August 7, 2022

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Business is my step

Ambac Closes Economical Deleveraging Transaction By way of Exchange of Remarkable Corolla Have confidence in Obligations for Surplus Notes

7 min read

Ambac Financial Group, Inc. (NYSE:AMBC) (“Ambac”), a fiscal providers keeping enterprise, these days announced that its subsidiary, Ambac Assurance Company (“AAC”), effectively finished an trade whereby it obtained 100% of the exceptional obligations of Corolla Rely on in return for AAC issued 5.1% Senior Surplus Notes (“SSNs”). Corolla Have confidence in was set up in 2014 and is the sole operator of an AAC Junior Surplus Notice (“JSN”) with a face sum of $350 million and accrued and unpaid curiosity of $164 million as a result of January 22, 2021. Ambac held the residual desire in Corolla Belief, which was also exchanged in return for AAC issued 5.1% SSNs. Next the exchange, AAC expects to collapse Corolla Trust. As a end result of this deleveraging transaction, AAC will reduce its nominal financial debt and accrued curiosity superb by roughly $73 million.

Claude LeBlanc, President and Chief Govt Officer of Ambac, commented: “The prosperous completion of the trade of the Corolla Believe in obligations for Senior Surplus Notes represents a further substantial move in our constant pursuit to deleverage and simplify AAC’s money composition, dependable with our strategic priorities.”

For additional particulars concerning this trade, refer to the corresponding Type 8-K submitted with the Securities and Trade Fee.

Debevoise & Plimpton LLP acted as legal advisor and Moelis & Organization LLC acted as money adviser to Ambac on the transaction.

About Ambac

Ambac Money Team, Inc. (“Ambac” or “AFG”), headquartered in New York Town, is a monetary companies keeping company whose subsidiaries, Ambac Assurance Corporation and Ambac Assurance United kingdom Minimal, are money ensure insurance policies firms presently in runoff. Ambac is also in the method of obtaining and/or creating new organizations, by other subsidiaries, which includes its wholly owned subsidiary Everspan Coverage Business, Everspan Indemnity Insurance plan Corporation, Xchange Added benefits, LLC and Xchange Affinity Underwriting Agency, LLC. Ambac’s typical inventory trades on the New York Stock Trade below the symbol “AMBC”. The Amended and Restated Certificate of Incorporation of Ambac has considerable restrictions on the skill to transfer Ambac’s prevalent stock. Subject to minimal exceptions, any attempted transfer of frequent inventory shall be prohibited and void to the extent that, as a consequence of these kinds of transfer (or any collection of transfers of which this kind of transfer is a element), any individual or team of persons shall come to be a holder of 5% or additional of Ambac’s widespread inventory or a holder of 5% or more of Ambac’s frequent stock raises its ownership desire. Ambac is fully commited to delivering timely and accurate info to the investing community, steady with our lawful and regulatory obligations. To that finish, we use our web page to convey info about our businesses, like the predicted release of quarterly economical success, quarterly financial, statistical and organization-relevant info. For extra information and facts, make sure you go to www.ambac.com.

Ahead-On the lookout Statements:

In this push release, statements that may possibly represent “forward-wanting statements” in the which means of the secure harbor provisions of the Non-public Securities Litigation Reform Act of 1995. Words and phrases these kinds of as “estimate,” “expect,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and very similar expressions, or long term or conditional verbs these kinds of as “will,” “should,” “would,” “could,” and “may,” or the unfavorable of individuals expressions or verbs, establish forward-wanting statements. We warning viewers that these statements are not assures of future effectiveness. Forward-seeking statements are not historical facts but instead symbolize only our beliefs regarding long term gatherings, which may possibly by their mother nature be inherently unsure and some of which could be exterior our control. These statements could relate to strategies and targets with regard to the potential, among the other points which could change. We are alerting you to the possibility that our precise effects may perhaps vary, perhaps materially, from the predicted targets or predicted final results that could be instructed, expressed or implied by these forward-hunting statements. Essential things that could induce our benefits to differ, maybe materially, from these indicated in the ahead-on the lookout statements involve, amongst other people, those talked over beneath “Risk Factors” in our most current SEC filed quarterly or once-a-year report.

