8-KOther Events

JPMORGAN CHASE & CO 8-K Report, Corporate Update (Jan 26, 2016)

Filed January 26, 2016For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. (JPM) announced on January 25, 2016, a significant settlement agreement with bond insurer Ambac Assurance Corporation and its Segregated Account. This agreement resolves two major disputes related to approximately $3.3 billion in principal and interest payments on residential mortgage-backed securities (RMBS) trusts sponsored by EMC Mortgage LLC, an indirect subsidiary of JPMorgan Chase. Under the terms of the settlement, JPMorgan Chase will pay $995 million to Ambac. Importantly, this settlement also includes the withdrawal of Ambac's objection to a previously announced $4.5 billion settlement with trustees of 319 RMBS trusts issued by J.P. Morgan, Chase, and Bear Stearns. The company has stated that this $995 million settlement is not expected to have a material impact on its earnings for the first quarter of 2016.

Key Highlights

  • 1JPMorgan Chase reached a settlement with Ambac Assurance Corporation and its Segregated Account on January 25, 2016.
  • 2The settlement resolves disputes concerning approximately $3.3 billion in RMBS trusts sponsored by EMC Mortgage LLC.
  • 3JPMorgan Chase will pay $995 million to Ambac as part of the settlement.
  • 4Ambac will withdraw its objection to a separate $4.5 billion settlement with RMBS trust trustees.
  • 5The $4.5 billion settlement involves 319 RMBS trusts issued by J.P. Morgan, Chase, and Bear Stearns.
  • 6JPMorgan Chase expects no material effect on its first-quarter 2016 earnings from this settlement.

Frequently Asked Questions

The settlement resolved outstanding disputes related to Ambac's claims for recovery of principal and interest payments on approximately $3.3 billion of certain insured classes of eleven residential mortgage-backed securities (RMBS) trusts sponsored by EMC Mortgage LLC, an indirect subsidiary of JPMorgan Chase.

JPMorgan Chase will pay $995 million to Ambac as part of this settlement.

This settlement includes a provision where Ambac will withdraw its objection to JPMorgan Chase's previously announced $4.5 billion settlement with trustees of 319 RMBS trusts issued by J.P. Morgan, Chase, and Bear Stearns. This withdrawal is crucial for the progression of that larger settlement.

JPMorgan Chase stated that this $995 million settlement is not expected to have a material effect on the company's earnings for the first quarter of 2016.