Approval for Call Options for Ambac

Ambac Assurance has stated that it has finally got the approval that the company needed form the authorities involved in order to have the ability to use call options in order buy around 939 million dollars in aggregate par amount of surplus papers that was released on the 7th of June, 2 years ago in 2012 for a payment that equal 278 million dollars. These authorities are the commissioner office of Wisconsin, the OCI and the Rehabilitator. This comes as a result of the announcement that was made by the company on the 10th of May of this year, as the company stated that the directors agree on using call options to purchase such notes.

Although the Rehabilitator and the OCI has given the company the needed approvals, but such approvals will only become effective once the state’s Circuit Court gives its blessings as well. In fact, following such approvals, the Rehabilitator has started to take actions in the Rehabilitation Court in order to get such approvals from the court. Besides that, the Rehabilitator has stated that he is looking forwards to gain the approval of the Rehabilitation Court in order to create partial interim policy claim payments to the segregated account policyholders. If these payments are ok with the court, according to the directions of the Rehabilitator, the company will start to pay off the ¼ of every policy claim that has been filed since the beginning of the rehabilitation actions for the segregated accounts. Besides that, it will pay ¼ of every claim that will be filed in the future after the finishing of such rehabilitation proceedings.

The analysts at the company have announced that they predict that the company will initiate paying these payments by the 3rd quarter of this year, around the 31st of March. Despite the fact that there were plans that were predicted to take effect, these plans were approved by the court and it stated that the company will pay ¼ of the claims in cash, and 75 percent in surplice notes, but these plans haven’t been implemented so far. There hasn’t been any announcement or statement regarding the implementing of this plan, and how will this plan affect the Rehabilitation plan in progress. According to the Rehabilitator, details and information regarding all of this will be announced when they see fitting. The Rehabilitator is also looking forward for the court to approve a presented settlement that has the terms that was included in an offer that was presented by the IRS to the United States govt. regarding the unresolved disputes regarding the tax treatments of swap contracts.