Major ResCap Creditor MBIA (MBI) Trades Higher on Ally Settlement
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MBIA, Inc. (NYSE: MBI) shares are higher on the session amid news earlier from Ally Financial and Residential Capital (ResCap).
According to a press release, the two "completed the next step in implementing the comprehensive settlement agreement and Chapter 11 plan. ResCap filed a motion seeking court approval of the plan support agreement in the bankruptcy proceedings, which includes announcement of the terms of the Chapter 11 plan in connection with the comprehensive plan support agreement.
"As part of the plan, Ally will contribute $1.95 billion in cash to the ResCap estate on the effective date of the plan, as well as the first $150 million from insurance proceeds it expects to receive related to releases in connection with the plan. The agreement also requires that Ally receive full repayment of its secured claims, including $1.13 billion that is owed under existing credit facilities. The agreement and the plan are subject to bankruptcy court approval and certain other conditions."
MBIA is a major creditor of ResCap and supports the settlement. MBIA has about $3.6 billion in unsecured claims versus various ResCap entities. Initial wording in the settlement has MBIA able to recover about $796 million, though that number might see a material change as final documents are inked.
Shares of MBI are up over 2 percent Thursday.
According to a press release, the two "completed the next step in implementing the comprehensive settlement agreement and Chapter 11 plan. ResCap filed a motion seeking court approval of the plan support agreement in the bankruptcy proceedings, which includes announcement of the terms of the Chapter 11 plan in connection with the comprehensive plan support agreement.
"As part of the plan, Ally will contribute $1.95 billion in cash to the ResCap estate on the effective date of the plan, as well as the first $150 million from insurance proceeds it expects to receive related to releases in connection with the plan. The agreement also requires that Ally receive full repayment of its secured claims, including $1.13 billion that is owed under existing credit facilities. The agreement and the plan are subject to bankruptcy court approval and certain other conditions."
MBIA is a major creditor of ResCap and supports the settlement. MBIA has about $3.6 billion in unsecured claims versus various ResCap entities. Initial wording in the settlement has MBIA able to recover about $796 million, though that number might see a material change as final documents are inked.
Shares of MBI are up over 2 percent Thursday.
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