announced BK i bought at 0.65 sold at $6 1 year after....them BOOM 34$ im watching now but nothing interesting at the moment.
Puerto Rico Halts Toll-Road Revenue Transfer to Save Cash (5/18/16)
By Brian Chappatta and Alexander Lopez
Governor will suspend transfer of toll revenue to bondholders
Highways bonds trade at cents on the dollar as default looms
Puerto Rico Governor Alejandro Garcia Padilla declared a state of emergency for the island’s Highways and Transportation Authority, suspending the transfer of toll-road revenue to bondholders and imposing a stay on legal claims.
While the order doesn’t establish a moratorium on bond payments, it halts a revenue stream to investors that wasn’t subject to the “clawback” initiated last year on fuel taxes to pay holders of commonwealth guaranteed obligations. Standard & Poor’s said in a report last month Puerto Rico will make its July 1 debt service payments of $220.7 million on highway securities by tapping reserve funds. It might not have enough stored away to pay in January, the ratings company said at the time.
The highways agency joins the island’s Government Development Bank in a state of emergency as commonwealth officials seek to preserve cash. The authority needs $25 million to continue operations on a monthly basis and $150 million to pay suppliers, according to a statement released Wednesday.
The move comes as a bill to assist Puerto Rico in restructuring its $70 billion of debt stalls in Washington, leading the commonwealth to take alternative measures. Ambac Financial Group Inc., which insures highways debt, sued the agency earlier this month over a concession agreement that could divert and extract $115 million from the authority.
S&P said last month that toll revenue pledged to investors could cover about 21 percent of what’s owed on senior- and junior-lien highway bonds. The suspension of the funds won’t affect those clawed back under the governor’s executive order.
Puerto Rico has $5.4 billion in highway bonds. Those without insurance trade at lower prices than most other commonwealth securities. Uninsured debt maturing July 2033 last traded on May 12 at an average 16.8 cents on the dollar, data compiled by Bloomberg show.
“If there’s no replenishment into the reserves, it’s just a matter of time when the bonds will default,” David Hitchcock, an analyst covering Puerto Rico at S&P, said in a telephone interview.
http://www.bloomberg.com/news/articles/2016-05-18/puerto-rico-halts-toll-revenue-transfer-from-bonds-to-save-cash
Puerto Rican Debt Crisis Is Coming to a Head (5/07/16)
Congress is under pressure to create a financial control board that could restructure the island’s $72 billion of debt and maybe impose a settlement on bondholders.
As Congress weighs legislation to permit Puerto Rico to restructure its $72 billion of debt, the commonwealth’s bonds are languishing at or near record lows. Investors fear an unfavorable deal could be forced on them by an as-yet-to-be-created financial control board.
Puerto Rico’s benchmark 8% general-obligation bonds, due in 2035, traded Friday around 64, down from 73 at the start of the year and 93 when the $3.5 billion issue was sold in March 2014. Other GO debt changes hands in the mid-50s. Puerto Rico’s long-term senior Cofina bonds, backed by sales-tax revenue, trade around 57, and junior Cofina debt, near 40. The GOs and GO-supported debt total about $17 billion (face value), and a similar amount of Cofina debt is outstanding.
The U.S. House of Representatives soon is expected to resume work on legislation to let Puerto Rico restructure its debt and create a financial control board. The board could oversee the island’s finances and possibly force a restructuring deal on recalcitrant bondholders.
Congress is likely to enact legislation before midyear, when Puerto Rico faces $2 billion of bond interest and principal payments. Puerto Rico now lacks access to the bankruptcy code’s Chapter 9, which lets local governments, but not states, restructure debt. Barron’s was among the first to call attention to Puerto Rico’s financial plight in an Aug. 24, 2013, cover story.
Puerto Rico’s Government Development Bank, which plays a key role in the island’s finances, defaulted on $3.9 billion of debt last week, while working out a deal with about 25% of creditors that would pay them around 47 cents on the dollar.
“Most everyone agrees that Congress needs to act to create an oversight board that gives Puerto Rico the regulatory and legal framework to restructure its debts and put the economy on a more sustainable path,” says John Loffredo, co-head of investor MacKay Municipal Managers. Without a powerful board, it will be tough to achieve a comprehensive restructuring.
GO holders say their claims are protected by the Puerto Rican constitution, while senior Cofina holders take comfort from that debt’s dedicated revenue stream.
Muni-bond managers Franklin Templeton and Oppenheimer, the largest holders of junior Cofina debt, are resisting any deal that would impose a harsh settlement on them. For risk-takers, the best Puerto Rican bet probably is the GO bonds, because they have protection from the Puerto Rican constitution. While it’s unlikely that they’d pay 100% in a restructuring, they may get more than the current market price.
One sizable Puerto Rico bondholder fears a powerful control board would impose an onerous settlement on investors. Puerto Rico’s government wants maximum debt relief. In such situations, political forces can trump financial interests.
Among the things to watch is whether any restructuring involves creating a Puerto Rican “super-bond,” backed by a dedicated revenue stream, and whether Puerto Rico’s pension plan, which has $43 billion in unfunded liabilities, is untouched or minimally affected. Pensions were favored over bondholders in the Detroit and General Motors (ticker: GM) bankruptcies.
Cofina bonds could be dicey because the agency was created to enable Puerto Rico to get around legal restrictions on GO issuance. In Detroit’s bankruptcy, similarly structured debt was treated harshly.
Puerto Rico Gov. Alejandro Padilla has denounced “vulture investors,” including some hedge funds, for trying to profit at the expense of ordinary Puerto Ricans. However, the hedge funds, big buyers of Puerto Rico’s $3.5 billion GO issue in 2014, now have paper losses of 30%.
Puerto Rico debt insured by the likes of Assured Guaranty is holding up well, as investors anticipate that the insurers will make good on their guarantees.
The only certainty: There will be plenty of drama in coming months as Puerto Rico moves to a likely restructuring of its onerous obligations.
-- Andrew Bary
http://www.barrons.com/articles/puerto-rican-debt-crisis-is-coming-to-a-head-1462593795?tesla=y&mod=BOL_archive_twm_dept
Puerto Rico Bonds Snapped Up by Insurers as Crisis Nears Climax (3/10/16)
National and Ambac boost their holdings of island securities
Insurers use investment portfolios to buy distressed debt
By Michelle Kaske
The companies with the most at stake in Puerto Rico’s debt crisis have become buyers of the island’s bonds.
MBIA Inc.’s National Public Finance Guarantee Corp. and Ambac Financial Group, which together insure about $19 billion of the U.S. territory’s principal and interest against default, have used millions from their investment portfolios to buy Puerto Rico securities they guarantee. Some of the bonds trade for as little as pennies on the dollar because no payments come due until decades from now, when the commonwealth’s current bout of fiscal turmoil will be a distant memory.
“As the bonds are insured by National, we are very familiar with the credit profile of the bonds and the purchase price made it an attractive investment, especially for insured debt,” Chris Young, National’s chief financial officer, said in an e-mail.
The investments reduce the payouts the insurers could face if the island defaults and signal a bet that at least some bondholders will fare better-than-expected when Puerto Rico restructures its $70 billion of debt. Governor Alejandro Garcia Padilla wants owners of tax-backed securities to accept almost $23 billion less than they’re owed, with the prospect of recovering their losses if the island’s economy breaks out of its years-long recession.
It’s not the first time the insurers have bet that prices of bonds they stand behind have fallen too far. During last decade’s housing crisis, MBIA bought residential mortgage-backed securities that it was left covering after a default. The strategy reduced the outflow of claims payments and allowed the company to sell at a profit when prices recovered.
“It’s the normal course of business for them,” said Edwin Groshans, an analyst who tracks the insurers at Height Securities, a Washington-based broker dealer. “They’ve been insuring bonds for decades, so they have a very long track record of what a loss content is in certain scenarios.”
National boosted the amount of Puerto Rico securities it holds in its $4 billion bond portfolio to $585.6 million at the end of 2015 from $1.8 million the year before, according to its annual statement to state regulators on Feb. 29. Ambac, which has $2.6 billion of fixed-income investments, increased its commonwealth holdings to $87.4 million from $1 million a year earlier, the company’s disclosures show. The amounts reflect par value of the bonds once they mature rather than what the companies actually paid.
The jumps largely resulted from purchases of debt repaid with a dedicated share of Puerto Rico’s sales taxes. National spent about $100 million in August scooping up discounted senior sales-tax bonds worth $585 million that don’t begin paying interest or principal until 2040. Ambac in October and December paid about $10 million for $86 million of variable-rate highway bonds maturing in 2027 and 2028 and senior sales-tax debt that defers all payments until 2054.
“As part of our disciplined asset liability management program, we invest strategically and opportunistically in select Ambac insured bonds,” Abbe Goldstein, a spokeswoman for Ambac, said in an e-mail.
Who Loses?
Since the purchases, Puerto Rico has proposed foisting deep losses on owners of the sale-tax-backed securities, known by the Spanish acronym Cofina. Under the restructuring plan released on Feb. 1, those bondholders would recover about 49 percent of what they’re owed, compared with 72 percent on general obligations, which have the first claim on the government’s funds. Officials are working on a revised proposal after bondholders weighed in on the initial offer.
The specter of widespread defaults by the island has taken a toll on the insurers’ shares, causing MBIA to tumble 46 percent in the two years through December, while Ambac lost 43 percent. They’ve since recovered some as Puerto Rico moves closer toward completing a deal with creditors to cut its power company’s debt: MBIA has risen 41 percent this year to $9.14, and Ambac climbing 16 percent to $16.29, as of 10:02 a.m. in New York. Ambac and MBIA’s National insured about $10 billion and $9 billion of Puerto Rico principal and interest payments, respectively, at the end of 2015.
