# EDGAR Filing Document

**Accession Number:** 0000874501
**File Stem:** 0000874501-23-000002
**Filing Date:** 2023-1
**Character Count:** 14859
**Document Hash:** 302e959200c971771178e592133c8ef6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000874501-23-000002.hdr.sgml**: 20230103

**ACCESSION NUMBER**: 0000874501-23-000002

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20221229

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

**FILED AS OF DATE**: 20230103

**DATE AS OF CHANGE**: 20230103

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** AMBAC FINANCIAL GROUP INC
- **CENTRAL INDEX KEY:** 0000874501
- **STANDARD INDUSTRIAL CLASSIFICATION:** SURETY INSURANCE [6351]
- **IRS NUMBER:** 133621676
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-10777
- **FILM NUMBER:** 23500382

**BUSINESS ADDRESS:**
- **STREET 1:** ONE WORLD TRADE CENTER
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10007
- **BUSINESS PHONE:** 2126587470

**MAIL ADDRESS:**
- **STREET 1:** ONE WORLD TRADE CENTER
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10007

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AMBAC INC /DE/
- **DATE OF NAME CHANGE:** 19930328

?xml version="1.0" ? ambc-20221229

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

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| | |
|:---|:---|
| **FORM** | **8-K** |

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**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Date of Report (Date of earliest event reported): December 29, 2022** 

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| |
|:---|
| Ambac Financial Group, Inc. |
| **(Exact name of Registrant as specified in its charter)** |

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| | | |
|:---|:---|:---|
| **Delaware** | **1-10777** | **13-3621676** |
| **(State of incorporation)** | **(Commission<br>file number)** | **(I.R.S. employer<br>identification no.)** |

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| | | | |
|:---|:---|:---|:---|
| **One World Trade Center** | **New York** | **NY** | **10007** |
| **(Address of principal executive offices)** | **(Address of principal executive offices)** | **(Address of principal executive offices)** | **(Address of principal executive offices)** |

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| | |
|:---|:---|
| **(212)** | **658-7470** |
| **(Registrant's telephone number, including area code)** | **(Registrant's telephone number, including area code)** |

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17 CFR 240.13e-4c))

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| | | |
|:---|:---|:---|
| Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: |
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| Common stock, par value $0.01 per share | AMBC | New York Stock Exchange |
| Warrants | AMBC WS | New York Stock Exchange |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).

Emerging growth company ☐

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| | |
|:---|:---|
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to |
| Section 13(a) of the Exchange Act. | ☐ |

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**Item 1.01. Entry in a Material Definitive Agreement.**

On December 29, 2022, Ambac Assurance Corporation ("AAC") entered into a Settlement Agreement and Release (the "Settlement Agreement") with Nomura Credit & Capital, Inc. ("Nomura") to settle its litigation against Nomura (Supreme Court of the State of New York, County of New York, Case No. 651359/2013, filed on April 15, 2013) concerning certain residential mortgage-backed securities ("RMBS") trusts (the "Trusts"). Pursuant to the Settlement Agreement, Nomura will make a cash payment to AAC of $140 million (one hundred forty million dollars) within ten (10) business days, and AAC and Nomura agreed to release each other and their respective affiliates and related persons from any claims relating to the Trusts, the financial guaranty policies issued by AAC in connection with Trusts (other than AAC's obligations to pay insurance claims under such policies), the securities related to the Trusts, and the mortgage loans related to the Trusts.

**Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement** 

On February 12, 2018, AAC issued $240 million aggregate principal amount of 8.5% Senior PIK Notes due 2055 (the "Tier 2 Notes") under an Indenture, dated as of February 12, 2018, by and between AAC and The Bank of New York Mellon, as trustee and as note collateral agent. The Tier 2 Notes are secured by proceeds from RMBS litigations net of reinsurance ("Net Proceeds") in excess of $1.6 billion and are subject to mandatory redemption from Net Proceeds in excess of $1.6 billion within five business days after the receipt of such Net Proceeds. Effective October 29, 2022 AAC applied Net Proceeds of approximately $213 million (two hundred thirteen million dollars) from the Settlement Agreement and Release with Bank of America Corporation and certain affiliates thereof to redeem Tier 2 Notes plus accrued and unpaid interest as of the date of redemption. AAC plans to apply the Net Proceeds of $140 million (one hundred forty million dollars) from the Settlement Agreement with Nomura plus approximately $5 million (five million dollars) from other sources to fully redeem the remaining Tier 2 Notes plus accrued and unpaid interest in the amount of approximately $145 million (one hundred forty five million dollars) as of the date of redemption.

**Forward-Looking Statements**

In this report, 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.

