AMBAC Lives Another Day
Key Developments
- AMBAC shows signs of survival despite recent bankruptcy concerns
- Company reports $856M surplus, exceeding regulatory minimums
- Stock price jumps over 30% to $1.30
- $440 million tax refund provides additional lifeline
The Survival Story
Just when everyone thought AMBAC was down for the count, the bond insurer is showing surprising resilience. The company’s survival strategy hinges on two key factors: ongoing premium payments from insured municipalities and some unexpected help from Uncle Sam.
The Financial Roller-Coaster
Talk about a wild ride. Here’s how it played out:
- Third quarter shows unexpected capital gains
- Stock price surges over 30% to $1.30
- Bankruptcy rumors surface
- Company announces $856M surplus days later
The Government Lifeline
In a twist that few saw coming, AMBAC is getting a $440 million boost from the U.S. government. Thanks to recent legislation, they can now carry back their 2008 and 2009 losses all the way to 2004. Not a bad safety net when you need it.
The Remaining Risks
It’s not all smooth sailing yet. AMBAC’s survival still hangs on one crucial factor: avoiding major municipal defaults on their insured bonds. One or two big defaults could still tip the scales toward bankruptcy.
Looking Ahead
While the insurance industry typically runs on conservative stability, AMBAC’s recent trajectory has been anything but predictable. Wall Street analysts who predicted a capital shortfall below the $2 million regulatory minimum have been proven wrong – at least for now.
Want to see how AMBAC-insured bonds are trading? Check out the latest data on BondView.com