Ambac Announces Disapproval of Interest Payments on Surplus Notes
Provides Additional Information Related to Proposed Amendments to Plan of Rehabilitation of Segregated Account
NEW YORK, April 29, 2014 (GLOBE NEWSWIRE) -- Ambac Financial Group, Inc. (Nasdaq:AMBC) ("Ambac"), a holding company whose subsidiaries provide financial guarantees and other financial services to clients in both the public and private sectors globally, announced today that the Wisconsin Commissioner of Insurance (the "Commissioner") has disapproved the requests of Ambac Assurance Corporation ("Ambac Assurance") and the Segregated Account of Ambac Assurance Corporation (the "Segregated Account") to pay accrued interest on surplus notes ("Surplus Notes") issued by Ambac Assurance and the Segregated Account, respectively, on their next scheduled interest payment date of June 7, 2014.
As previously announced, the Commissioner, in his capacity as Court-appointed rehabilitator of the Segregated Account (the "Rehabilitator"), is seeking approval from the Rehabilitation Court (Circuit Court of Dane County, Wisconsin) to amend the Rehabilitation Plan of the Segregated Account (the "Plan"), with a hearing currently scheduled for June 11, 2014. If the motion is approved, the Rehabilitator has confirmed that he intends to (i) increase the percentage of the initial cash payments ("Interim Payments") for permitted policy claims from 25% to 45% with effect from the later of July 20, 2014, and, if the amended Plan is not effective as of such date, the first Payment Date (generally, the 20th of the month) specified by the Rehabilitator following the amended Plan effective date (the "Reconciliation Date" as defined in the amended Plan), and (ii) pay to policyholders who received 25% Interim Payments, catch-up payments equal to 26.67% of the remaining balance of such claims ("Deferred Amounts") (including interest thereon) outstanding on the Reconciliation Date.