Ambac Seeks Restructuring With Prepackaged Bankruptcy
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Ambac Financial Group Inc., whose bond insurance unit is being restructured by Wisconsin regulators, said it skipped a bond payment today and will pursue a pre-packaged bankruptcy with a group of creditors.
Ambac shares plunged 50 percent after the company said in a regulatory filing it will miss an interest payment due today on $75 million of 7.5 percent notes maturing May 2023. The company, with total debt of $1.62 billion, has a 30-day grace period until a default is triggered and bondholders can accelerate full payment, according to the filing. If it’s unable to agree to a prepackaged filing by year-end, Ambac said it will seek bankruptcy protection without creditor approval.