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Long-Term Debt (Notes) | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
Long-term Debt | 14. LONG-TERM DEBT The carrying value of long-term debt was as follows:
December 31 |  | 2015 |  | 2014
Ambac Assurance: |  |  |  |
5.1% surplus notes, general account, due 2020 |  | $ | 715,211 |  |  | $ | 696,330 |
5.1% surplus notes, segregated account, due 2020 |  | 31,725 |  |  | 30,479 |
5.1% junior surplus notes, segregated account, due 2020 |  | 247,443 |  |  | 244,307 |
Secured borrowing |  | 130,571 |  |  | — |
Ambac Assurance long-term debt |  | $ | 1,124,950 |  |  | $ | 971,116 |
Variable Interest Entities long-term debt |  | $ | 12,327,960 |  |  | $ | 12,882,076 |
Surplus Notes, General Account Ambac Assurance surplus notes, with a par amount of $881,496 and $893,300 at December 31, 2015 and 2014, respectively, are reported in long-term debt on the Consolidated Balance Sheet and have a scheduled maturity of June 7, 2020. In 2015, Ambac repurchased $11,804 par amount of these surplus notes. The loss on these repurchases was $1,246 and recognized in Net realized gains (losses) on extinguishment of debt of the Consolidated Statements of Total Comprehensive Income (Loss) for the year ended December 31, 2015. These surplus notes were issued in connection with the Settlement Agreement and were recorded at their fair value at the date of issuance. Since issuance, Predecessor Ambac had accreted the discount into earnings using the effective interest method, based on an imputed interest rate of 53.9% at the date of issuance. The carrying values of these surplus notes were adjusted to fair value as of the Fresh Start Reporting Date. Subsequent to the Fresh Start Reporting Date, Successor Ambac has accreted the discount based on an imputed interest rate of 10.5%. All payments of principal and interest on the Ambac Assurance 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. OCI disapproved the requests of Ambac Assurance to pay interest on the outstanding Ambac Assurance surplus notes on their respective scheduled interest payment dates since their issuance. Surplus Notes, Segregated Account The Segregated Account surplus notes, with a par amount of $39,102 and $39,102 at December 31, 2015 and 2014, respectively, are reported in long-term debt on the Consolidated Balance Sheets and have a scheduled maturity of June 7, 2020. These surplus notes were recorded at their fair value at the date of issuance. Since issuance, Predecessor Ambac had accreted the discount into earnings using the effective interest method, based on an imputed interest rate of 52.8% at the date of issuance. The carrying values of these surplus notes were adjusted to estimated fair value as of the Fresh Start Reporting Date. Subsequent to the Fresh Start Reporting Date, Successor Ambac has accreted the discount based on an imputed interest rate of 10.5%. 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. OCI disapproved of the requests of the Rehabilitator of the Segregated Account, acting for and on behalf of the Segregated Account, to pay interest on the outstanding Segregated Account surplus notes on their respective scheduled interest payment dates since their issuance. As described in Note 1. Background and Business Description, the Rehabilitator redeemed certain Segregated Account surplus notes (other than junior surplus notes) on November 20, 2014 at a redemption price that included an amount equal to principal plus accrued interest on such redeemed surplus notes. Such redemption also triggered similar proportionate redemption payments on Ambac Assurance surplus notes. The redemption of surplus notes resulted in a charge representing the accelerated recognition of the unamortized discount on the redeemed surplus notes. The unamortized discount on the redeemed portion of Segregated Account and General Account surplus notes were $3,134 and $71,590, respectively, and recognized in Net realized gains (losses) on extinguishment of debt of the Consolidated Statements of Total Comprehensive Income (Loss) for the year ended December 31, 2014. Junior Surplus Notes, Segregated Account The Segregated Account junior surplus notes, with a par value of $378,039 and $378,039 at December 31, 2015 and 2014, respectively, are reported in long-term debt on the Consolidated Balance Sheets and have a scheduled maturity of June 7, 2020, subject to the following restrictions. Principal and interest payments on these junior surplus notes cannot be made until all Ambac Assurance (General Account) and Segregated Account surplus notes are paid in full and after all Segregated Account future and existing senior indebtedness, policy and other priority claims have been paid in full. All payments of principal and interest on the junior surplus notes are subject to the prior approval of the OCI. If the OCI does not approve the payment of interest on the junior surplus notes, such interest will accrue and compound annually until paid. No such approval has been sought or obtained to pay interest on junior surplus notes since their issuance.
• | Par value at December 31, 2015 and 2014 includes $28,039 of junior surplus notes issued in connection with a settlement agreement (the “OSS Settlement Agreement”) entered into among Ambac, Ambac Assurance, the Segregated Account and One State Street, LLC (“OSS”) with respect to the termination of Ambac’s office lease with OSS. On May 1, 2013, the outstanding principal amount was reduced by $8,043 based on the value of distribution that OSS received on account of its allowed claim in Ambac’s bankruptcy case. The principal balance of these notes shall, according to its terms, be further reduced based on rents paid after December 31, 2015 to OSS. In 2015, Ambac Assurance modified this lease agreement to remain through 2019. Part of the the junior surplus notes issued on May 19, 2011 ($13,056 par value) will be reduced periodically as rent payments are made by Ambac Assurance beginning in January 2016. These junior surplus notes were recorded at their fair value at the dates of issuance. Since issuance, Predecessor Ambac had accreted the discount into earnings using the effective interest method, based on an imputed interest rate of 58.3% at the date of issuance. The carrying values of these surplus notes were adjusted to estimated fair value as of the Fresh Start Reporting Date. Subsequent to the Fresh Start Reporting Date, Successor Ambac has accreted the discount based on an imputed interest rate of 19.5%.
• | Par value at December 31, 2015 and 2014 includes $350,000 face amount of a junior surplus note originally issued to Ambac pursuant to Ambac's Reorganization Plan in accordance with the Mediation Agreement and that Ambac sold to a Trust on August 28, 2014 (as further described in Note 1. Background and Business Description). This junior surplus note was recorded at a discount to par based on its fair value on August 28, 2014. Ambac is accreting the discount on this junior surplus note into earnings using the effective interest method, based on an imputed interest rate of 8.4%.
Secured Borrowing The secured borrowing, with a par value of $132,467 at December 31, 2015, is reported in long-term debt on the Consolidated Balance Sheets and has a legal maturity of July 25, 2047. Interest on the secured borrowing is payable monthly at an annual rate of one month LIBOR + 2.8%. Refer to Note 4. Special Purpose Entities, Including Variable Interest Entities for further discussion on the secured borrowing transaction. Variable Interest Entities, Long-term Debt The variable interest entity notes were issued by consolidated VIEs. 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 payments on these debt obligations in the event that the issuer defaults on any principal or interest due. 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 $10,803,729 and $11,925,499 as of December 31, 2015 and 2014, respectively. The range of final maturity dates of the outstanding long-term debt associated with these VIEs is November 2018 to December 2047 as of December 31, 2015, and March 2015 to December 2047 as of December 31, 2014. As of December 31, 2015 and 2014, the interest rates on these VIEs’ long-term debt ranged from 0.96% to 13.00% and from 0.69% to 13.00%, respectively. Final maturities of VIE long-term debt for each of the five years following December 31, 2015 are as follows: 2016-$0; 2017-$0; 2018-$153,978; 2019-$363,498; 2020-$60,665.

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