Ambac settles RMBS claims against Bank of America for $1.84 billion; expects gain of ~$390M

OCTAVE SPECIALTY GROUP INC

AAC settled all RMBS claims against Countrywide/Bank of America entities for $1.84 billion.
Estimated pre-tax gain of ~$390 million, net of reinsurance, discount accretion, and call premiums.
Proceeds to repay ~$1.21B in Sitka Notes and ~$213M in Tier 2 Notes.
Funds expected within 10 days after satisfaction of conditions including litigation dismissal.
Settlement materially exceeds the $1.38B subrogation recovery recorded as of 2Q 2022.

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