Any or all of management's forward-looking statements here or in other publications may turn out to be incorrect and are based on management's current belief or opinions. Ambac Financial Group's ("AFG") and its subsidiaries' (collectively, "Ambac" or the "Company") actual results may vary materially, and there are no guarantees about the performance of Ambac's securities. Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the highly speculative nature of AFG's common stock and volatility in the price of AFG's common stock; (2) uncertainty concerning the

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Company's ability to achieve value for holders of its securities, whether from Ambac Assurance Corporation ("AAC") and its subsidiaries or from the specialty property and casualty program insurance business, the insurance distribution business, or related businesses; (3) inadequacy of reserves established for losses and loss expenses and possibility that changes in loss reserves may result in further volatility of earnings or financial results; (4) potential for rehabilitation proceedings or other regulatory intervention against AAC; (5) credit risk throughout Ambac's business, including but not limited to credit risk related to insured residential mortgage-backed securities, student loan and other asset securitizations, public finance obligations (including risks associated with Chapter 9 and other restructuring proceedings), issuers of securities in our investment portfolios, and exposures to reinsurers; (6) our inability to effectively reduce insured financial guarantee exposures or achieve recoveries or investment objectives; (7) our inability to generate the significant amount of cash needed to service our debt and financial obligations, and our inability to refinance our indebtedness; (8) Ambac's substantial indebtedness could adversely affect its financial condition and operating flexibility; (9) Ambac may not be able to obtain financing or raise capital on acceptable terms or at all due to its substantial indebtedness and financial condition; (10) the impact of catastrophic public health, environmental or natural events, including events like the COVID-19 pandemic, or global or regional conflicts, on significant portions of our insured portfolio; (11) failure to recover claims paid on Puerto Rico exposures or realization of losses in amounts higher than expected; (12) credit risks related to large single risks, risk concentrations and correlated risks; (13) risks associated with adverse selection as Ambac's financial guarantee insurance portfolio runs off; (14) the risk that Ambac's risk management policies and practices do not anticipate certain risks and/or the magnitude of potential for loss; (15) restrictive covenants in agreements and instruments that impair Ambac's ability to pursue or achieve its business strategies; (16) adverse effects on operating results or the Company's financial position resulting from measures taken to reduce financial guarantee risks in its insured portfolio; (17) disagreements or disputes with Ambac's insurance regulators; (18) loss of control rights in transactions for which we provide financial guarantee insurance; (19) adverse tax consequences or other costs resulting from the characterization of the AAC's surplus notes or other obligations as equity; (20) risks attendant to the change in composition of securities in the Ambac's investment portfolio; (21) adverse impacts from changes in prevailing interest rates; (22) events or circumstances that result in the impairment of our intangible assets and/or goodwill that was recorded in connection with Ambac's acquisition of 80% of the membership interests of Xchange Benefits, LLC; (23) risks associated with the expected discontinuance of the London Inter-Bank Offered Rate; (24) factors that may negatively influence the amount of installment premiums paid to Ambac; (25) risks relating to determinations of amounts of impairments taken on investments; (26) the risk of litigation and regulatory inquiries or investigations, and the risk of adverse outcomes in connection therewith; (27) actions of stakeholders whose interests are not aligned with broader interests of Ambac's stockholders; (28) system security risks, data protection breaches and cyber attacks; (29) regulatory oversight of Ambac Assurance UK Limited ("Ambac UK") and applicable regulatory restrictions may adversely affect our ability to realize value from Ambac UK or the amount of value we ultimately realize; (30) failures in services or products provided by third parties; (31) our inability to attract and retain qualified executives, senior managers and other employees, or the loss of such personnel; (32) fluctuations in foreign currency exchange rates; (33) failure to realize our business expansion plans or failure of such plans to create value; (34) greater competition for our specialty property & casualty program insurance business; (35) loss or lowering of the AM Best rating for our property and casualty insurance company subsidiaries; (36) disintermediation within the insurance industry or greater competition that negatively impacts our managing general agency/underwriting business; (37) changes in law or in the functioning of the healthcare market that impair the business model of our accident and health managing general underwriter; and (38) other risks and uncertainties that have not been identified at this time.

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**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit**<br>**Number** |<br>**Exhibit Description** |
| 101.INS | XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | XBRL Taxonomy Extension Schema Document. |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags or embedded within the Inline XBRL document |

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**SIGNATURES** 

**Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.** 

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| | | | |
|:---|:---|:---|:---|
| | | **Ambac Financial Group, Inc.** | **Ambac Financial Group, Inc.** |
| | | **(Registrant)** | **(Registrant)** |
| **Dated:** | **January 3, 2022** | **By:** | **/s/ William J. White** |
|  |  |  | **William J. White** |
|  |  |  | **First Vice President, Secretary and Assistant General Counsel** |

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