AMBAC FINANCIAL GROUP INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

Item 1.01. Entry in a Material Definitive Agreement.

On December 29, 2022, Ambac Assurance Corporation ("AAC") entered into a
Settlement Agreement and Release (the "Settlement Agreement") with Nomura Credit
& Capital, Inc. ("Nomura") to settle its litigation against Nomura (Supreme
Court of the State of New York, County of New York, Case No. 651359/2013, filed
on April 15, 2013) concerning certain residential mortgage-backed securities
("RMBS") trusts (the "Trusts"). Pursuant to the Settlement Agreement, Nomura
will make a cash payment to AAC of $140 million (one hundred forty million
dollars) within ten (10) business days, and AAC and Nomura agreed to release
each other and their respective affiliates and related persons from any claims
relating to the Trusts, the financial guaranty policies issued by AAC in
connection with Trusts (other than AAC's obligations to pay insurance claims
under such policies), the securities related to the Trusts, and the mortgage
loans related to the Trusts.

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement

On February 12, 2018, AAC issued $240 million aggregate principal amount of 8.5%
Senior PIK Notes due 2055 (the "Tier 2 Notes") under an Indenture, dated as of
February 12, 2018, by and between AAC and The Bank of New York Mellon, as
trustee and as note collateral agent. The Tier 2 Notes are secured by proceeds
from RMBS litigations net of reinsurance ("Net Proceeds") in excess of $1.6
billion and are subject to mandatory redemption from Net Proceeds in excess of
$1.6 billion within five business days after the receipt of such Net Proceeds.
Effective October 29, 2022 AAC applied Net Proceeds of approximately $213
million (two hundred thirteen million dollars) from the Settlement Agreement and
Release with Bank of America Corporation and certain affiliates thereof to
redeem Tier 2 Notes plus accrued and unpaid interest as of the date of
redemption. AAC plans to apply the Net Proceeds of $140 million (one hundred
forty million dollars) from the Settlement Agreement with Nomura plus
approximately $5 million (five million dollars) from other sources to fully
redeem the remaining Tier 2 Notes plus accrued and unpaid interest in the amount
of approximately $145 million (one hundred forty five million dollars) as of the
date of redemption.

Forward-Looking Statements

In this report, statements that may constitute "forward-looking statements"
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as "estimate," "project," "plan,"
"believe," "anticipate," "intend," "planned," "potential" and similar
expressions, or future or conditional verbs such as "will," "should," "would,"
"could," and "may," or the negative of those expressions or verbs, identify
forward-looking statements. We caution readers that these statements are not
guarantees of future performance. Forward-looking statements are not historical
facts but instead represent only our beliefs regarding future events, which may
by their nature be inherently uncertain and some of which may be outside our
control. These statements may relate to plans and objectives with respect to the
future, among other things which may change. We are alerting you to the
possibility that our actual results may differ, possibly materially, from the
expected objectives or anticipated results that may be suggested, expressed or
implied by these forward-looking statements. Important factors that could cause
our results to differ, possibly materially, from those indicated in the
forward-looking statements include, among others, those discussed under "Risk
Factors" in our most recent SEC filed quarterly or annual report.

Any or all of management's forward-looking statements here or in other
publications may turn out to be incorrect and are based on management's current
belief or opinions. Ambac Financial Group's ("AFG") and its subsidiaries'
(collectively, "Ambac" or the "Company") 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) the highly speculative nature of AFG's common stock
and volatility in the price of AFG's common stock; (2) uncertainty concerning
the

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Company's ability to achieve value for holders of its securities, whether from
Ambac Assurance Corporation ("AAC") and its subsidiaries or from the specialty
property and casualty program insurance business, the insurance distribution
business, or related businesses; (3) inadequacy of reserves established for
losses and loss expenses and possibility that changes in loss reserves may
result in further volatility of earnings or financial results; (4) potential for
rehabilitation proceedings or other regulatory intervention against AAC; (5)
credit risk throughout Ambac's business, including but not limited to credit
risk related to insured residential mortgage-backed securities, student loan and
other asset securitizations, public finance obligations (including risks
associated with Chapter 9 and other restructuring proceedings), issuers of
securities in our investment portfolios, and exposures to reinsurers; (6) our
inability to effectively reduce insured financial guarantee exposures or achieve
recoveries or investment objectives; (7) our inability to generate the
significant amount of cash needed to service our debt and financial obligations,
and our inability to refinance our indebtedness; (8) Ambac's substantial
indebtedness could adversely affect its financial condition and operating
flexibility; (9) Ambac may not be able to obtain financing or raise capital on
acceptable terms or at all due to its substantial indebtedness and financial
condition; (10) the impact of catastrophic public health, environmental or
natural events, including events like the COVID-19 pandemic, or global or
regional conflicts, on significant portions of our insured portfolio; (11)
failure to recover claims paid on Puerto Rico exposures or realization of losses
in amounts higher than expected; (12) credit risks related to large single
risks, risk concentrations and correlated risks; (13) risks associated with
adverse selection as Ambac's financial guarantee insurance portfolio runs off;
(14) the risk that Ambac's risk management policies and practices do not
anticipate certain risks and/or the magnitude of potential for loss; (15)
restrictive covenants in agreements and instruments that impair Ambac's ability
to pursue or achieve its business strategies; (16) adverse effects on operating
results or the Company's financial position resulting from measures taken to
reduce financial guarantee risks in its insured portfolio; (17) disagreements or
disputes with Ambac's insurance regulators; (18) loss of control rights in
transactions for which we provide financial guarantee insurance; (19) adverse
tax consequences or other costs resulting from the characterization of the AAC's
surplus notes or other obligations as equity; (20) risks attendant to the change
in composition of securities in the Ambac's investment portfolio; (21) adverse
impacts from changes in prevailing interest rates; (22) events or circumstances
that result in the impairment of our intangible assets and/or goodwill that was
recorded in connection with Ambac's acquisition of 80% of the membership
interests of Xchange Benefits, LLC; (23) risks associated with the expected
discontinuance of the London Inter-Bank Offered Rate; (24) factors that may
negatively influence the amount of installment premiums paid to Ambac; (25)
risks relating to determinations of amounts of impairments taken on investments;
(26) the risk of litigation and regulatory inquiries or investigations, and the
risk of adverse outcomes in connection therewith; (27) actions of stakeholders
whose interests are not aligned with broader interests of Ambac's stockholders;
(28) system security risks, data protection breaches and cyber attacks; (29)
regulatory oversight of Ambac Assurance UK Limited ("Ambac UK") and applicable
regulatory restrictions may adversely affect our ability to realize value from
Ambac UK or the amount of value we ultimately realize; (30) failures in services
or products provided by third parties; (31) our inability to attract and retain
qualified executives, senior managers and other employees, or the loss of such
personnel; (32) fluctuations in foreign currency exchange rates; (33) failure to
realize our business expansion plans or failure of such plans to create value;
(34) greater competition for our specialty property & casualty program insurance
business; (35) loss or lowering of the AM Best rating for our property and
casualty insurance company subsidiaries; (36) disintermediation within the
insurance industry or greater competition that negatively impacts our managing
general agency/underwriting business; (37) changes in law or in the functioning
of the healthcare market that impair the business model of our accident and
health managing general underwriter; and (38) other risks and uncertainties that
have not been identified at this time.

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