ABK Ambac Financial Grp. Common Stock

On December 13, 2007, Ambac Financial Group, Inc. (“Ambac”) issued a press release announcing that its financial guarantee insurance subsidiary, Ambac Assurance Corporation (“Ambac Assurance”), has entered into a commitment to reinsure to Assured Guaranty Re Ltd. (“AG Re”), the reinsurance subsidiary of Assured Guaranty Ltd. (“AGO”), a diversified portfolio of financial guaranty contracts. The portfolio totals approximately $29 billion of net par outstanding and will be ceded under an existing master facultative reinsurance agreement with AG Re. Pursuant to the commitment, AG Re has agreed to provide reinsurance under the terms of Ambac’s current surplus share treaty program that expires March 31, 2008. Ambac has also agreed to offer AG Re the opportunity to provide reinsurance under the terms of Ambac’s surplus share treaty programs that commence April 1, 2008, 2009 and 2010. A copy of the press release, filed as Exhibit 99.01 to this Current Report on Form 8-K and is incorporated by reference herein.

Certain statements in this document and the exhibit are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Ambac’s filings with the Securities and Exchange Commission.