Monday, November 01, 2010

ABK Ambac Slammed On Missed Paymet

Shares of ABK were down %40 in early trading as news crossed the wires that company had missed an interest payment. The company also disclaimed that they might file bankruptcy before the end of the year.

Ambac Slammed on bankruptcy warning

ABK said in a regulatory filing that its board decided not to make an interest payment that was due Monday on 7.50% debentures that mature May 1, 2023.

Ambac had $1.62 billion in debt at the end of June. It’s next interest payment is due on Nov. 15.
The company also said it hasn’t been able to raise new capital as an alternative to seeking bankruptcy protection from creditors.

Ambac has been working with an ad-hoc committee of senior debt holders to try to restructure its debt through a pre-packaged bankruptcy filing. If it can’t agree to such a plan, Ambac said it will file for Chapter 11 bankruptcy protection from creditors before the end of 2010.

As we can see pennystocks are unstable, and losses can happen.  Always consult an investment adviser before making an investment.

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