seekingalpha.com/news/...eaway-q2-may-developments-litigation
The more important news out of Ambac Financial's (AMBC +1.4%) preliminary Q2 results may be under the "other developments" regarding litigation against Bank of America (BAC), says BTIG Mark Palmer.
Ambac's representation and warranty (R&W) litigation against Bank of America is set for pre-trial motions on Sept. 27 with a trial scheduled to begin Feb. 15, 2019.
Palmer expects the companies to settle before the case goes to trial. In previous R&W cases with municipal bond insurers as plaintiffs and banks as defendants, "the serious negotiations have typically commenced following the conclusion of the summary judgment phase of the case," Palmer writes.
The summary judgment phase of AMBC's litigation against BAC/Countrywide ended on June 27.
Any settlement exceeding about $1.843B pledged to AMBC's secured notes and Tier 2 notes could be used to pay down additional secured notes, which have a coupon of LIBOR + 500, Palmer says.