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Long-Term Debt | 12 Months Ended
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Dec. 31, 2011
Long-Term Debt [Abstract] |
Long-Term Debt | 12 LONG-TERM DEBT The carrying value of long-term debt was as follows:
|  | 2011 |  |  | 2010 |
Ambac Financial Group, Inc.: |  |  |  |  |  |  |  |
9-3/8% Debentures, due 2011 |  | $ | — |  |  | $ | — |
9.500% Senior Notes, due 2021 |  |  | — |  |  |  | — |
7-1/2% Debentures, due 2023 |  |  | — |  |  |  | — |
5.95% Debentures, due 2035 |  |  | — |  |  |  | — |
6.15% Directly-issued subordinated capital securities ("DISCs"), due 2087 |  |  | — |  |  |  | — |
5.95% Debentures, due 2103 |  |  | — |  |  |  | — |
5.875% Debentures, due 2103 |  |  | — |  |  |  | — |
Ambac long-term debt |  |  | — |  |  |  | — |
Ambac Assurance Corporation: |  |  |  |  |  |  |  |
5.1% surplus notes, general account, due 2020 |  |  | 213,790 |  |  |  | 203,195 |
5.1% surplus notes, segregated account, due 2020 |  |  | 6,020 |  |  |  | 5,065 |
5.1% junior surplus notes, segregated account, due 2020 |  |  | 3,791 |  |  |  | — |
Ambac Assurance long-term debt |  |  | 223,601 |  |  |  | 208,260 |
Variable Interest Entities: |  |  |  |  |  |  |  |
Total long-term debt |  | $ | 14,288,540 |  |  | $ | 16,101,026 |
In March 2008, Ambac issued 5,000,000 Corporate Units. Each Corporate Unit had a stated amount of $50 and initially consisted of (a) a Purchase Contract for Ambac common stock issued by Ambac and (b) a 5% beneficial ownership interest in $1,000 principal amount of Ambac's 9.50% Senior Notes due 2021, to be held by the Collateral Agent to secure the performance of the holder's obligations under the Purchase Contract. Pursuant to the Purchase Contract Agreement, the filing of bankruptcy constituted a termination event. As a result, the Purchase Contracts were terminated and the Corporate Units thereafter represented the rights of the Holders to receive their applicable ownership interests in the $250,000 Senior Notes. On November 16, 2010, Ambac filed a motion seeking an order approving the termination of the Purchase Contracts and the release of the Senior Notes. On November 30, 2010, the Bankruptcy Court approved the motion. Consequently, at December 31, 2011 and 2010, no Purchase Contracts are outstanding. Ambac's total debentures and DISCs listed above are in default due to the Company filing Chapter 11 bankruptcy in November 2010 and are included on the December 31, 2011 and 2010 Consolidated Balance Sheet under "Liabilities Subject to Compromise." Refer to Note 2 Significant Accounting Policies for carrying values. The Segregated Account had outstanding Segregated Account Surplus Notes in an aggregate par amount of $53,000, ($3,000 issued in March 2011) and a carrying value of $6,020 that are reported in long-term debt on the Consolidated balance sheet, based on an imputed interest rate of 52.8% at the date of the issuance and have a scheduled maturity of June 7, 2020. Interest on the Segregated Account Surplus Notes is payable annually in June at the rate of 5.1% on the unpaid principal balance outstanding. All payments of principal and interest on the Segregated Account Surplus Notes are subject to the prior approval of the OCI. If the OCI does not approve the payment of interest on the Segregated Account Surplus Notes, such interest will accrue and compound annually until paid. To the extent that interest payments are deferred for more than five years, a portion of the deferred interest may not be a tax deduction until paid or may be disallowed under the applicable high yield debt obligation provisions of the Code. The Segregated Account had outstanding Segregated Account Junior Surplus Notes with a par value of $36,082 (issued in May 2011) and a carrying value of $3,791 that are reported in long-term debt on the Consolidated balance sheet, based on an imputed interest rate of 58.3% at the date of the issuance and have a scheduled maturity of June 7, 2020. Interest on the Segregated Account Junior Surplus Notes is payable annually in June at the rate of 5.1% on the unpaid principal balance outstanding. No payment of interest on or principal of the Segregated Account