Ambac Settles RMBS Litigation Against Nomura

Rhea-AI Summary

Ambac Financial Group (NYSE: AMBC) announced a settlement with Nomura Credit & Capital, Inc., resolving its RMBS litigation. Nomura will pay Ambac $140 million, resulting in an estimated gain of $43 million for Ambac, to be recognized in Q4 results. The funds will be used to repay the entire balance of Tier 2 Notes. Ambac's CEO Claude LeBlanc expressed satisfaction with this outcome, which concludes all legacy RMBS litigation.

Positive

• Settlement with Nomura for $140 million enhances liquidity.
• Estimated gain of $43 million to be recognized in Q4 financials.
• Settlement concludes all legacy RMBS litigation, improving future outlook.

Negative

• None.

NEW YORK--(BUSINESS WIRE)-- Ambac Financial Group (NYSE: AMBC), a financial services holding company whose subsidiaries include Ambac Assurance Corporation (“AAC”), today announced that on December 29, 2022, AAC entered into a Settlement Agreement and Release (the “Settlement Agreement”) with Nomura Credit & Capital, Inc. (“Nomura”) to settle its RMBS litigation¹ against Nomura. As a result, Nomura has agreed to pay AAC $140 million.

This settlement materially exceeds the amount of subrogation recovery recorded on Ambac’s 3Q 2022 consolidated GAAP financial statements attributable to the Nomura litigation. Accordingly, Ambac estimates that it will record a gain with respect to the settlement of approximately $43 million. This gain will be recognized in Ambac’s fourth quarter financial results.

Funds are expected to be received within 10 business days from the execution date of the Settlement Agreement. AAC will use all proceeds, plus cash on hand, to repay the entire outstanding balance of Tier 2 Notes.

Claude LeBlanc, Ambac President and Chief Executive Officer, stated, “Ambac is very pleased to have reached this settlement with Nomura, which, in addition to the previously announced Bank of America settlement, successfully brings closure to all of Ambac’s legacy RMBS representation and warranty litigation.”

¹Includes the following pending litigation: Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. Nomura Credit & Capital, Inc. and Nomura Holding America Inc. (Supreme Court of the State of New York, County of New York, Case No. 651359/2013, filed on April 15, 2013).

About Ambac

Ambac Financial Group, Inc. (“Ambac” or “AFG”) is a financial services holding company headquartered in New York City. Ambac’s core business is a growing specialty P&C distribution and underwriting platform. Ambac also has a legacy financial guaranty business in runoff. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. For additional information please go to www.ambac.com.

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.

Forward-Looking Statements

In this press release, statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may,” or the negative of those expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts but instead represent only our beliefs regarding future events, which may by their nature be inherently uncertain and some of which may be outside our control. These statements may relate to plans and objectives with respect to the future, among other things which may change. We are alerting you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those indicated in the forward-looking statements include, among others, those discussed under “Risk Factors” in our most recent SEC filed quarterly or annual report.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230103005141/en/

Investors:

Charles J. Sebaski

Managing Director, Investor Relations

(212) 208-3177

csebaski@ambac.com

Media:

Kate Smith

Director, Corporate Communications

(212) 208-3452

ksmith@ambac.com

Source: Ambac Financial Group, Inc.

FAQ

What is the recent settlement amount for Ambac (AMBC) with Nomura?

Ambac reached a $140 million settlement with Nomura.

How will the Nomura settlement impact Ambac's financial results?

Ambac estimates a $43 million gain from the settlement, to be recorded in Q4.

What will Ambac (AMBC) do with the proceeds from the Nomura settlement?

The proceeds will be used to repay the entire outstanding balance of Tier 2 Notes.

What did Ambac's CEO say about the Nomura settlement?

Ambac's CEO expressed satisfaction, indicating it brings closure to all legacy RMBS litigation.

When is the Nomura settlement expected to be finalized for Ambac?

Funds from the settlement are anticipated to be received within 10 business days.