Ambac’s new Sitka launches senior secured notes due 2026

Chicago, June 24 – Ambac Financial Group, Inc. through its newly formed special purpose entity Sitka Holdings, LLC launched an offering of senior secured notes due 2026, according to a press release.

The new Sitka notes will be secured by all assets of the new issuer, which will include a secured note issued by Ambac Assurance Corp. to Sitka.

The Ambac note will in turn be secured by a pledge of Ambac Assurance’s right, title and interest in up to $1.4 billion of proceeds from certain litigations involving Ambac Assurance related to residential mortgage-backed securities and the capital stock of Ambac Assurance UK Ltd.

In addition, Ambac Assurance will issue a financial guaranty insurance policy to the trustee for the Sitka senior secured notes irrevocably guaranteeing all regularly scheduled principal and interest payments.

Proceeds, which are expected to be at least $1.162 billion, will be used to fund a portion of the full redemption of approximately $1.625 billion outstanding Ambac LSNI, LLC senior secured floating-rate notes and a portion of the secured note issued by Ambac Assurance concurrent with the issuance of the tier 1 notes.

Distribution will be through Rule 144A and Regulation S.

Ambac is a New York-based holding company that, via subsidiaries, provides financial guarantees to clients in the public and private sectors globally.

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