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Ambac Provides Updates to Shareholders


Ambac Financial Group, Inc. AMBC, +3.02% ("Ambac"), a holding company whose subsidiaries, including Ambac Assurance Corporation ("Ambac Assurance"), provide financial guarantees and other financial services, issued the following statement regarding the campaign by Canyon Capital Advisors ("Canyon") to replace Chairman Jeffrey S. Stein with their handpicked nominee.

Canyon has escalated their campaign once again with another series of shrill attacks. In our view, this is just another attempt to advance their credit-focused agenda to the detriment of Ambac shareholders. The facts are starkly inconsistent with their assertions:

  • Ambac has delivered outstanding operating performance. Our adjusted book value [[1]] per share has steadily and substantially increased from -$7.23 to $24.78, and book value per share from $6.38 to $37.41, since our emergence from bankruptcy in 2013. We also have delivered more than $2.5 billion in operating income [[2]] , or $54.73 per fully diluted share, and $1.5 billion in net income, or $31.94 per fully diluted share, since emerging from bankruptcy in 2013.
  • We have aggressively and successfully managed risk. Our net par exposure has decreased by $88 billion, or 45%, since emergence from bankruptcy, and by 25% in 2015 alone, including a 23% reduction in adversely classified credits. We have secured strong results for our shareholders in litigation, including the $995 million cash settlement in our RMBS litigation with J.P. Morgan.
  • Our Board and governance are strong. We have nominated six seasoned and successful executives with diverse and relevant skills and experience, four of whom have been added to the Board since April 2015, five of whom are independent and all of whom are united in their goal of maximizing value for all stockholders.
  • Canyon's campaign is also focused on ousting our CEO, Nader Tavakoli. Because Ambac's outstanding operating results leave them no room for criticism, they instead have tried to inflame shareholders with various attacks on compensation. Ambac has provided a detailed, fact-based outline of Mr. Tavakoli's compensation, which is within market norms and compares favorably with Ambac's most direct competitors, in documents filed with the SEC a few weeks ago. These documents can be found at
  • Our relationship with our regulator has been -- and will be -- key to our success. We have gained an increased flexibility to manage our business, which has helped drive our operational outperformance. We are focused on prudent use of our capital - and we believe Canyon's argument that Ambac has excess capital that is being "hoarded" is deliberately and misleadingly ignorant of the fact that no distributions occur without the approval of the regulator, who has a focus on the long-term policy obligations of Ambac Assurance.

Canyon has launched a distracting and costly campaign, and has constantly been on the attack, yet they claim that they don't want to change the direction of the board. We find that claim disingenuous and misleading. Canyon launched a proxy fight to replace half of the board, but quickly withdrew two of its three nominees, likely due to various issues with those nominees.

Canyon also says that they are not trying to change the CEO, but they then slip in a statement revealing their true agenda (they are not seeking CEO change "at this time"). Canyon's frequent attacks on the CEO, which appear to coincide with various actions taken by Mr. Tavakoli on behalf of Ambac's shareholders that did not benefit Canyon's narrow interests, belie the fact that Canyon's credit position dominates its equity position in Ambac.

Finally, and most notably, Canyon has continued to aggressively pursue their fight, focusing on replacing the Chairman of Ambac, Jeffrey S. Stein, who has developed a constructive relationship with our chief regulator, established a strong governance framework, attracted four new independent directors and delivered substantially reduced risk and operational outperformance -- with our fourth quarter 2015 serving as clear evidence of the success of those efforts, and a signal that we are on the right track to continue to deliver shareholder value.

No wonder over 20% of Ambac's shareholders have already rejected Canyon's campaign and have publicly supported Mr. Stein and the Ambac Board. Canyon has a position in debt securities either issued or insured by Ambac that is more than ten times larger than its equity position. The fact that they have continued their campaign to install their nominee despite the recent addition of two new stockholder-supported directors demonstrates to us that their focus is on advancing an agenda that is not aligned with the interests of all stockholders.

Ambac urges stockholders to vote the WHITE proxy card in favor of our highly-qualified nominees who are all focused on maximizing value for all stockholders. Ambac strongly encourages stockholders to visit "" to find additional important information. We appreciate the feedback and dialogue that we have received from shareholders, and remain laser-focused on delivering sustained value to them.

Important Information

Ambac Financial Group, Inc., ("Ambac") filed a definitive proxy statement with the Securities and Exchange Commission ("SEC") in connection with its 2016 Annual Meeting on April 20, 2016. STOCKHOLDERS ARE URGED TO READ THIS PROXY STATEMENT, THE ACCOMPANYING WHITE PROXY CARD AND OTHER RELEVANT DOCUMENTS FILED BY AMBAC WITH THE SEC IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain free copies of these documents through the website maintained by the SEC at and through the website maintained by Ambac at

Certain Information Regarding Participants

Ambac, its directors and certain of its officers and other employees may be deemed to be participants in the solicitation of Ambac's stockholders in connection...