Ambac Announces the Creation of a Team to Address Issues in the Short Term Municipal Markets.

NEW YORK -- Ambac Financial Group, Inc. (NYSE: ABK) (Ambac) today announced that it has established a team dedicated to addressing the issues its clients are facing in the Auction Rate Securities and Variable Rate Debt markets. Michael Callen, Chairman and CEO of Ambac, commented that, "Many of Ambac's clients are suffering from penalty interest rates that have increased the financing costs of even highly rated borrowers. We have been processing consents for a wide range of issuers and have successfully approved numerous amendments. Having a dedicated team will allow us to further streamline our efforts in response to an upsurge in requests for assistance."

Diana Adams, who is heading the team, said, "Ambac's goal is to offer clients a menu of options and allow them to pick which best addresses their needs, for expedited execution. Additionally, personalized approaches will be crafted where appropriate. While the stress in today's markets transcends any one issuer or guarantor, Ambac's efforts will be aimed at reducing the pain caused by current market conditions to the extent possible." Potential approaches include adding temporary or permanent liquidity enhancements, facilitating repurchases by the issuers of their wrapped securities and helping issuers switch to intermediate term interest rates. Ambac will work with issuers to create innovative solutions which are tailored to their varying risk profiles. A menu of options will be presented to issuers in the coming week.

Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac's principal operating subsidiary, Ambac Assurance Corporation, a guarantor of public finance and structured finance obligations, has earned triple-A ratings from Moody's Investors Service, Inc. and Standard & Poor's Ratings Services; and a double-A rating from Fitch, Inc. Moody's, Standard & Poor's and Fitch all maintain a "negative outlook". Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK).