This might be the next Q play, once it becomes a Q
Ambac Financial Group, Inc. (ABK)
Bond insurer Ambac files for bankruptcy
ShareretweetEmailPrintOn Monday November 8, 2010, 6:32 pm EST
By Tom Hals
WILMINGTON, Delaware (Reuters) - Ambac Financial Group Inc, which was the second-largest U.S. bond insurer before suffering huge losses on risky mortgages, filed for Chapter 11 bankruptcy on Monday.
The company, which filed in Manhattan bankruptcy court, said it had liabilities of $1.68 billion. The company's shares plummeted in after-hours trading to 20 cents, down from 52 cents at their close on the New York Stock Exchange.
Ambac faltered after it began chasing higher profits by expanding beyond municipal bond insurance and insuring riskier debt. That move backfired when the housing market crashed and credit markets tightened.
Ambac said it was unable to raise needed capital and failed to reach an agreement with senior bondholders that would have allowed it to restructure through a prepackaged bankruptcy.
A prepackaged filing allows for a speedy restructuring.
Ambac said it agreed to a nonbinding term sheet that will serve as the basis for further talks with bondholders.
"That may allow the company to emerge from bankruptcy more expeditiously," Ambac said in a statement.
The company also said it is planning to ask the bankruptcy court to restrict transfers of the company's stock and claims against the company, a move that will allow it to preserve a tax benefit worth about $7 billion. |
