Posted on 06/10/2010 3:42:45 AM PDT by TigerLikesRooster
Ambac warns of default as bondholders organize
Tue, Jun 8 2010
* Could miss interest payment as soon as Q2 2010, default
* Says considers filing bankruptcy, raising capital
* Bondholders form ad hoc committee - sources
* Committee to push for prepack, debt-for-equity swap
* Shares fall 16 percent after hours
By Emily Chasan
NEW YORK (Reuters) - Ambac Financial Group Inc (ABK.N: Quote, Profile, Research, Stock Buzz), the bond insurer whose toxic assets were seized by Wisconsin state regulators in March, said it could default on its loan obligations and was still considering filing a prepackaged bankruptcy.
The company, which has had trouble writing new business since losing its 'AAA' credit rating in 2008, said in a U.S. Securities and Exchange Commission filing on Tuesday that "as early as the second quarter of 2010" it may decide not to make interest payments on its debt, which could result in a default.
Holders of some of Ambac Financial Group's $1.24 billion senior debt, have formed an ad hoc committee and will try to push the company into a prepackaged bankruptcy, people familiar with the matter told Reuters.
(Excerpt) Read more at reuters.com ...
P!
Bond “Insurance”....another scam coming nglued..
Such flim flam!!!
Somebody get Charlie Gasparino in front of the CNBC camera ASAP!
These bond insurers sold insurance on bonds for one tenth of what the market was selling it via credit default swaps. That’s like buying gold at $1,000, minting it into a coin, and selling the coin for $100. Yeah, great business model.
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