Ambac Financial Group, Inc. Announces That It Expects No Resulting Claims from Exposure to London Underground.

NEW YORK -- Ambac Financial Group, Inc. (NYSE:ABK) today announced that it has exposure to two transactions related to the upgrade and maintenance of the London Underground. The transactions are not dependent upon "fare box" revenues or levels of ridership. The exposures total gross and net par outstanding as of June 30, 2005, was approximately $1.93 billion and $1.85 billion, respectively. Terrorism risk on these transactions is covered by London Underground Limited ("LUL"). LUL, in turn, is backed by Transport for London, a central U.K. governmental agency that is responsible for the transport system of London. Ambac does not expect to pay claims as a result of this morning's tragic events.

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 leading guarantor of public finance and structured finance obligations, has earned triple-A ratings, the highest ratings available from Moody's Investors Service, Inc., Standard & Poor's Ratings Services, Fitch, Inc. and Rating and Investment Information, Inc. Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK).