ABK: ONLY 1% chance they won’t default!!!

By Daniel at 16 November, 2009, 8:52 pm

“Nov. 16 (Bloomberg) — Ambac Financial Group Inc.’s bond- insurance unit faces a 99 percent chance of default, credit derivatives show, as financial institutions brace for the second-largest bond insurer to file a capital update with regulators later today.

Swap Payouts

Delinquency proceedings against the company would trigger termination payouts of $23.1 billion by its insurance unit on credit-default swap contracts, Ambac said in a filing earlier this month. Ambac also may be required to accelerate the payment of $1.6 billion of holding-company debt, the New York-based bond insurer said in the filing.

To prevent takeovers, insurers have paid holders to tear up credit-default swap contracts on their poorest-performing securities.
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http://www.bloomberg.com/apps/news?pid=20601087&sid=avlxowh6BwPM&@#$%&!=7