Ambac settles with Nomura, closing financial crisis-era RMBS lawsuits
Jan. 03, 2023 8:52 AM ETAmbac Financial Group, Inc. (AMBC), NMRBAC, MBI, AGOBy: Liz Kiesche, SA News Editor6 Comments
- Ambac Financial Group (NYSE:AMBC) shares jumped 3.1% in Tuesday premarket trading after its Assurance Corporation subsidiary (AAC) entered into a settlement agreement with Nomura (NYSE:NMR) that will give AAC $140M.
- The settlement brings to an end all of Ambac's (AMBC) legacy residential mortgage-backed securities representation and warranty litigation that arose from the 2008 financial crisis. In October, Bank of America (BAC) agreed to pay Ambac $1.8B to settle litigation related to mortgage company Countrywide's collapse during the crisis.
- The settlement exceeds the amount of recovery recorded on Ambac's (AMBC) Q3 2022 GAAP financial statements attributed to the Nomura (NMR) litigation. As a result, the company will record a gain of ~$43M in its Q4 financial statement.
- Last month, Street Insider reported that Assured Guaranty (AGO) and Ambac Financial (AMBC) had made bids for rival MBIA (MBI).