Any or all of management’s forward-seeking statements here or in other publications may well change out to be incorrect and are dependent on management’s existing perception or thoughts. Ambac’s true effects could change materially, and there are no assures about the performance of Ambac’s securities. Amongst functions, threats, uncertainties or aspects that could bring about true effects to differ materially are: (1) the really speculative nature of AFG’s popular inventory and volatility in the rate of AFG’s typical stock (2) uncertainty concerning the Company’s means to accomplish value for holders of its securities, regardless of whether from Ambac Assurance Company (“Ambac Assurance”) and its subsidiaries or from transactions or prospects aside from Ambac Assurance and its subsidiaries, such as new company initiatives (3) adjustments in Ambac’s estimated representation and warranty recoveries or decline reserves about time (4) failure to get better claims compensated on Puerto Rico exposures or incurrence of losses in amounts better than envisioned (5) adverse consequences on AFG’s share value ensuing from future offerings of debt or equity securities that rank senior to AFG’s common stock (6) opportunity of rehabilitation proceedings versus Ambac Assurance (7) dilution of present-day shareholder price or adverse effects on AFG’s share rate ensuing from the issuance of more shares of prevalent stock (8) inadequacy of reserves recognized for losses and loss charges and chance that modifications in decline reserves might result in even more volatility of earnings or financial results (9) increased fiscal stress knowledgeable by issuers of general public finance obligations or an increased incidence of Chapter 9 filings or other restructuring proceedings by public finance issuers, including an elevated danger of loss on income bonds of distressed community finance issuers owing to judicial decisions adverse to revenue bond holders (10) Ambac’s incapability to recognize the predicted recoveries bundled in its monetary statements (11) insufficiency or unavailability of collateral to shell out secured obligations (12) credit history threat during Ambac’s business, including but not constrained to credit possibility connected to household house loan-backed securities, scholar personal loan and other asset securitizations, public finance obligations (which include obligations of the Commonwealth of Puerto Rico and its instrumentalities and organizations) and exposures to reinsurers (13) credit rating threats relevant to huge solitary risks, possibility concentrations and correlated pitfalls (14) the threat that Ambac’s hazard management insurance policies and procedures do not foresee specified threats and/or the magnitude of probable for decline (15) hazards connected with adverse range as Ambac’s insured portfolio operates off (16) adverse consequences on running results or the Company’s monetary situation resulting from measures taken to cut down hazards in its insured portfolio (17) disagreements or disputes with Ambac’s coverage regulators (18) our lack of ability to mitigate or remediate losses, commute or lessen insured exposures or accomplish recoveries or expense goals, or the failure of any transaction meant to complete a single or much more of these targets to deliver anticipated effects (19) Ambac’s considerable indebtedness could adversely have an affect on its monetary problem and running flexibility (20) Ambac may not be in a position to attain financing or increase money on acceptable phrases or at all thanks to its substantial indebtedness and economic ailment (21) Ambac may well not be able to produce the important quantity of money necessary to assistance its debt and economic obligations, and may possibly not be in a position to refinance its indebtedness (22) restrictive covenants in agreements and instruments might impair Ambac’s ability to go after or reach its business enterprise approaches (23) loss of regulate legal rights in transactions for which we give insurance policies due to a acquiring that Ambac has defaulted (24) the affect of catastrophic environmental or pure occasions, such as catastrophic general public overall health situations like the COVID-19 pandemic, on important parts of our insured and financial commitment portfolios (25) adverse tax penalties or other costs resulting from the characterization of Ambac Assurance’s surplus notes or other obligations as fairness (26) threats attendant to the transform in composition of securities in Ambac’s financial commitment portfolio (27) variations in prevailing desire premiums (28) the anticipated discontinuance of the London Inter-Bank Made available Amount (29) things that may well influence the amount of installment premiums compensated to Ambac (30) default by just one or much more of Ambac’s portfolio investments, insured issuers or counterparties (31) sector pitfalls impacting belongings in Ambac’s financial commitment portfolio or the worth of our assets posted as collateral in regard of desire price swap transactions (32) pitfalls relating to determinations of amounts of impairments taken on investments (33) the danger of litigation and regulatory inquiries or investigations, and the hazard of adverse results in relationship therewith, which could have a content adverse effect on Ambac’s company, functions, fiscal place, profitability or hard cash flows (34) actions of stakeholders whose pursuits are not aligned with broader interests of Ambac’s stockholders (35) system security risks, details security breaches and cyber assaults (36) improvements in accounting ideas or practices that might impression Ambac’s noted economical results (37) the economic and regulatory effect of “Brexit” (38) operational pitfalls, which includes with regard to inside procedures, risk and financial commitment versions, techniques and workforce, and failures in companies or solutions supplied by third get-togethers (39) Ambac’s financial position that may possibly prompt departures of crucial personnel and might effect its skill to bring in capable executives and staff (40) fluctuations in overseas currency trade prices could adversely impression the insured portfolio in the celebration of loss reserves or declare payments denominated in a currency other than US pounds and the worth of non-US greenback denominated securities in our financial commitment portfolio (41) decisions made by Ambac Assurance’s main insurance plan regulator for the profit of policyholders that may perhaps outcome in materials adverse outcomes for holders of Ambac’s securities or holders of securities issued or incurred by Ambac Assurance and (42) other dangers and uncertainties that have not been discovered at this time.

Contacts

Lisa A. Kampf

Managing Director, Trader Relations

(212) 208-3177

[email protected]

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