Ambac Assurance Corporation Makes Announcement.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 8, 2000

The board of directors of Dallas/Fort Worth Medical Center (Grand Prairie, Texas), a hospital with municipal bonds insured by Ambac Assurance Corporation, announced yesterday that the hospital would cease admitting patients and would close.

Ambac currently has $20.3 million in net par exposure related to the Dallas/Fort Worth Medical Center's Series 1994 Hospital Revenue Refunding Bonds issued through the Grand Prairie Health Facilities Development Corporation, Texas. In 1994, in recognition of the hospital's fiscal stress, Ambac first established a loss reserve for this credit. Ambac has ample reserves to offset any losses incurred from the hospital's closing and there will be no impact on Ambac's earnings.

As of September 30, 2000, Ambac's total insured portfolio was $263.5 billion. Since becoming a public company in 1991, Ambac has had net paid losses of $4.9 million, representing 0.2% of net premiums written during the same period. Since 1971 Ambac has paid approximately $2.9 million in net claims on health care credits. Ambac's current health care portfolio is $17.9 billion.

Ambac Assurance Corporation is the principal operating subsidiary of Ambac Financial Group, Inc. Ambac Assurance is a leading guarantor of municipal and structured finance obligations in the U.S. and abroad, and is the successor of the oldest municipal bond insurance company, which wrote the first municipal insurance policy in 1971. Ambac Assurance has earned triple-A ratings, the highest ratings available from Moody's Investors Service, Inc., Standard & Poor's Ratings Group, Fitch, and Rating and Investment Information, Inc. Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK).