Business Context and Reporting Period
Company: Ambac Financial Group, Inc. (Note: Metadata referenced Octave Specialty Group Inc, but filing text identifies Ambac Financial Group, Inc.)
Reporting Period: October 31, 2025
Event: Completion of the acquisition of ArmadaCorp Capital, LLC and entry into a new credit agreement to fund the transaction.
Key Financial Metrics and Transaction Details
- Total Acquisition Consideration: Approximately $250,000,000.
- Financing Structure:
- Term Loan: $100,000,000 (Senior Secured).
- Revolving Facility Draw: $20,000,000 (Senior Secured).
- Cash on Hand: Remaining balance of the purchase price.
- Credit Facility Total: $120,000,000 aggregate original principal amount ($100M Term Loan + $20M Revolver).
- Interest Rates:
- SOFR-based: Term SOFR + 2.25% to 2.75% margin.
- Alternate Base Rate: Base Rate + 1.25% to 1.75% margin.
- Commitment Fee: 0.375% to 0.50% per annum on unused revolver portion.
- Liquidity Requirement: Ambac Financial Group, Inc. must maintain unrestricted cash and cash equivalents of at least $10,000,000 to support the guarantee.
Material Changes and Covenants
The filing reports the creation of a direct financial obligation and the acquisition of assets. Key financial maintenance covenants include:
- Consolidated Total Net Leverage Ratio: Not greater than 4.00 to 1.00.
- Consolidated Fixed Charge Coverage Ratio: Not less than 1.20 to 1.00.
- Testing Frequency: Quarterly, commencing with the fiscal quarter ending March 31, 2026.
- Maturity: Revolving Facility matures in five years; Term Loan amortizes quarterly starting March 31, 2026, with a balloon payment at the five-year anniversary.
Outlook, Risks, and Unusual Items
- Collateral: The credit agreement grants a first-priority security interest in substantially all assets of the Borrowers and Guarantors, plus 100% of Ambac's equity interest in Cirrata Group.
- Restrictions: The agreement limits additional indebtedness, liens, dividends, restricted payments, asset sales, and acquisitions.
- Events of Default: Include nonpayment, material inaccuracy of representations, ERISA/pension events, change of control, and insolvency.
- Future Filings: Financial statements of the acquired business and pro forma financial information will be filed within 71 days of this report.
Investor Verification Checklist
- Verify the exact amount of "cash on hand" used to fund the remaining $130 million of the purchase price.
- Confirm the current Consolidated Total Net Leverage Ratio and Fixed Charge Coverage Ratio to ensure compliance with the new 4.00x and 1.20x covenants.
- Review the upcoming 71-day filing for pro forma financial information to assess the impact of the acquisition on Ambac's balance sheet.
- Monitor the $10 million unrestricted cash requirement for Ambac Financial Group, Inc. as a condition of the guarantee.