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Ambac unit gets 60 more days to negotiate rehabilitation plan

A special deputy commissioner charged with providing guidance in an Ambac Financial Group Inc. subsidiary's rehabilitation plan recommended 60 more days to negotiate with stakeholders.

Originally, Ambac Assurance Corp. Segregated Account had until March 31 to finalize a plan, but after regulators reviewed the plan, they recommended more time, according to a regulatory filing.

Shares of Ambac Financial Group fell about 13% in December after the company’s regulator said Ambac Assurance Corp. had insufficient capital to show that the segregated account could exit rehabilitation "at present, absent further actions," BTIG analyst Mark Palmer wrote in an April 10 note.

If a consensual plan acceptable to the regulator is not developed in the next 60 days, the regulator might develop its own plan that will provide for a durable exit and that is protective of policyholders, according to the regulator.