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Wednesday, May 18, 2022

Ambac Financial Group, Inc. (AMBC) stock surged in the Current market; here is why?

Ambac Financial Group, Inc. (AMBC) stock gained in the current market after announcing its public offering and updates from recent developments. AMBC’s share price is $9.88, gaining more than 19% compared to yesterday’s closing price. AMBC stock closed at $8.60 at the end of the last trading session. AMBC’s stock volume was around 1.22 million shares in the previous trading session. The current market cap of the company is about $470.32 million.


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AMBC: Share Repurchase Program

Ambac Financial Group, Inc. (AMBC) announced that its board of distorts has given a green signal to commence a share repurchase program in a press release. As per the program approval, the company intends to repurchase up to $20 million of the company’s common stock shares. March 31, 2024, is the ending period. 

AMBC: Updates about recent developments

Updates on the restructure of a large percentage of Ambac Financial Group’s Puerto Rico exposure have been released. Second, the company estimated the effect of recent court decisions on its representation and warranty (R&W) subrogation recoverable. They only affect Ambac’s heritage financial guaranty business, AAC. In both cases, Ambac’s consolidated financial results for the first quarter of 2022 are projected to be materially impacted.

Restructuring AAC’s Puerto Rico exposures have been a success, and the first quarter of 2022 consolidated financial results of Ambac should show a benefit in the region of $210 to $250 million.

Following an initial assessment by the company in the case of U.S. Bank National Association vs DLJ Mortgage Capital, Inc., which involved Home Equity Asset Trust 2007-1, a residential mortgage-backed securities trust (HEAT), management estimates that AAC’s estimated R&W subrogation recoveries would be reduced by $175 to $205 million.

Conclusion

The company decided to provide value to its shareholders through a share repurchase program. This will help them get more liquid assets that they can liquidate in the future to cover expenses like acquisitions or working capital. 

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