ABK Ambac Financial Grp. Common Stock

On January 17, 2008, Ambac Financial Group, Inc. (“Ambac”) issued a press release announcing that Moody’s Investors Service (“Moody’s”) has placed Ambac Assurance Corporation’s and Ambac Assurance UK Limited’s ‘Aaa’ insurance financial strength rating on review for possible downgrade. Ambac, Ambac Assurance Corporation and Ambac Assurance UK Limited shall be collectively referred to herein as the “Company”. 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.

In addition, Moody’s has placed on possible downgrade Ambac’s Aa2 senior unsecured debt rating and financing trusts and, Aa3 junior subordinated debt rating and (P)A1 provisional rating on preferred stock. As a result of Moody’s review, the Moody’s-rated securities that are “wrapped” or guaranteed by Ambac are also placed under review for possible downgrade, except those with higher public underlying ratings. Moody’s stated that this action follows Ambac’s announcement of record losses, a capital raising plan, and the retirement of its CEO.

Moody’s review of the Company’s ratings will focus on risk in the Company’s insured portfolio and execution of its capital plan, as well as new management’s ability to formulate and execute strategic and operational plans in the rapidly evolving market for financial guaranty insurance.

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.