The insurance company’s recent investments have yielded mixed results. Ambac’s senior sales-tax bonds maturing in 2054, which it bought in October for 6.4 cents on the dollar, last traded Monday for 7.8 cents. National’s largest commonwealth bond purchase, acquired for 19.8 cents in August, last traded Feb. 18 at 19.6 cents.
The decisions may still pay off. Along with reducing how much they’d have to cover if Puerto Rico defaults, the companies may receive more than they paid for the securities under a restructuring, according to Groshans, the Height Securities analyst.
“The first benefit is not having to make the insurance payment on that bond,” Groshans said. “The second benefit is if they’re right, then the amount that they’ll recapture via the restructuring proceeding should generate cash for them to make other payments.”
Young, National’s chief financial officer, declined to comment on whether the increase in Puerto Rico holdings was part of a strategy to reduce claims payments.
“It was an attractive investment for our investment portfolio,” he said.
http://www.bloomberg.com/news/articles/2016-03-10/puerto-rico-bonds-snapped-up-by-insurers-as-crisis-nears-climax
Short AMBC and all bond insurers. IMO.
Ruthless company to say the least.
Screwed every investor during the BK process unnecessarily. Never gave them the time of day. Do NOT invest in this company. NEVER NEVER. They do NOT deserve your hard earned money.
LMFAO...you me and a couple of million others!! those fucks should be hung by the neck..till dead!
Woo-hoo I'm a billion-air!!
Oh, wait... My shares are no longer 'good'.
What did I miss? Can somebody bring me up to speed. I followed this a long time and think it was down to .50 cents or $1.00 a year or 2 back. How did it get to this level? Did they split or what? Thanks.
It is hard to assign a value IMO. I am not clear if the spike in the stock is due to the hope for a big settlement with Goldman, BAC, JPM , etc. or just the equity freed up in the bankruptcy process.
Let's Discuss the Value of AMBC at Present
Now that we've opened a new chapter in Ambac Financial investing...the new stock is up 33% in a week. I have no idea if $24 is a fair value for this stock. I've tried to research this and haven't found anything that can give me a good determination. Any have ideas? Is this undervalued based of the future prospects?
So the new AMBC should have a pristine balance sheet and is probably a buy at this point.
The number of common s'holder lawsuits will be HERCULEAN/
I don't think you understand bankruptcy court.
The number of common s'holder lawsuits will be HERCULEAN/EPIC/GINORMOUS. Any investment in any monoline in any WAY, SHAPE OR FORM is doomed.
Ambac began trading on the NASDAQ today after emerging from bankruptcy (AMBC) 20.35 +1.74 : Co announced the effectiveness of its Second Modified Fifth Amended Plan of Reorganization, which marks the completion of its financial restructuring and Ambac's emergence from Chapter 11 bankruptcy protection.
Under the terms of the restructuring, all allowed claims of Ambac's former creditors were discharged and such creditors received new common stock, and in certain instances, new warrants, issued by the reorganized co. All common stock of the co in existence prior to Ambac's emergence from bankruptcy has been cancelled. Holders of such existing stock have not, and will not, receive distributions under the Plan.
Co traded on the OTC markets under ABKFQ since going into bankruptcy in 2010.
Thanks for your response. Another stock for writing off this year
they probably will not be removed but the ticker will be shown as non valid and the value will be changed to zero. but it should still show for tax purposes.
A little confused. My broker still shows the shares I have for this stock. Are these shares going to be removed from my account soon?
Ambac will remain a public company. The ABKFQ shares are cancelled so that NEW shares under a NEW ticker for AMBAC will securitize the creditors' reorganized debt.
Re-issued ? ..Im hearing stocks might be re issued under another name of theres? mmmmm?
I remember, yet as recently as yesterday, the penny predictions were still abound
SMH
It certainly means that shareholders who bought into the false and extremely misleading pump / hype on this board should scroll back to March 20 and read EVERY post.
Even Ambac put out a news release in late March stating the PUMP / HYPE and the run on the stock to over .14 cents was FALSE and MISLEADING and perpetrated by persons beyond AMBAC's control.
Ambac reiterated that ABKFQ stock would be cancelled.
Gave one last good kick and now the madness has ended
Does that mean MOASS is imminent?
ABKFQ: "In addition, all existing common stock of the company will be cancelled on the Effective Date and the holders of such stock will not receive any distributions under the Plan. Ambac has received approval from the NASDAQ OMX Group to list the New Common and New Warrants on the NASDAQ Global Select Market, as of the Effective Date, under the ticker symbols AMBC and AMBCW, respectively."
existing shares are gone, new shares will be issued
New symbol...or gone?
ABKFQ Ambac Financial Group, Inc. Common Stock 5/1/2013 Plan of Bankruptcy effective. All shares have been cancelled. Deletion time: 8:32:38
http://www.otcbb.com/asp/dailylist_detail.asp?d=05/01/2013&mkt_ctg=ALL
Followers
|
134
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
10087
|
Created
|
11/03/07
|
Type
|
Free
|
Moderators |
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |