Bond-Insurer Ambac Getting Crushed After Skipping Interest Payment And Warning Of Bankruptcy

ambac

Ambac’s board has refused to make an interest payment on the company’s debt signaling that the company may be about to go bankrupt, according to to a release from the company.

Ambac is trading down 55% in the pre-market on the news.

The company has long been a potential default risk, and was, in fact, the financial industry’s most likely to default company in May.

There was some recent positivity around the company based on the belief it would make money from its bond insurance positions related to the mortgage putback crisis.

Here’s the bullish case for the bond insurers >

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.

Tagged In

clusterstock-us