Junior Surplus Notes may be made until all existing and future indebtedness of the Segregated Account, inclusive of Segregated Account Surplus Notes, policy claims and claims having statutory priority have been paid in full. All payments of principal and interest on the Junior Segregated Account Surplus Notes are subject to the prior approval of the OCI. If the OCI does not approve the payment of interest on the Segregated Account Junior Surplus Notes, such interest will accrue and compound annually until paid. Ambac Assurance has outstanding Surplus Notes in an aggregate par amount of $2,000,000 and a carrying value of $213,790 that are reported in long-term debt on the Consolidated Balance Sheet, based on an imputed interest rate of 53.9% at the date of the issuance and have a scheduled maturity of June 7, 2020. Interest on these notes is payable annually at the rate of 5.1% on the unpaid principal balance outstanding. All payments of principal and interest on the Surplus Notes are subject to the prior approval of the OCI. If the OCI does not approve the payment of interest on the Ambac Assurance Surplus Notes, such interest will accrue and compound annually until paid. Ambac Assurance entered into call option agreements with several CDS counterparties giving Ambac Assurance the right for a limited time to repurchase Surplus Notes with an aggregate face amount of $940,000 for an aggregate price of $232,000 plus accrued and unpaid interest. At December 31, 2011, these options have a weighted average maturity of approximately 8 months. Surplus note interest payments require the approval of OCI. On June 1, 2011 OCI issued its disapproval of the requests of Ambac Assurance and the Rehabilitator of the Segregated Account, acting for and on behalf of the Segregated Account, to pay interest on all outstanding Surplus Notes issued by Ambac and the Segregated Account on the first scheduled interest payment date of June 7, 2011. The variable interest entity notes were issued by consolidated VIEs. Generally, Ambac is the primary beneficiary of the VIEs as a result of providing financial guarantees on the variable interest notes. Consequently, Ambac has consolidated these variable interest entity notes and all other assets and liabilities of the VIEs. Ambac is not primarily liable for the debt obligations of these entities. Ambac would only be required to make these payments on these debt obligations in the event that the issuer defaults on any principal or interest due. Ambac's creditors do not have rights with regard to the assets of the VIEs. The total unpaid principal amount of outstanding long-term debt associated with VIEs consolidated as a result of the financial guarantee provided by Ambac was $15,337,407 and $18,372,283 as of December 31, 2011 and December 31, 2010, respectively. The range of final maturity dates of the outstanding long-term debt associated with these VIEs is February 2012 to December 2047 as of December 31, 2011. As of December 31, 2011, the interest rates on these VIEs' long-term debt ranged from 1.00% to 12.63%. At December 31, 2011 VIE notes outstanding also included certificates with a par value of $35,600 issued through a secured borrowing transaction. Interest on the secured borrowing is payable monthly at an annual rate of 6.65%. The effective interest rate on the secured borrowing is 8.97%. Under the transaction, certain RMBS securities owned and guaranteed by Ambac Assurance were deposited into a bankruptcy remote trust to collateralize and fund repayment of the debt. These securities are included in Invested assets on the Consolidated Balance Sheets and had a current par outstanding of $329,129 and fair value of $172,880 as of December 31, 2011. Interest and principal on the secured borrowing is payable from the first non-insurance proceeds from these pledged RMBS securities. Please refer to Note 3 for a detailed description of the VIEs. Final maturities of VIE long-term debt for each of the five years following December 31, 2011 are as follows: 2012—$194,522; 2013—$647,000; 2014—$180,996; 2015—$562,795; 2016—$0.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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