Ambac Announces Execution of COFINA Plan Support Agreement
30 Agosto 2018 - 10:45PM
Ambac Financial Group, Inc. (Nasdaq: AMBC) ("Ambac"), a holding
company whose subsidiaries, including Ambac Assurance Corporation
(“AAC”), provide financial guarantees, announced today that AAC,
the Financial Oversight and Management Board for Puerto Rico (the
“Oversight Board”), the Puerto Rico Sales Tax Financing Corporation
(“COFINA”), Puerto Rico Fiscal Agency and Financial Advisory
Authority, Bonistas Del Patio, Inc., other bond insurers, and
certain holders of senior and junior COFINA bond claims have
executed a Plan Support Agreement (the “COFINA Plan Support
Agreement”) for the restructuring of all senior and junior COFINA
bonds.
AAC insures $808.5 million of the initial principal amount
of Senior COFINA Capital Appreciation Bonds (approximately $1,325.4
million of accreted value as of, but not including, the May 5, 2017
petition date (the “Petition Date”) in the COFINA Title III
proceeding). AAC also owns approximately 58% of AAC-insured
senior COFINA bonds.
The COFINA Plan Support Agreement furthers the
agreement-in-principle announced by the Oversight Board on August
8, 2018. Under the COFINA Plan Support Agreement, the
creditor parties agree, among other things, to support the filing
of a plan of adjustment with respect to COFINA that provides
for a distribution of Plan consideration comprised of new
COFINA bonds and cash, with a face amount in the aggregate equal to
approximately 93% (plus accrual, as of August 2018) of senior
COFINA bond holders’ Petition Date claim amounts, without taking
into account AAC’s insurance policy for the AAC-insured bonds, and
a face amount of approximately 56% (plus accrual, as of August 2018
) of junior COFINA bond holders’ Petition Date claim amounts.
The contemplated Plan of Adjustment, once confirmed by the court
overseeing COFINA’s Title III proceeding, will also finally resolve
all COFINA-related litigation and validate the COFINA
structure.
Under the COFINA Term Sheet (attached as an exhibit to the
COFINA Plan Support Agreement), holders of AAC-insured senior
COFINA bonds would have the option to elect to either (i) commute
their rights in respect of the AAC insurance policy associated with
the existing senior COFINA bonds, which bonds will be cancelled, in
exchange for new COFINA bonds, cash amounts to be paid by COFINA,
plus additional consideration provided by AAC, or (ii) exchange
their senior COFINA bonds for trust certificates issued by a
custodial trust, which trust would receive distributions from
COFINA under the new COFINA bonds, plus payments under the existing
AAC insurance policy in respect of any shortfalls. Payments
on the new COFINA bonds deposited in the custodial trust would
reduce AAC’s obligations on its insurance policy.
The terms of the COFINA Plan of Adjustment and related
documentation which will effectuate the contemplated transactions
remain subject to negotiation and court approval.
Claude LeBlanc, President and Chief Executive Officer of Ambac
commented “While there is a lot of work left to be done, the
execution of the COFINA Plan Support Agreement is a definitive step
towards a final resolution of Puerto Rico’s debt restructuring and
we are pleased to be a party to the COFINA Plan Support Agreement.
The negotiated settlement of the Commonwealth-COFINA litigations
also provides significant value to the Commonwealth through a
sharing of the sales tax revenues, and resolution of the COFINA
Title III proceedings will provide clarity regarding one of Ambac’s
key adversely classified credits.”
The COFINA Plan Support Agreement, and related term sheet can be
found on Ambac’s website under the heading “Information for
Investors Regarding COFINA Plan Support Agreement.”
About Ambac
Ambac Financial Group, Inc. (“Ambac” or “AFG”), headquartered in
New York City, is a holding company whose subsidiaries, including
its principal operating subsidiaries, Ambac Assurance Corporation
(“AAC”), Everspan Financial Guarantee Corp. and Ambac Assurance UK
Limited (“Ambac UK”), provide financial guarantees of obligations
in both the public and private sectors globally. AAC is a guarantor
of public finance and structured finance obligations. Ambac’s
common stock trades on the NASDAQ Global Select Market under the
symbol “AMBC”. The Amended and Restated Certificate of
Incorporation of Ambac contains substantial restrictions on the
ability to transfer Ambac’s common stock. Subject to limited
exceptions, any attempted transfer of common stock shall be
prohibited and void to the extent that, as a result of such
transfer (or any series of transfers of which such transfer is a
part), any person or group of persons shall become a holder of 5%
or more of Ambac’s common stock or a holder of 5% or more of
Ambac’s common stock increases its ownership interest. Ambac is
committed to providing timely and accurate information to the
investing public, consistent with our legal and regulatory
obligations. To that end, we use our website to convey information
about our businesses, including the anticipated release of
quarterly financial results, quarterly financial, statistical and
business-related information, and the posting of updates to the
status of certain residential mortgage backed securities
litigations. For more information, please go to www.ambac.com.
Contact Lisa A. KampfManaging
Director, Investor Relations(212) 208-3177lkampf@ambac.com
Source: Ambac Financial Group, Inc.
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