ABK Ambac Financial Grp. Common Stock

Filed pursuant to Rule 433

Registration No. 333-131888

Dated May 7, 2008

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The exact stock price and effective date applicable to a cash merger may not be set forth on the table, in which case:

• if the stock price is between two stock price amounts on the table or the effective date is between two dates on the table, the amount of make-whole shares will be determined by straight line interpolation between the make-whole share amounts set forth for the higher and lower stock price amounts and the two dates, as applicable, based on a 360-day year;

• if the stock price is in excess of $35.00 per share (subject to adjustment as described above), then the make-whole share amount will be zero; and

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• if the stock price is less than $2.50 per share (subject to adjustment as described above), which we refer to as the minimum stock price, then the make-whole share amount will be determined as if the stock price equaled the minimum stock price, using straight line interpolation, as described above, if the effective date is between two dates on the table.

III. Arrangement with Respect to the Common Stock

A. Underwriting Arrangements

In connection with our public offering of Common Stock, the underwriters for that offering have agreed to purchase an aggregate of 60 million shares of Common Stock (the amount committed by an underwriter pursuant to this sentence being such underwriter’s “Commitment Amount”) which constitute unsold allotments of shares of Common Stock in the public offering, at a purchase price per share of $6.75, less underwriting discounts and commissions per share of $0.3459.

The underwriters have agreed to purchase unsold allotments and, in connection therewith, have agreed that they will not sell or transfer the Common Stock purchased as unsold allotments. Specifically, each underwriter has agreed that it will not, directly or indirectly, without the prior written consent of the Company, offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition, whether by actual disposition or effective economic disposition due to cash settlement or otherwise, by the undersigned, any affiliate of the undersigned or any person in privity with the undersigned) or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to such underwriter’s unsold allotment of stock (the “Subject Stock”); provided that, for the avoidance of doubt, such lock-up shall not restrict ordinary market making activities, open market purchases and sales of Common Stock held on or acquired in the open market after the date of this free writing prospectus (other than the Subject Stock) and, provided, further, that this provision shall not restrict the transfer of Subject Stock to an affiliate as long as the affiliate transferee agrees for the benefit of the Company to be bound by the terms hereof.

The lock up agreement terminates, with respect to each underwriter, (i) 60 days after the consummation of the offerings for a number of shares of Common Stock equal to one third of such underwriter’s Commitment Amount, (ii) 90 days after the consummation of the offerings for an additional one-third of such underwriter’s Commitment Amount and (iii) 120 days after consummation of the offerings for the remaining shares of Common Stock, if any; provided that (a) in no event will the lock-up be any more restrictive than any other lock-up or similar agreement agreed to by the Company, any other underwriter in connection with the offerings, or any party in any subsequent capital raising transaction and, if any such party is provided with a less restrictive lock up or similar agreement the lock-up will be modified to conform to such agreement and (b) the Company will not release any party from any such lock-up or similar agreement unless each other party is so released and will otherwise seek to enforce the obligations of the parties to such lock-ups and similar agreements.

In connection with any resale by an underwriter of unsold allotments, we have agreed to update the registration statement and the final prospectuses for the offerings of the Common Stock and the Equity Units at any time if such registration statements and the final prospectuses contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such updates will be at our expense.

We have further agreed in connection with sales of unsold allotments to allow the underwriters to perform updated due diligence customary for public offerings of common stock.

B. Private Purchase

Certain entities (the “Private Purchasers”) have entered into a Private Placement Letter (the “Letter Agreement”) dated March 6, 2008, with us, pursuant to which they will purchase, on a private placement basis, up to an aggregate of 14,074,074 shares of Common Stock at a price of $6.75 per share subsequent to, but on the same date, as the closing of this offering.

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The obligations of the Private Purchasers are subject to certain conditions.

The Private Purchasers have also entered into lock-up agreements pursuant to which they have agreed to restrictions on their ability to sell or transfer the shares of Common Stock they purchased in the Private Placement that are substantially the same as the restrictions agreed upon by the underwriters in their lock-ups described above. In addition, the Private Purchasers will be released from their obligations under the lock-ups in the event the Company obtains a release from the underwriters of its obligations under the 120-day lock-up agreement the Company entered into for the benefit of the underwriters in connection with the offering.

We have agreed to provide the Private Purchasers with first priority demand and piggyback registration rights with respect to the Common Stock purchased, with the intended effect of such rights being to provide the Private Purchasers with the ability to make registered sales of such Common Stock (when they are no longer restricted from doing so pursuant to the lock-up agreements) that is equivalent in all material respects to the opportunity available to the underwriters in respect of the unsold allotments purchased by the underwriters.

The Private Purchasers will be paid an 8% fee payable upon consummation of the offering. This fee is based upon the aggregate commitments of the Private Purchasers. In addition, we have agreed to, upon consummation of the offering, reimburse the Private Purchasers promptly upon request for the fees and expenses of their legal and financial advisers and outside counsel, subject to a cap of between $7.5 million and $10 million to be negotiated.

The Private Purchasers and we have agreed to provide one another with certain indemnification rights.

We have filed a registration statement (including a prospectus and two prospectus supplements) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and prospectus supplements in that registration statement and other documents we have filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov . Alternatively, each of the prospectuses will be sent to you if you request them by calling Credit Suisse Securities (USA) LLC toll free at 1-800-221-1037 or UBS Investment Bank toll free at 1-888-827-7275.

March 7, 2008

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