* Transfers certain AAC liabilities to seperate unit
* Says has sufficient liquidity till Q2 March 2011
(Adds details)
March 25 (Reuters) - Troubled U.S. bond insurer Ambac Financial Group Inc said on Thursday it was open to seeking a negotiated restructuring of its debt through a pre-packaged bankruptcy proceeding.
The company said it would transfer certain liabilities of its principal unit Ambac Assurance Corp (AAC) to a seperate account following a directive from Wisconsin insurance regulator.
The Office of the Commissioner of Insurance of the State of Wisconsin (OCI) informed Ambac that transfer was necessary to address AAC's financial position, the company said in a statement.
Some of AAC's policies relating to credit derivatives, residential mortgage-backed securities and other structured finance transactions will be transferred to a segregated account backed by a $2 billion secured note issued by AAC.
The proposed settlement agreement with the counterparties provides that AAC will pay about $2.6 billion in cash and $2 billion of newly issued surplus notes.
Ambac said it did not believe the segregated account rehabilitation constituted an event of default under its bond indenture and that it was highly unlikely that AAC would be able to make dividend payments to Ambac for the foreseeable future.
Management believes that it will have sufficient liquidity to satisfy its needs through the second quarter of 2011, Ambac said.
(Reporting by Sakthi Prasad in Bangalore, editing by Will Waterman) Keywords: AMBACFINANCIALGROUP/ (sakthi.prasad@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: sakthi.prasad.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
* Says has sufficient liquidity till Q2 March 2011
(Adds details)
March 25 (Reuters) - Troubled U.S. bond insurer Ambac Financial Group Inc said on Thursday it was open to seeking a negotiated restructuring of its debt through a pre-packaged bankruptcy proceeding.
The company said it would transfer certain liabilities of its principal unit Ambac Assurance Corp (AAC) to a seperate account following a directive from Wisconsin insurance regulator.
The Office of the Commissioner of Insurance of the State of Wisconsin (OCI) informed Ambac that transfer was necessary to address AAC's financial position, the company said in a statement.
Some of AAC's policies relating to credit derivatives, residential mortgage-backed securities and other structured finance transactions will be transferred to a segregated account backed by a $2 billion secured note issued by AAC.
The proposed settlement agreement with the counterparties provides that AAC will pay about $2.6 billion in cash and $2 billion of newly issued surplus notes.
Ambac said it did not believe the segregated account rehabilitation constituted an event of default under its bond indenture and that it was highly unlikely that AAC would be able to make dividend payments to Ambac for the foreseeable future.
Management believes that it will have sufficient liquidity to satisfy its needs through the second quarter of 2011, Ambac said.
(Reporting by Sakthi Prasad in Bangalore, editing by Will Waterman) Keywords: AMBACFINANCIALGROUP/ (sakthi.prasad@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: sakthi.prasad.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.