Ambac plunges on bankruptcy warning

[Roland99]

Source: MarketWatch

Bond insurer misses interest payment, unable to raise capital

Shares of Ambac Financial Group Inc., already a penny stock, lost nearly half their value in Monday’s premarket after the bond insurer said it missed a Nov. 1 interest payment on its debt and warned it may file for bankruptcy by the end of the year.

The New York-based company said in a regulatory filing that its board has decided not to make a regularly scheduled interest payment on notes due in 2023.

If the interest is not paid within 30 days of the scheduled interest payment date of Nov. 1, an event of default will occur under the indenture for the notes, Ambac said.

The company, unable to raise additional capital as an alternative to seeking bankruptcy protection, is currently pursuing with an ad-hoc committee of senior debt holders a restructuring of its outstanding debt through a prepackaged bankruptcy proceeding, according to the filing.

Read more: http://www.marketwatch.com/story/ambac-misses-interest-payment-may-file-bankruptcy-2010-11-01

[Dr.Phool]

1. Oh.

I thought you said Amtrak. Or Aflac.

[herbm]

2. No, this is another Corp with significant sounding name that doesn't describe its business.

[Turbineguy]

3. "....prepackaged bankruptcy proceeding...."

This is a great method for protecting certain privileged owners and screwing the rest. Presumably management has already looted all the proceeds from the insurance premiums in commissions and bonuses.