Press Release

Ambac Guarantees Another New U.K. Hospital PFI Transaction

NEW YORK, December 6, 2007-- Ambac Financial Group, Inc. (NYSE: ABK) (Ambac) said today that Ambac Assurance UK Limited recently provided a triple-A credit enhancement for a major U.K. hospital financing completed as part of the British Government's ongoing Private Finance Initiative (PFI) investment in the provision of health care services. Mid Essex Hospital Services NHS Trust (“the Trust”) procured the scheme for a new 5-storey hospital and a multi-storey car park. The hospital is situated approximately 40 miles to the north east of London. The winning consortium was a joint venture between Bouygues (UK) Limited, Ecovert FM Limited (both members of Bouygues Construction group of companies) and HSBC Infrastructure Fund Management Limited (1) , acting in its capacity as general partner for and on behalf of each of the limited partnerships constituting HSBC Infrastructure Fund II (collectively “BY Chelmer Plc”). These entities are highly experienced with projects of this nature having jointly delivered several such initiatives. BY Chelmer will design, build and finance the new hospital facilities. They will also provide non-clinical and maintenance services post construction. Their contract with the Trust will run for 35 years.

The bonds issued by BY Chelmer in December 2007 total £192.65 million (including £30m of variation bonds) and are 35 year amortizing index-linked bonds. The bonds were issued at a coupon of 2.22%.

"Ambac is delighted to continue its role as the leading UK PFI Financial Guarantor,” said Ian Dixon, Managing Director of Ambac's European Infrastructure team. "While the current funding market remains challenging, we were pleased that Ambac's involvement for this new hospital in Essex proved "value for money" for the Trust and BY Chelmer."

(1) HSBC Infrastructure Fund Management Limited (HIFML) is authorised and regulated by the Financial Services Authority.

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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 leading guarantor of public finance and structured finance obligations, has earned triple-A ratings, the highest ratings available from Moody's Investors Service, Inc., Standard & Poor's Ratings Services and Fitch, Inc. Ambac Financial Group, Inc. common stock is listed on the New York Stock Exchange (ticker symbol ABK).