Item 7.01. Regulation FD Disclosure.
On December 18, 2020, Ambac Assurance Corporation filed a motion in the
litigation captioned, Ambac Assurance Corporation and The Segregated Account of
Ambac Assurance Corporation v. Countrywide Home Loans, Inc., Countrywide
Securities Corp., Countrywide Financial Corp. (n.k.a. Bank of America Home
Loans) and Bank of America Corp. (Supreme Court of the State of New York, County
of New York (Case No. 651612/2010)), seeking postponement of the trial,
previously set to begin on February 22, 2021, due in part to the health risks
for trial participants presently posed by the COVID-19 pandemic. On December 23,
2020, the trial court granted the motion and postponed the trial, without
setting a new trial date, until a trial may be safely held.
On December 4, 2020, the trial court in the same case issued a decision and
order granting defendant Countrywide's motion for summary judgment with respect
to Ambac Assurance's fraud claim, resulting in its dismissal. On December 17,
2020, Ambac Assurance filed a Notice of Appeal from the decision and order with
the Appellate Division of the Supreme Court, First Department.
Forward-Looking Statements
In this report, statements that may constitute "forward-looking statements"
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as "estimate," "project," "plan,"
"believe," "anticipate," "intend," "planned," "potential" and similar
expressions, or future or conditional verbs such as "will," "should," "would,"
"could," and "may," or the negative of those expressions or verbs, identify
forward-looking statements. We caution readers that these statements are not
guarantees of future performance. Forward-looking statements are not historical
facts but instead represent only our beliefs regarding future events, which may
by their nature be inherently uncertain and some of which may be outside our
control. These statements may relate to plans and objectives with respect to the
future, among other things which may change. We are alerting you to the
possibility that our actual results may differ, possibly materially, from the
expected objectives or anticipated results that may be suggested, expressed or
implied by these forward-looking statements. Important factors that could cause
our results to differ, possibly materially, from those indicated in the
forward-looking statements include, among others, those discussed under "Risk
Factors" in our most recent SEC filed quarterly or annual report.
Any or all of management's forward-looking statements here or in other
publications may turn out to be incorrect and are based on management's current
belief or opinions. Ambac's actual results may vary materially, and there are no
guarantees about the performance of Ambac's securities. Among events, risks,
uncertainties or factors that could cause actual results to differ materially
are: (1) the highly speculative nature of Ambac's common stock and volatility in
the price of Ambac's common stock; (2) uncertainty concerning the Company's
ability to achieve value for holders of its securities, whether from Ambac
Assurance Corporation ("Ambac Assurance") and its subsidiaries or from
transactions or opportunities apart from Ambac Assurance and its subsidiaries,
including new business initiatives; (3) changes in Ambac Assurance's estimated
representation and warranty recoveries or loss reserves over time; (4) failure
to recover claims paid on Puerto Rico exposures or incurrence of losses in
amounts higher than expected; (5) adverse effects on Ambac's share price
resulting from future offerings of debt or equity securities that rank senior to
Ambac's common stock; (6) potential of rehabilitation proceedings against Ambac
Assurance; (7) dilution of current shareholder value or adverse effects on
Ambac's share price resulting from the issuance of additional shares of common
stock; (8) inadequacy of reserves established for losses and loss expenses and
possibility that changes in loss reserves may result in further volatility of
earnings or financial results; (9) increased fiscal stress experienced by
issuers of public finance obligations or an increased incidence of Chapter 9
filings or other restructuring proceedings by public finance issuers,
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including an increased risk of loss on revenue bonds of distressed public finance issuers due to recent judicial decisions adverse to revenue bond holders; (10) the Company's inability to realize the expected recoveries included in its financial statements; (11) insufficiency or unavailability of collateral to pay secured obligations; (12) credit risk throughout the Company's business, including but not limited to credit risk related to residential mortgage-backed securities, student loan and other asset securitizations, public finance obligations (including obligations of the Commonwealth of Puerto Rico and its instrumentalities and agencies) and exposures to reinsurers; (13) credit risks related to large single risks, risk concentrations and correlated risks; (14) the risk that the Company's risk management policies and practices do not anticipate certain risks and/or the magnitude of potential for loss; (15) risks associated with adverse selection as the Company's insured portfolio runs off; (16) adverse effects on operating results or the Company's financial position resulting from measures taken to reduce risks in its insured portfolio; (17) disagreements or disputes with Ambac'a insurance regulators; (18) our inability to mitigate or remediate losses, commute or reduce insured exposures or achieve recoveries or investment objectives, or the failure of any transaction intended to accomplish one or more of these objectives to deliver anticipated results; (19) the Company's substantial indebtedness could adversely affect its financial condition and operating flexibility; (20) the Company may not be able to obtain financing or raise capital on acceptable terms or at all due to its substantial indebtedness and financial condition; (21) the Company may not be able to generate the significant amount of cash needed to service its debt and financial obligations, and may not be able to refinance its indebtedness; (22) restrictive covenants in agreements and instruments may impair the Company's ability to pursue or achieve its business strategies; (23) loss of control rights in transactions for which we provide insurance due to a finding that Ambac Assurance has defaulted; (24) the impact of catastrophic environmental or natural events including catastrophic public health events like the COVID-19 pandemic, on significant portions of our insured portfolio; (25) adverse tax consequences or other costs resulting from the characterization of the Company's surplus notes or other obligations as equity; (26) risks attendant to the change in composition of securities in the Company's investment portfolio; (27) changes in prevailing interest rates; (28) the expected discontinuance of the London Inter-Bank Offered Rate; (29) factors that may influence the amount of installment premiums paid to the Company; (30) default by one or more of Ambac Assurance's portfolio investments, insured issuers or counterparties; (31) market risks impacting assets in the Company's investment portfolio or the value of our assets posted as collateral in respect of interest rate swap transactions; (32) risks relating to determinations of amounts of impairments taken on investments; (33) the risk of litigation and regulatory inquiries or investigations, and the risk of adverse outcomes in connection therewith, which could have a material adverse effect on the Company's business, operations, financial position, profitability or cash flows; (34) actions of stakeholders whose interests are not aligned with broader interests of the Company's stockholders; (35) system security risks, data protection breaches and cyber attacks; (36) changes in accounting principles or practices that may impact the Company's reported financial results; (37) the economic and regulatory impact of "Brexit"; (38) operational risks, including with respect to internal processes, risk and investment models, systems and employees, and failures in services or products provided by third parties; (39) the Company's financial position that may prompt departures of key employees and may impact the Company's ability to attract qualified executives and employees; (40) fluctuations in foreign currency exchange rates could adversely impact the insured portfolio in the event of loss reserves or claim payments denominated in a currency other than US dollars and the value of non-US dollar denominated securities in our investment portfolio; and (41) other risks and uncertainties that have not been identified at this time.


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