Ambac to sell legacy financial guarantee business

Ambac Financial Group signed a definitive agreement to sell its legacy financial guarantee businesses, Ambac Assurance Corporation and Ambac UK, to funds managed by Oaktree Capital Management for $420 million in cash. Additionally, Oaktree will receive warrants to acquire up to 9.9% of Ambac common stock at a strike price of $18.50.

“Three years ago, we announced our vision and strategy to transform Ambac into a specialty property and casualty insurance platform. The sale of our legacy financial guarantee business is the final step in that transition, and it enables us to focus solely on building a profitable P&C platform that will continue to deliver long-term value for our shareholders.” – Ambac President and Chief Executive Officer Claude LeBlanc.

“Oaktree is proud to partner with and support Ambac in its successful transformation. We recognize the progress AAC and AUK have made to de-risk their insurance liabilities, which will continue post-closing in partnership with the existing team.” – Oaktree Managing Director Greg Share.

The transaction’s closing remains subject to customary conditions, including regulatory approvals in the US and UK and approval by Ambac’s shareholders, and is expected to take place in the fourth quarter of 2024 or first quarter of 2025.