Ambac Postpones Its Efforts to Launch Everspan

Ambac Financial Group, Inc. (NYSE: ABK) (�Ambac� or the �Company�) today announced that it has postponed its efforts to launch Everspan Financial Guarantee Corp. (Everspan). It will, however, continue to focus on its ongoing loss mitigation efforts and other new business initiatives.

Ambac had been seeking to launch Everspan in order to write financial guarantee insurance in the public finance market as a separate, stand-alone legal entity. To launch the business, it was essential that it receive sufficient financial strength ratings to enable Everspan to successfully compete in the targeted market. Everspan was seeking to raise third party capital in addition to any amounts contributed by Ambac Assurance Corporation in order to achieve such ratings. Although Ambac engaged in discussions with third parties to raise capital for Everspan, none of these discussions have resulted in a satisfactory outcome.

In light of this decision, Douglas Renfield-Miller, Chief Executive Officer of Everspan and Executive Vice President of Ambac and Ambac Assurance Corporation, announced that he will retire effective January 1, 2010. Between now and December 31, 2009, Mr. Renfield-Miller will provide support and consultation to the Company.

David Wallis, Ambac�s President and Chief Executive Officer, commented, �Postponing this strategic initiative was a difficult decision. We will closely monitor the capital markets and will revisit this opportunity when the economic environment has stabilized.� Mr. Wallis continued, �Doug has been a significant contributor to Ambac since joining us in 2000 and I wish him well in his retirement.�

About Ambac

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 guarantor of public finance and structured finance obligations, has a Ba3 rating (developing outlook) from Moody's Investors Service, Inc. and a A rating (negative outlook) from Standard & Poor's Ratings Services. Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK).

Forward-Looking Statements

This release contains statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any or all of management�s forward-looking statements here or in other publications may turn out to be wrong and are based on Ambac�s management current belief or opinions. Ambac�s actual results may vary materially, and there are no guarantees about the performance of Ambac�s securities. Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1)�difficult economic conditions, which may not improve in the near future, and adverse changes in the economic, credit, foreign currency or interest rate environment in the United States and abroad; (2)�the actions of the U. S. Government, Federal Reserve and other government and regulatory bodies to stabilize the financial markets; (3)�the risk that market risks impact assets in our investment portfolio or the value of our assets posted as collateral in respect of investment agreements and interest rate swap and currency swap transactions; (4)�changes in Ambac�s and/or Ambac Assurance�s credit or financial strength ratings; (5)�risks relating to the re-launch of Connie Lee as Everspan Financial Guarantee Corp.; (6)�competitive conditions, pricing levels and reduction in demand for financial guarantee products; (7)�credit and liquidity risks due to unscheduled and unanticipated withdrawals on investment agreements; (8)�inadequacy of reserves established for losses and loss expenses; (9)�changes in capital requirements whether resulting from downgrades in our insured portfolio or changes in rating agencies� rating criteria or other reasons; (10)�the risk that we may be required to raise additional capital, which could have a dilutive effect on our outstanding equity capital and/or future earnings; (11)�our ability or inability to raise additional capital, including the risks that regulatory or other approvals for any plan to raise capital are not obtained, or that various conditions to such a plan, either imposed by third parties or imposed by Ambac or its Board of Directors, are not satisfied and thus potentially necessary capital raising transactions do not occur, or the risk that for other reasons the Company cannot accomplish any potentially necessary capital raising transactions; (12)�credit risk throughout our business, including credit risk related to residential mortgage-backed securities and collateralized debt obligations (�CDOs�) and large single exposures to reinsurers; (13)�market spreads and pricing on insured CDOs and other derivative products insured or issued by Ambac; (14)�the risk that holders of debt securities or counterparties on credit default swaps or other similar agreements seek to declare events of default or seek judicial relief or bring claims alleging violation or breach of covenants by Ambac or one of its subsidiaries; (15)�default by one or more of Ambac Assurance�s�portfolio investments, insured issuers, counterparties or reinsurers; (16)�Ambac�s financial position and lack of financial flexibility, resulting principally from the uncertainty of Ambac Assurance�s ability to pay dividends to Ambac without the consent of the office of the Commissioner of Insurance of the State of Wisconsin; (17)�legislative and regulatory developments, including the Troubled Asset Relief Program and other programs under the Emergency Economic Stabilization Act and other similar programs; (18)�changes in accounting principles or practices relating to the financial guarantee industry or that may impact Ambac�s reported financial results; (19)�changes in expectations regarding future realization of gross deferred tax assets; (20)�the risk of volatility in income and earnings, including volatility due to the application of fair value accounting, required under SFAS 133, to the portion of our credit enhancement business which is executed in credit derivative form; (21)�the risk that our underwriting and risk management policies and practices do not anticipate certain risks and/or the magnitude of potential for loss as a result of unforeseen risks; (22)�operational risks, including with respect to internal processes, risk models, systems and employees; (23)�factors that may influence the amount of installment premiums paid to Ambac; (24)�the risk of litigation and regulatory inquiries or investigations, and the risk of adverse outcomes in connection therewith, which could have a material adverse effect on our business, operations, financial position, profitability or cash flows; (25)�changes in tax laws; (26)�other factors described in the Risk Factors section in Part I, Item�1A of our Annual Report on Form 10-K for the fiscal year ended December�31, 2008 and also disclosed from time to time by Ambac in its subsequent reports on Form 10-Q and Form 8-K, which are or will be available on the Ambac website at www.ambac.com and at the SEC�s website, www.sec.gov; and (27)�other risks and uncertainties that have not been identified at this time. Readers are cautioned that forward-looking statements speak only as of the date they are made and that Ambac does not undertake to update forward-looking statements to reflect circumstances or events that arise after the date the statements are made. You are therefore advised to consult any further disclosures we make on related subjects in Ambac�s reports to the SEC.

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