Ambac UK Backs First European Securitization of Private Hospital Revenues.

Business Editors

NEW YORK--(BUSINESS WIRE)--Aug. 8, 2001

Ambac Financial Group, Inc. announced that its subsidiary, Ambac Assurance UK Limited ("Ambac UK"), has participated in one of the largest European securitizations by a leveraged buy-out company, as well as the largest asset-backed deal within the European health care sector.

In a transaction that pushes securitization techniques into a more complex asset class, General Healthcare Group (GHG), the UK's leading operator of private hospitals, launched a (pound)975m whole business securitization, more than half of which was Ambac UK guaranteed.

Whole business securitization, a financing tool that uses asset-backed bonds predicated upon the cashflows from the whole enterprise, is becoming an increasingly popular method of raising long-term capital throughout Europe, particularly in the UK.

"While whole company securitizations have been taking place for a few years now, the General Healthcare Group deal is one of the first to be done in a growing industry with an expanding business," notes David Wallis, Managing Director of Ambac UK. "Financing technology has advanced such that I think we will see a continuing expansion in the range of assets and companies that can be securitized."

The deal, which will refinance a bridge loan extended by Morgan Stanley last September, was offered in six tranches of bonds, all in Sterling and rated by Fitch, Inc. and Standard & Poor's Ratings Services. The two triple-A rated Ambac UK wrapped tranches comprise a (pound)350m floating rate note with an expected maturity of July 2009, and a (pound)150m fixed rate note expected to mature in July 2018. The bonds are backed by revenues from patient fees and a (pound)1.1 billion property portfolio that includes General Healthcare's 44 hospitals throughout the UK.

"Completing one of Europe's biggest and most complicated securitizations demonstrates Ambac's ability to understand and execute in an important and expanding area," says Wallis.

Ambac Financial Group, Inc., (NYSE: ABK) 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 Assurance Corporation is the principal operating subsidiary of Ambac Financial Group, Inc. Ambac Assurance, a leading guarantor of municipal 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.

The contents of this statement have been approved for the purposes of Section 57 of the Financial Services Act by Ambac Assurance UK Limited.