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<title>ambc-20210624</title></head><body><div style="display:none"><ix:header><ix:hidden><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" name="dei:EntityCentralIndexKey" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl83L2ZyYWc6NzRmODAzNGY5NWQxNGJmOThmMTUwNjNkZjQwMDZiNWEvdGFibGU6ODM3YzQ2NzNhNTBhNGQzMjg3ZWQ4MDgxODI0ZTQ1ZGUvdGFibGVyYW5nZTo4MzdjNDY3M2E1MGE0ZDMyODdlZDgwODE4MjRlNDVkZV8yLTEtMS0xLTA_5b3269a2-ba14-40f1-80ba-b3e4e58aad82">0000874501</ix:nonNumeric><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt:booleanfalse" name="dei:AmendmentFlag" 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style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:14pt;font-weight:700;line-height:120%">UNITED STATES</span></div><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:14pt;font-weight:700;line-height:120%">SECURITIES AND EXCHANGE COMMISSION </span></div><div style="margin-bottom:9pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Washington, D.C. 20549 </span></div><div style="margin-bottom:9pt;margin-top:5pt;text-align:center"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:19.444%"><tr><td style="width:1.0%"></td><td style="width:59.802%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:2.659%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:34.239%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:18pt;font-weight:700;line-height:100%">FORM</span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:18pt;font-weight:700;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" name="dei:DocumentType" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6NWU5NTVmOWRlNzE0NDZjM2E4YThkYzEyNjAwNjQ0MzUvdGFibGVyYW5nZTo1ZTk1NWY5ZGU3MTQ0NmMzYThhOGRjMTI2MDA2NDQzNV8wLTItMS0xLTA_d620e676-3cce-4102-9b44-0389d6845b88">8-K</ix:nonNumeric></span></td></tr></table></div><div style="margin-bottom:9pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:13.5pt;font-weight:700;line-height:120%">CURRENT REPORT</span></div><div style="margin-bottom:9pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</span></div><div style="margin-bottom:9pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Date of Report (Date of earliest event reported):  <ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt:datemonthdayyearen" name="dei:DocumentPeriodEndDate" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGV4dHJlZ2lvbjo5YzE5NDAxYTA4M2E0NTcyOTk5MDcyZTVkYmQxMDMwOF8yMTg_a2fbbbbd-f464-4571-8515-de059c032bab">June&#160;24, 2021</ix:nonNumeric> </span></div><div style="margin-bottom:3pt;margin-top:5pt;text-align:center"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:67.251%"><tr><td style="width:1.0%"></td><td style="width:98.900%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:22pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" name="dei:EntityRegistrantName" 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colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">(I.R.S. employer<br/>identification no.)</span></td></tr></table></div><div style="margin-bottom:3pt;text-align:center"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:62.719%"><tr><td style="width:1.0%"></td><td style="width:36.196%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:17.314%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:17.314%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:24.776%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New 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id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6ZDM4M2MyYWNkZWRiNDk1ZWE3Mzg1ZTNhMGNjNzEyNDEvdGFibGVyYW5nZTpkMzgzYzJhY2RlZGI0OTVlYTczODVlM2EwY2M3MTI0MV8wLTEtMS0xLTA_6ef3af4e-7692-454c-a44b-6af3d0c9ca4e">(212)</ix:nonNumeric></span></div></td><td colspan="3" style="border-bottom:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="margin-top:9pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" name="dei:LocalPhoneNumber" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6ZDM4M2MyYWNkZWRiNDk1ZWE3Mzg1ZTNhMGNjNzEyNDEvdGFibGVyYW5nZTpkMzgzYzJhY2RlZGI0OTVlYTczODVlM2EwY2M3MTI0MV8wLTItMS0xLTA_1258926c-a1e5-43a4-8c3c-5ad53264ba72">658-7470</ix:nonNumeric></span></div></td><td colspan="3" style="border-bottom:1pt solid #000000;padding:0 1pt"></td></tr><tr><td colspan="12" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:100%">(Registrant's telephone number, including area code)</span></td></tr></table></div><div style="margin-bottom:9pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:</span></div><div style="margin-top:5pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:100.000%"><tr><td style="width:1.0%"></td><td style="width:2.554%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:95.246%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial Unicode MS',sans-serif;font-size:12pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt-sec:boolballotbox" name="dei:WrittenCommunications" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6NDBiOTg1NWM1ZTM1NGIyYmE4YmEyZGNmNWM3NmY0YjIvdGFibGVyYW5nZTo0MGI5ODU1YzVlMzU0YjJiYThiYTJkY2Y1Yzc2ZjRiMl8wLTAtMS0xLTA_1122996d-8ef2-4cfb-a9d9-5f0259009a45">&#9744;</ix:nonNumeric></span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:100%">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</span></td></tr><tr style="height:6pt"><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial Unicode MS',sans-serif;font-size:12pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt-sec:boolballotbox" name="dei:SolicitingMaterial" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6NDBiOTg1NWM1ZTM1NGIyYmE4YmEyZGNmNWM3NmY0YjIvdGFibGVyYW5nZTo0MGI5ODU1YzVlMzU0YjJiYThiYTJkY2Y1Yzc2ZjRiMl8yLTAtMS0xLTA_6f038dba-ebcf-4d6c-aa15-60fc4360baf4">&#9744;</ix:nonNumeric></span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:100%">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</span></td></tr><tr style="height:6pt"><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial Unicode MS',sans-serif;font-size:12pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt-sec:boolballotbox" name="dei:PreCommencementTenderOffer" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6NDBiOTg1NWM1ZTM1NGIyYmE4YmEyZGNmNWM3NmY0YjIvdGFibGVyYW5nZTo0MGI5ODU1YzVlMzU0YjJiYThiYTJkY2Y1Yzc2ZjRiMl80LTAtMS0xLTA_746c5514-5ab7-49db-bfca-dcd72ad81ac6">&#9744;</ix:nonNumeric></span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:100%">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act<br/>(17 CFR 240.14d-2(b))</span></td></tr><tr style="height:6pt"><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial Unicode MS',sans-serif;font-size:12pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt-sec:boolballotbox" name="dei:PreCommencementIssuerTenderOffer" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6NDBiOTg1NWM1ZTM1NGIyYmE4YmEyZGNmNWM3NmY0YjIvdGFibGVyYW5nZTo0MGI5ODU1YzVlMzU0YjJiYThiYTJkY2Y1Yzc2ZjRiMl82LTAtMS0xLTA_da555b92-2a0f-44df-bbe6-1e6c5c043dea">&#9744;</ix:nonNumeric></span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:100%">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act<br/>(17 CFR 240.13e-4c))</span></td></tr></table></div><div style="margin-bottom:3pt;text-align:center"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.415%"><tr><td style="width:1.0%"></td><td style="width:40.517%"></td><td style="width:0.1%"></td><td style="width:0.1%"></td><td style="width:0.535%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:14.047%"></td><td style="width:0.1%"></td><td style="width:0.1%"></td><td style="width:0.535%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:40.666%"></td><td style="width:0.1%"></td></tr><tr><td colspan="15" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:100%">Securities registered pursuant to Section 12(b) of the Act:</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:100%">Title of each class</span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:100%">Trading Symbol</span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:100%">Name of each exchange on which registered</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i4d4517c58a024c7980282f5a237c2701_D20210624-20210624" name="dei:Security12bTitle" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6MTMxZDE4MjBmOWFlNGNiMDkwZDZkNTQ1OTYzNGM3NDQvdGFibGVyYW5nZToxMzFkMTgyMGY5YWU0Y2IwOTBkNmQ1NDU5NjM0Yzc0NF8yLTAtMS0xLTA_a406b954-2681-408e-91c8-a99295a555d9">Common stock, par value $0.01 per share</ix:nonNumeric></span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i4d4517c58a024c7980282f5a237c2701_D20210624-20210624" name="dei:TradingSymbol" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6MTMxZDE4MjBmOWFlNGNiMDkwZDZkNTQ1OTYzNGM3NDQvdGFibGVyYW5nZToxMzFkMTgyMGY5YWU0Y2IwOTBkNmQ1NDU5NjM0Yzc0NF8yLTItMS0xLTA_43cdbf39-c44b-4f78-9749-3f959f0686b8">AMBC</ix:nonNumeric></span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i4d4517c58a024c7980282f5a237c2701_D20210624-20210624" format="ixt-sec:exchnameen" name="dei:SecurityExchangeName" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6MTMxZDE4MjBmOWFlNGNiMDkwZDZkNTQ1OTYzNGM3NDQvdGFibGVyYW5nZToxMzFkMTgyMGY5YWU0Y2IwOTBkNmQ1NDU5NjM0Yzc0NF8yLTQtMS0xLTA_58772190-a94b-4d23-9cf7-bd009cb2c2e1">New York Stock Exchange</ix:nonNumeric></span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i9c26897652ba423ebc667422edcf60e6_D20210624-20210624" name="dei:Security12bTitle" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6MTMxZDE4MjBmOWFlNGNiMDkwZDZkNTQ1OTYzNGM3NDQvdGFibGVyYW5nZToxMzFkMTgyMGY5YWU0Y2IwOTBkNmQ1NDU5NjM0Yzc0NF8zLTAtMS0xLTA_273a1f05-5c55-413c-b43f-01da027d5e50">Warrants</ix:nonNumeric></span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i9c26897652ba423ebc667422edcf60e6_D20210624-20210624" name="dei:TradingSymbol" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6MTMxZDE4MjBmOWFlNGNiMDkwZDZkNTQ1OTYzNGM3NDQvdGFibGVyYW5nZToxMzFkMTgyMGY5YWU0Y2IwOTBkNmQ1NDU5NjM0Yzc0NF8zLTItMS0xLTA_67500c6d-a584-4c61-b214-cade3c64e8fc">AMBC WS</ix:nonNumeric></span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i9c26897652ba423ebc667422edcf60e6_D20210624-20210624" format="ixt-sec:exchnameen" name="dei:SecurityExchangeName" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6MTMxZDE4MjBmOWFlNGNiMDkwZDZkNTQ1OTYzNGM3NDQvdGFibGVyYW5nZToxMzFkMTgyMGY5YWU0Y2IwOTBkNmQ1NDU5NjM0Yzc0NF8zLTQtMS0xLTA_7ffb658e-8771-45a6-a3d0-08ba9eceac4d">New York Stock Exchange</ix:nonNumeric></span></td></tr></table></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Indicate by check mark whether the registrant is an emerging growth company as defined in Rule&#160;405 under the Securities Act (17 CFR 230.405) or Rule&#160;12b-2 under the Exchange Act (17 CFR 240.12b-2). </span></div><div style="margin-top:5pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:33.333%"><tr><td style="width:1.0%"></td><td style="width:84.864%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:12.936%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="margin-bottom:3pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">Emerging growth company</span></div></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="margin-bottom:3pt;text-align:center"><span style="color:#000000;font-family:'Arial Unicode MS',sans-serif;font-size:11pt;font-weight:400;line-height:100%"><ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt-sec:boolballotbox" name="dei:EntityEmergingGrowthCompany" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xL2ZyYWc6OWMxOTQwMWEwODNhNDU3Mjk5OTA3MmU1ZGJkMTAzMDgvdGFibGU6M2E1MWNlODZlOGZkNDY2M2EwMTIyNGM0MjdmOWE1YmIvdGFibGVyYW5nZTozYTUxY2U4NmU4ZmQ0NjYzYTAxMjI0YzQyN2Y5YTViYl8wLTEtMS0xLTA_957ac22e-2afd-411b-8e74-1aaa4f725916">&#9744;</ix:nonNumeric></span></div></td></tr></table></div><div><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:100.000%"><tr><td style="width:1.0%"></td><td style="width:32.087%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:4.747%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:59.866%"></td><td style="width:0.1%"></td></tr><tr><td colspan="9" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="margin-bottom:3pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided  pursuant to</span></div></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">Section 13(a) of the Exchange Act.</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="margin-bottom:3pt"><span style="color:#000000;font-family:'Arial Unicode MS',sans-serif;font-size:12pt;font-weight:400;line-height:100%">&#9744;</span></div></td><td colspan="3" style="padding:0 1pt"></td></tr></table></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div><span><br/></span></div></div></div><div id="i86b2d1c957d6404391b5af154f3993bb_10"></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Item 8.01. Other Events.</span></div><div style="margin-bottom:3pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:700;line-height:120%">Senior Secured Notes Offering</span></div><div style="margin-bottom:6pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">On <ix:nonNumeric contextRef="i6c3bb8eb64594b00a4dd53aad039954b_D20210624-20210624" format="ixt:datemonthdayyearen" name="dei:DocumentPeriodEndDate" id="id3VybDovL2RvY3MudjEvZG9jOjg2YjJkMWM5NTdkNjQwNDM5MWI1YWYxNTRmMzk5M2JiL3NlYzo4NmIyZDFjOTU3ZDY0MDQzOTFiNWFmMTU0ZjM5OTNiYl8xMC9mcmFnOmM2YjZjZGE2NWU0ZDQ0NzhhMGM5NWRhMjcyNjE5M2Y1L3RleHRyZWdpb246YzZiNmNkYTY1ZTRkNDQ3OGEwYzk1ZGEyNzI2MTkzZjVfMTA5OTUxMTYzODgwMA_a2fbbbbd-f464-4571-8515-de059c032bab">June&#160;24, 2021</ix:nonNumeric>, Ambac Financial Group, Inc. (&#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">AFG</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221; or the &#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Company</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221;) issued a press release announcing that its wholly owned subsidiary, Sitka Holdings, LLC (&#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Sitka</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221;), has commenced a private offering of Floating Rate Senior Secured Notes due 2026 (the &#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Senior Secured Notes</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221;) in a transaction exempt from registration under the Securities Act of 1933, as amended (the &#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Securities Act</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221;).</span></div><div style="margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.</span></div><div style="margin-bottom:9pt;margin-top:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">This report does not constitute an offer to sell or a solicitation of an offer to buy the Senior Secured Notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. The Senior Secured Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:700;line-height:120%">Ambac LSNI Notes Redemption</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The proceeds from the Senior Secured Notes offering will be used to fund a portion of the full redemption of the currently outstanding Ambac LSNI, LLC (&#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Ambac LSNI</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221;) LIBOR plus 5.00% Insured Secured Notes due 2023 (the &#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Ambac LSNI Notes</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221;) and the secured note issued by AAC concurrent with the issuance of the Ambac LSNI Notes, with the remaining amount to be funded by other available liquidity. Concurrently with the commencement of the Senior Secured Notes offering, Ambac LSNI issued a notice of conditional full redemption in respect of all of the outstanding Ambac LSNI Notes. Such redemption will be conditioned upon the receipt of at least $1,162 million of cash proceeds from the offering of the Senior Secured Notes (the &#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Condition</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">&#8221;). Payment of the redemption price and surrender of the Ambac LSNI Notes for redemption will be made on the redemption date specified in the notice of redemption, unless the Condition is not satisfied, in which case the redemption will not occur.</span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:700;line-height:120%">Litigation Updates</span></div><div style="margin-bottom:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">In connection with the Senior Secured Notes offering, the Company is making the following information available to update current disclosure in our most recent SEC filed reports:</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Litigation Against Ambac Assurance Corporation (&#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%;text-decoration:underline">Ambac Assurance</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">&#8221; or &#8220;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%;text-decoration:underline">AAC</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">&#8221;)</span></div><div style="margin-bottom:6pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline">Monterey Bay Military Housing, LLC, et al. v. Ambac Assurance Corporation, et al. (United States District Court, Northern District of California, San Jose Division, Case No. 17-cv-04992-BLF, filed August 28, 2017).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">  Defendants served answers to the second amended complaint on April 21, 2021, asserting several affirmative defenses, including a defense for unclean hands focused on the plaintiffs&#8217; failure to maintain the project properties and falsification of maintenance records.  On May 24, 2021, plaintiffs moved to strike defendants&#8217; unclean hands defenses.  Defendants have filed oppositions to plaintiffs&#8217; motion to strike, which has been referred to the Magistrate Judge on the case for a Report and Recommendation.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline">Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00003, filed Jan. 16, 2020).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">  On May 11, 2021, the Financial Oversight and Management Board for Puerto Rico (the Oversight Board), Assured Guaranty Corporation, Assured Guaranty Municipal Corporation, and National Public Finance Guarantee Corporation (Assured and National)  jointly moved to stay this case with respect to Assured and National as a result of the  agreement with the Oversight Board, Assured and National with respect to the treatment of bonds issued by the Puerto Rico Highways and Transportation Authority (PRHTA) and the Puerto Rico </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">2</span></div></div></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">Convention Center District Authority (PRCCDA) (the PRHTA/PRCCDA Settlement).  Ambac Assurance and Financial Guaranty Insurance Company (FGIC) objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement. Discovery was deemed concluded on June 11, 2021.  Summary judgment briefing is expected to resume on July 16, 2021, with a hearing on the supplemental summary judgment briefs expected in September 2021.</span></div><div><span><br/></span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00004, filed Jan. 16, 2020).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">  On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement. Discovery was deemed concluded on June 11, 2021.  Summary judgment briefing is expected to resume on July 16, 2021, with a hearing on the supplemental summary judgment briefs expected in September 2021.</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00005, filed Jan. 16, 2020)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">.  On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement. Discovery was deemed concluded on June 11, 2021.  Summary judgment briefing is expected to resume on July 16, 2021, with a hearing on the supplemental summary judgment briefs expected in September 2021.</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00007, filed Jan. 16, 2020)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">. On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.</span></div><div style="margin-bottom:3pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Litigation Filed or Joined by Ambac Assurance</span></div><div style="margin-bottom:3pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">Puerto Rico</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:700;line-height:120%">:</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283), </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Ambac Assurance Corporation's Motion and Memorandum of Law in Support of Its Motion Concerning Application of the Automatic Stay to the Revenues Securing PRIFA Rum Tax Bonds </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">(Dkt. No. 7176, filed May 30, 2019) (PRIFA Stay Motion).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">  On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283), </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Motion of Assured Guaranty Corp., Assured Municipal Corp., Ambac </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">3</span></div></div></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Assurance Corporation, National Public Finance Guarantee Corporation, and Financial Guaranty Insurance Company for Relief from the Automatic Stay, or, in the Alternative, Adequate Protection </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">(Dkt. No. 10102, filed January 16, 2020) (PRHTA Stay Motion).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">  On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement. </span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283), </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Ambac Assurance Corporation, Financial Guaranty Insurance Company, Assured Guaranty Corp., Assured Municipal Corp., and the Bank of New York Mellon&#8217;s Motion Concerning Application of the Automatic Stay to the Revenues Securing the CCDA Bonds </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">(Dkt. No. 10104, filed January 16, 2020) (PRCCDA Stay Motion).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">  On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Ambac Assurance Corporation v. Merrill Lynch, Pierce, Fenner &amp; Smith Incorporated, Citigroup Global Markets Inc., Goldman Sachs &amp; Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley &amp; Co. LLC, Oriental Financial Services LLC, Popular Securities LLC, Raymond James &amp; Associates, Inc., RBC Capital Markets LLC, Samuel A. Ramirez &amp; Co. Inc., Santander Securities LLC, UBS Financial Services Inc., and UBS Securities LLC (Commonwealth of Puerto Rico, Court of First Instance, San Juan Superior Court, Case No. SJ-2020-CV-01505, filed February 19, 2020).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">  Defendants filed motions to dismiss on December 8 and 14, 2020; briefing on the motions to dismiss was completed on March 5, 2021. A hearing on the motions to dismiss was held on June 15, 2021. </span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17-bk-03283), Urgent Motion for Bridge Order, and Motion for Appointment as Trustees Under 11 U.S.C. &#167; 926, of Ambac Assurance Corporation, Assured Guaranty Corp., Assured Guaranty Municipal Corp., Financial Guaranty Insurance Company, and National Public Finance Guarantee Corporation (Dkt. No. 13708, filed July 17, 2020) (HTA Trustee Motion).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">  On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283), </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Disclosure Statement for Third Amended Title III Joint Plan of Adjustment of the Commonwealth of Puerto Rico, et al. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">(Dkt. No. 16741, filed May 11, 2021) (Disclosure Statement).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">  On May 11, 2021, the Oversight Board filed the Disclosure Statement for the third amended joint plan of adjustment (the Plan) for the Commonwealth of Puerto Rico, the Employees Retirement System of the Government of the Commonwealth of Puerto Rico (ERS), and PBA.  On May 13, 2021, the Oversight Board filed a motion for approval of the Disclosure Statement.  On June 15, 2021, Ambac Assurance filed an objection to approval of the Disclosure Statement on numerous grounds.  Briefing on the Disclosure Statement is expected to conclude on June 29, 2021, and a hearing on the approval of the Disclosure Statement is scheduled for July 13, 2021.</span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">4</span></div></div></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline">In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283), </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:112%;text-decoration:underline">Objection of Ambac Assurance Corporation, Pursuant to Bankruptcy Code Section 502 and Bankruptcy Rule 3007, to Claim Asserted by the Official Committee of Retired Employees of the Commonwealth of Puerto Rico Appointed in the Commonwealth&#8217;s Title III Case </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline">(Dkt. No. 16884, filed June 3, 2021) (Pension Claim Objection).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">  On June 3, 2021, Ambac Assurance filed a claim objection in the Commonwealth&#8217;s Title III case challenging the amount of the claim filed by the Retiree Committee against the Commonwealth, which asserts pension liabilities of at least $58.5 billion.  Ambac Assurance contends that this asserted pension liability is overstated by at least $9 billion, and seeks disallowance of the Retiree Committee&#8217;s proof of claim to the extent of the overstatement. On June 17, 2021, the Oversight Board and the Retiree Committee each indicated an intention to move to terminate the Pension Claim Objection.  The Oversight Board contended that Ambac lacked standing to bring the Pension Claim Objection and that the objection is moot; the Retiree Committee contended that the Pension Claim Objection should be addressed at confirmation.  Ambac responded on June 21, 2021, arguing that Ambac has standing to bring the Pension Claim Objection, and that either briefing should proceed on the merits of the Pension Claim Objection concurrently with any procedural objections, or the District Court should convert the Pension Claim Objection into a motion to estimate the pension liability claim under Bankruptcy Code section 502(c).</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-bottom:3pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">Student Loans Exposure:</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline">CFPB  v. Nat&#8217;l Collegiate Master Student Loan Trust (United States District Court, District of Delaware, Case No. 1:17-cv-01323, filed September 18, 2017).  </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">The CFPB filed an amended complaint on April 30, 2021.  On May 21, 2021, the Trusts and several intervenors, including Ambac Assurance, moved to dismiss the CFPB&#8217;s amended complaint for failure to state a claim.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:112%">.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:112%">RMBS Litigation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:700;line-height:112%">:</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline">Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. First Franklin Financial Corporation, Bank of America, N.A., Merrill Lynch, Pierce, Fenner &amp; Smith Inc., Merrill Lynch Mortgage Lending, Inc., and Merrill Lynch Mortgage Investors, Inc. (Supreme Court of the State of New York, County of New York, Case No. 651217/2012, filed April 16, 2012).  </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">Discovery has been completed.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline">Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. Countrywide Securities Corp. Countrywide Financial Corp. (a.k.a. Bank of America Home Loans) and Bank of America Corp. (Supreme Court of the State of New York, County of New York, Case No. 651612/2010, filed on September 28, 2010)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%">. After supplemental expert discovery, on August 12, 2020, Countrywide filed a motion to dismiss, or in the alternative for summary judgment on, Ambac Assurance&#8217;s fraud claim and on December 4, 2020, the Court granted Countrywide&#8217;s motion, resulting in dismissal of Ambac Assurance&#8217;s fraud claim.  On December 17, 2020, Ambac Assurance filed a notice of appeal from this decision. Oral argument on Ambac Assurance&#8217;s appeal of the court&#8217;s dismissal on December 4, 2020, of its fraud claim was held on April 20, 2021. On May 11, 2021, the Appellate, Division, First Department affirmed the dismissal of Ambac Assurance&#8217;s fraud claim. Ambac Assurance is not seeking further appellate review of this decision at this point in the case.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%;text-decoration:underline">Ambac Assurance Corporation v. U.S. Bank National Association (United States District Court, Southern District of New York, Docket No. 18-cv-5182 (LGS), filed June 8, 2018 (the SDNY Action)); In the matter of HarborView Mortgage Loan Trust 2005-10 (Minnesota state court, Docket No. 27-TR-CV-17-32 (the Minnesota Action)).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> On December 22, 2020, the court entered final judgment consistent with its prior decisions, and awarded Ambac Assurance nominal damages.  On January 12, 2021, Ambac Assurance filed a notice of appeal of that judgment. On March 9, 2021, Ambac Assurance filed its opening brief for its appeal of the granting by the court in the SDNY Action of U.S. Bank&#8217;s motion for </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">5</span></div></div></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">summary judgment with respect to Ambac Assurance&#8217;s repayment right in the trust waterfall.  Briefing on Ambac Assurance's appeal was completed on June 3, 2021.</span></div><div id="i86b2d1c957d6404391b5af154f3993bb_19"></div><div style="margin-bottom:9pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Forward-Looking Statements</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">In this report, statements that may constitute &#8220;forward-looking statements&#8221; within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as &#8220;estimate,&#8221; &#8220;project,&#8221; &#8220;plan,&#8221; &#8220;believe,&#8221; &#8220;anticipate,&#8221; &#8220;intend,&#8221; &#8220;planned,&#8221; &#8220;potential&#8221; and similar expressions, or future or conditional verbs such as &#8220;will,&#8221; &#8220;should,&#8221; &#8220;would,&#8221; &#8220;could,&#8221; and &#8220;may,&#8221; 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 &#8220;Risk Factors&#8221; in our most recent SEC filed quarterly or annual report.</span></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Any or all of management&#8217;s forward-looking statements here or in other publications may turn out to be incorrect and are based on management&#8217;s current belief or opinions. AFG&#8217;s and its subsidiaries&#8217; (&#8220;Ambac&#8221;) actual results may vary materially, and there are no guarantees about the performance of Ambac&#8217;s securities.  Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the highly speculative nature of AFG&#8217;s common stock and volatility in the price of AFG&#8217;s common stock; (2) Ambac's inability to realize the expected recoveries, including RMBS litigation recoveries, included in its financial statements which would have a materially adverse effect on AAC&#8217;s financial condition and may lead to regulatory intervention; (3) failure to recover claims paid on Puerto Rico exposures or realization of losses in amounts higher than expected; (4) increases to loss and loss expense reserves; (5) 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; (6) uncertainty concerning the Company&#8217;s ability to achieve value for holders of its securities, whether from AAC and its subsidiaries or from transactions or opportunities apart from AAC and its subsidiaries, including new business initiatives relating to the specialty property and casualty program insurance business, the managing general agency/underwriting business, or related businesses; (7) potential of rehabilitation proceedings against AAC;  (8) increased fiscal stress experienced by issuers of public finance obligations or an increased incidence of Chapter 9 filings or other restructuring proceedings by public finance issuers, including an increased risk of loss on revenue bonds of distressed public finance issuers due to judicial decisions adverse to revenue bond holders; (9) our inability to mitigate or remediate losses, commute or reduce insured exposures or achieve recoveries or investment objectives, or the failure of any transaction intended to accomplish one or more of these objectives to deliver anticipated results; (10) insufficiency or unavailability of collateral to pay secured obligations; (11) credit risk throughout Ambac&#8217;s business, including but not limited to credit risk related to residential mortgage-backed securities, student loan and other asset securitizations, public finance obligations and exposures to reinsurers; (12) the impact of catastrophic environmental or natural events, including catastrophic public health events like the COVID-19 pandemic, on significant portions of our insured and investment portfolios; (13) credit risks related to large single risks, risk concentrations and correlated risks; (14) the risk that Ambac&#8217;s risk management policies and practices do not anticipate certain risks and/or the magnitude of potential for loss; (15) risks associated with adverse selection as Ambac&#8217;s insured portfolio runs off; (16) Ambac&#8217;s substantial indebtedness could adversely affect its financial condition and </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">6</span></div></div></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="margin-bottom:9pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">operating flexibility; (17) 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; (18) Ambac may not be able to generate the significant amount of cash needed to service its debt and financial obligations, and may not be able to refinance its indebtedness; (19) restrictive covenants in agreements and instruments may impair Ambac&#8217;s ability to pursue or achieve its business strategies; (20) adverse effects on operating results or the Company&#8217;s financial position resulting from measures taken to reduce risks in its insured portfolio; (21) disagreements or disputes with Ambac's insurance regulators; (22) default by one or more of Ambac's portfolio investments, insured issuers or counterparties; (23) loss of control rights in transactions for which we provide insurance due to a finding that Ambac has defaulted; (24) adverse tax consequences or other costs resulting from the characterization of the AAC&#8217;s surplus notes or other obligations as equity; (25) risks attendant to the change in composition of securities in the Ambac&#8217;s investment portfolio; (26) adverse impacts from changes in prevailing interest rates; (27) our results of operation may be adversely affected by events or circumstances that result in the impairment of our intangible assets and/or goodwill that was recorded in connection with Ambac&#8217;s acquisition of 80% of the membership interests of Xchange; (28) risks associated with the expected discontinuance of the London Inter-Bank Offered Rate; (29) factors that may negatively influence the amount of installment premiums paid to the Ambac; (30) market risks impacting assets in the Ambac&#8217;s investment portfolio or the value of our assets posted as collateral in respect of interest rate swap transactions; (31) risks relating to determinations of amounts of impairments taken on investments; (32) 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 Ambac&#8217;s business, operations, financial position, profitability or cash flows; (33) actions of stakeholders whose interests are not aligned with broader interests of the Ambac's stockholders; (34) system security risks, data protection breaches and cyber attacks; (35) changes in accounting principles or practices that may impact Ambac&#8217;s reported financial results; (36) regulatory oversight of Ambac Assurance UK Limited (&#8220;Ambac UK&#8221;) and applicable regulatory restrictions may adversely affect our ability to realize value from Ambac UK or the amount of value we ultimately realize; (37) operational risks, including with respect to internal processes, risk and investment models, systems and employees, and failures in services or products provided by third parties; (38) Ambac&#8217;s financial position that may prompt departures of key employees and may impact the its ability to attract qualified executives and employees; (39) fluctuations in foreign currency exchange rates could adversely impact the insured portfolio in the event of loss reserves or claim payments denominated in a currency other than US dollars and the value of non-US dollar denominated securities in our investment portfolio; (40) disintermediation within the insurance industry that negatively impacts our managing general agency/underwriting business; (41) 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 (42) other risks and uncertainties that have not been identified at this time.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:8.8pt;font-weight:400;line-height:120%">  </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">7</span></div></div></div><div id="i86b2d1c957d6404391b5af154f3993bb_22"></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="-sec-extract:summary;margin-bottom:12pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">EXHIBIT INDEX</span></div><div style="margin-top:5pt;text-align:center"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.415%"><tr><td style="width:1.0%"></td><td style="width:9.341%"></td><td style="width:0.1%"></td><td style="width:0.1%"></td><td style="width:0.535%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:87.724%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">Exhibit</span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">Number</span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">Exhibit Description</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">99.1</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"></td><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><div><span style="color:#0000ff;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:100%;text-decoration:underline"><a style="-sec-extract:exhibit;color:#0000ff;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:100%;text-decoration:underline" href="#i86b2d1c957d6404391b5af154f3993bb_46">Press Release dated June 24, 2021</a></span></div></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">101.INS</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"></td><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document.</span></div></td></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">101.SCH</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"></td><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">XBRL Taxonomy Extension Schema Document.</span></div></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">101.CAL</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"></td><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">XBRL Taxonomy Extension Calculation Linkbase Document.</span></div></td></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">101.LAB</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"></td><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">XBRL Taxonomy Extension Label Linkbase Document.</span></div></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">101.PRE</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"></td><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">XBRL Taxonomy Extension Presentation Linkbase Document.</span></div></td></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">101.DEF</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"></td><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">XBRL Taxonomy Extension Definition Linkbase Document.</span></div></td></tr><tr><td colspan="3" style="background-color:#ffffff;border-bottom:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">104</span></td><td colspan="3" style="background-color:#ffffff;border-bottom:1pt solid #000000;padding:0 1pt"></td><td colspan="3" style="background-color:#ffffff;border-bottom:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags or embedded within the Inline XBRL document</span></div></td></tr></table></div><div id="i86b2d1c957d6404391b5af154f3993bb_25"></div><div style="margin-bottom:9pt;margin-top:12pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:120%">SIGNATURES </span></div><div style="margin-bottom:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </span></div><div style="margin-bottom:9pt;margin-top:5pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:95.614%"><tr><td style="width:1.0%"></td><td style="width:8.227%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:36.208%"></td><td style="width:0.1%"></td><td style="width:0.1%"></td><td style="width:0.870%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:3.792%"></td><td style="width:0.1%"></td><td style="width:0.1%"></td><td style="width:0.870%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:21.377%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:22.756%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="12" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">Ambac Financial Group, Inc.</span></td></tr><tr><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="12" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">(Registrant)</span></td></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="6" style="padding:0 1pt"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">Dated:</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">June 24, 2021</span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">By:</span></td><td colspan="3" style="padding:0 1pt"></td><td colspan="6" style="border-bottom:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="margin-bottom:1pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">/s/ William J. White</span></div></td></tr><tr><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="6" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">William J. White</span></td></tr><tr><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td><td colspan="6" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="padding-left:9pt;text-indent:-9pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">First Vice President, Secretary and Assistant General Counsel</span></div></td></tr></table></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">8</span></div></div></div><div id="i86b2d1c957d6404391b5af154f3993bb_46"></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div><span><br/></span></div><div id="i86b2d1c957d6404391b5af154f3993bb_49"></div><div style="-sec-extract:summary;margin-top:12pt;text-align:right"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:174%">Exhibit 99.1</span></div><div style="margin-top:12pt;text-align:center"><img src="ambc-20210624_g1.jpg" alt="ambc-20210624_g1.jpg" style="height:37px;margin-bottom:5pt;vertical-align:text-bottom;width:173px"/></div><div style="text-align:center"><span><br/></span></div><div style="text-align:center"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:174%">Ambac Launches Senior Secured Note Offering to Refinance Existing Ambac LSNI Senior Secured Notes</span></div><div style="margin-top:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">NEW YORK, NY June&#160;24, 2021 (BUSINESS WIRE)) --Ambac Financial Group, Inc. (NYSE: AMBC) ("Ambac"), a financial services holding company, today announced that its newly formed special purpose entity, Sitka Holdings, LLC (&#8220;Sitka&#8221; or the &#8220;Issuer&#8221;&#8221;), has launched a private offering, to eligible purchasers, of senior secured notes due 2026 (the &#8220;Sitka Senior Secured Notes&#8221;). </span></div><div style="margin-top:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Sitka Senior Secured Notes will be secured by all assets of Sitka, which include a secured note issued by Ambac Assurance Corporation (&#8220;AAC&#8221;) to Sitka (the &#8220;Ambac Note&#8221;). The Ambac Note will be secured by a pledge of AAC&#8217;s right, title and interest in (i) up to $1.4 billion of proceeds from certain litigations involving AAC related to residential mortgage-backed securities (the &#8220;RMBS Litigation&#8221;) and (ii) the capital stock of Ambac Assurance UK Limited (&#8220;Ambac UK&#8221;), a wholly-owned subsidiary of AAC. In addition, AAC will issue a financial guaranty insurance policy (the &#8220;Sitka Senior Secured Notes Policy&#8221;) to the trustee for the Sitka Senior Secured Notes for the benefit of the holders of the Sitka Senior Secured Notes irrevocably guaranteeing all regularly scheduled principal and interest payments in respect of the Sitka Senior Secured Notes as and when such payments become due and owing.</span></div><div style="margin-top:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The proceeds from this offering, which are expected to be at least $1,162 million, will be used to fund a portion of the full redemption of approximately $1,625 million of outstanding Ambac LSNI, LLC LIBOR plus 5.00% Insured Secured Notes due 2023 (the &#8220;Tier 1 Notes&#8221;) and the secured note issued by AAC concurrent with the issuance of the Tier 1 Notes.  The remaining balance of the Tier 1 notes will be redeemed utilizing other available sources of liquidity.    </span></div><div style="margin-top:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Sitka Senior Secured Notes will be offered in a private offering exempt from the registration requirements of the U.S. Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;). The Sitka Senior Secured Notes will be offered only to persons reasonably believed to be qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the Securities Act that are also qualified purchasers within the meaning of Section 2(a)(51) of the Investment Company Act of 1940, as amended, and to non-U.S. persons outside of the United States in compliance with Regulation S under the Securities Act. The Sitka Senior Secured Notes have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. There can be no assurance that the proposed offering of Sitka Senior Secured Notes will be completed.</span></div><div style="margin-bottom:9pt;margin-top:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">This press release is neither an offer to sell nor the solicitation of an offer to buy any of the Sitka Senior Secured Notes and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful.</span></div><div id="i86b2d1c957d6404391b5af154f3993bb_55"></div><div style="margin-bottom:6pt;margin-top:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">Contact</span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Lisa A. Kampf</span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Managing Director, Investor Relations</span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(212) 208-3177</span></div><div style="margin-bottom:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">lkampf@ambac.com</span></div><div id="i86b2d1c957d6404391b5af154f3993bb_58"></div><div style="margin-bottom:6pt"><span style="color:#22272b;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:115%">Forward-Looking Statements</span></div><div style="margin-bottom:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In this press release, statements that may constitute &#8220;forward-looking statements&#8221; within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as &#8220;estimate,&#8221; &#8220;project,&#8221; &#8220;plan,&#8221; &#8220;believe,&#8221; &#8220;anticipate,&#8221; &#8220;intend,&#8221; &#8220;planned,&#8221; &#8220;potential&#8221; and similar expressions, or future or conditional verbs such as &#8220;will,&#8221; &#8220;should,&#8221; &#8220;would,&#8221; &#8220;could,&#8221; and &#8220;may,&#8221; or the negative of those expressions or verbs, identify forward-looking </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">9</span></div></div></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="margin-bottom:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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 &#8220;Risk Factors&#8221; </span></div><div style="margin-bottom:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Any or all of management&#8217;s forward-looking statements here or in other publications may turn out to be incorrect and are based on management&#8217;s current belief or opinions. AFG&#8217;s and its subsidiaries&#8217; (&#8220;Ambac&#8221;) actual results may vary materially, and there are no guarantees about the performance of Ambac&#8217;s securities.  Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the highly speculative nature of AFG&#8217;s common stock and volatility in the price of AFG&#8217;s common stock; (2) Ambac's inability to realize the expected recoveries, including RMBS litigation recoveries, included in its financial statements which would have a materially adverse effect on AAC&#8217;s financial condition and may lead to regulatory intervention; (3) failure to recover claims paid on Puerto Rico exposures or realization of losses in amounts higher than expected; (4) increases to loss and loss expense reserves; (5) 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; (6) uncertainty concerning the Company&#8217;s ability to achieve value for holders of its securities, whether from AAC and its subsidiaries or from transactions or opportunities apart from AAC and its subsidiaries, including new business initiatives relating to the specialty property and casualty program insurance business, the managing general agency/underwriting business, or related businesses; (7) potential of rehabilitation proceedings against AAC;  (8) increased fiscal stress experienced by issuers of public finance obligations or an increased incidence of Chapter 9 filings or other restructuring proceedings by public finance issuers, including an increased risk of loss on revenue bonds of distressed public finance issuers due to judicial decisions adverse to revenue bond holders; (9) our inability to mitigate or remediate losses, commute or reduce insured exposures or achieve recoveries or investment objectives, or the failure of any transaction intended to accomplish one or more of these objectives to deliver anticipated results; (10) insufficiency or unavailability of collateral to pay secured obligations; (11) credit risk throughout Ambac&#8217;s business, including but not limited to credit risk related to residential mortgage-backed securities, student loan and other asset securitizations, public finance obligations and exposures to reinsurers; (12) the impact of catastrophic environmental or natural events, including catastrophic public health events like the COVID-19 pandemic, on significant portions of our insured and investment portfolios; (13) credit risks related to large single risks, risk concentrations and correlated risks; (14) the risk that Ambac&#8217;s risk management policies and practices do not anticipate certain risks and/or the magnitude of potential for loss; (15) risks associated with adverse selection as Ambac&#8217;s insured portfolio runs off; (16) Ambac&#8217;s substantial indebtedness could adversely affect its financial condition and operating flexibility; (17) 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; (18) Ambac may not be able to generate the significant amount of cash needed to service its debt and financial obligations, and may not be able to refinance its indebtedness; (19) restrictive covenants in agreements and instruments may impair Ambac&#8217;s ability to pursue or achieve its business strategies; (20) adverse effects on operating results or the Company&#8217;s financial position resulting from measures taken to reduce risks in its insured portfolio; (21) disagreements or disputes with Ambac's insurance regulators; (22) default by one or more of Ambac's portfolio investments, insured issuers or counterparties; (23) loss of control rights in transactions for which we provide insurance due to a finding that Ambac has defaulted; (24) adverse tax consequences or other costs resulting from the characterization of the AAC&#8217;s surplus notes or other obligations as equity; (25) risks attendant to the change in composition of securities in the Ambac&#8217;s investment portfolio; (26) adverse impacts from changes in prevailing interest rates; (27) our results of operation may be adversely affected by events or circumstances that result in the impairment of our intangible assets and/or goodwill that was recorded in connection with Ambac&#8217;s acquisition of 80% of the membership interests of Xchange; (28) risks associated with the expected discontinuance of the London Inter-Bank Offered Rate; (29) factors that may negatively influence the amount of installment premiums paid to the Ambac; (30) market risks impacting assets in the Ambac&#8217;s investment portfolio or the value of our assets posted as collateral in respect of interest rate swap transactions; (31) risks relating to determinations of amounts of impairments taken on investments; (32) 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 Ambac&#8217;s business, operations, financial position, profitability or cash flows; (33) actions of stakeholders whose interests are not aligned with broader interests of the Ambac's stockholders; (34) system security risks, data protection breaches and cyber attacks; (35) changes in accounting principles or practices that may impact Ambac&#8217;s reported financial results; (36) regulatory </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">10</span></div></div></div><hr style="page-break-after:always"/><div style="min-height:45pt;width:100%"><div><span><br/></span></div></div><div style="margin-bottom:9pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">oversight of Ambac Assurance UK Limited (&#8220;Ambac UK&#8221;) and applicable regulatory restrictions may adversely affect our ability to realize value from Ambac UK or the amount of value we ultimately realize; (37) operational risks, including with respect to internal processes, risk and investment models, systems and employees, and failures in services or products provided by third parties; (38) Ambac&#8217;s financial position that may prompt departures of key employees and may impact the its ability to attract qualified executives and employees; (39) fluctuations in foreign currency exchange rates could adversely impact the insured portfolio in the event of loss reserves or claim payments denominated in a currency other than US dollars and the value of non-US dollar denominated securities in our investment portfolio; (40) disintermediation within the insurance industry that negatively impacts our managing general agency/underwriting business; (41) 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 (42) other risks and uncertainties that have not been identified at this time.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:8.8pt;font-weight:400;line-height:120%">  </span></div><div style="height:45pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">11</span></div></div></div></body></html>
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ambc-20210624
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 24, 2021
Ambac Financial Group, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
1-10777
13-3621676
(State of incorporation)
(Commission
file number)
(I.R.S. employer
identification no.)
One World Trade Center
New York
NY
10007
(Address of principal executive offices)
(212)
658-7470
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, par value $0.01 per share
AMBC
New York Stock Exchange
Warrants
AMBC WS
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided  pursuant to
Section 13(a) of the Exchange Act.
☐
Item 8.01. Other Events.
Senior Secured Notes Offering
On
June 24, 2021
, Ambac Financial Group, Inc. ("
AFG
" or the "
Company
") issued a press release announcing that its wholly owned subsidiary, Sitka Holdings, LLC ("
Sitka
"), has commenced a private offering of Floating Rate Senior Secured Notes due 2026 (the "
Senior Secured Notes
") in a transaction exempt from registration under the Securities Act of 1933, as amended (the "
Securities Act
").
A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
This report does not constitute an offer to sell or a solicitation of an offer to buy the Senior Secured Notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. The Senior Secured Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Ambac LSNI Notes Redemption
The proceeds from the Senior Secured Notes offering will be used to fund a portion of the full redemption of the currently outstanding Ambac LSNI, LLC ("
Ambac LSNI
") LIBOR plus 5.00% Insured Secured Notes due 2023 (the "
Ambac LSNI Notes
") and the secured note issued by AAC concurrent with the issuance of the Ambac LSNI Notes, with the remaining amount to be funded by other available liquidity. Concurrently with the commencement of the Senior Secured Notes offering, Ambac LSNI issued a notice of conditional full redemption in respect of all of the outstanding Ambac LSNI Notes. Such redemption will be conditioned upon the receipt of at least $1,162 million of cash proceeds from the offering of the Senior Secured Notes (the "
Condition
"). Payment of the redemption price and surrender of the Ambac LSNI Notes for redemption will be made on the redemption date specified in the notice of redemption, unless the Condition is not satisfied, in which case the redemption will not occur.
Litigation Updates
In connection with the Senior Secured Notes offering, the Company is making the following information available to update current disclosure in our most recent SEC filed reports:
Litigation Against Ambac Assurance Corporation ("
Ambac Assurance
" or "
AAC
")
Monterey Bay Military Housing, LLC, et al. v. Ambac Assurance Corporation, et al. (United States District Court, Northern District of California, San Jose Division, Case No. 17-cv-04992-BLF, filed August 28, 2017).
Defendants served answers to the second amended complaint on April 21, 2021, asserting several affirmative defenses, including a defense for unclean hands focused on the plaintiffs' failure to maintain the project properties and falsification of maintenance records.  On May 24, 2021, plaintiffs moved to strike defendants' unclean hands defenses.  Defendants have filed oppositions to plaintiffs' motion to strike, which has been referred to the Magistrate Judge on the case for a Report and Recommendation.
Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00003, filed Jan. 16, 2020).
On May 11, 2021, the Financial Oversight and Management Board for Puerto Rico (the Oversight Board), Assured Guaranty Corporation, Assured Guaranty Municipal Corporation, and National Public Finance Guarantee Corporation (Assured and National)  jointly moved to stay this case with respect to Assured and National as a result of the  agreement with the Oversight Board, Assured and National with respect to the treatment of bonds issued by the Puerto Rico Highways and Transportation Authority (PRHTA) and the Puerto Rico
2
Convention Center District Authority (PRCCDA) (the PRHTA/PRCCDA Settlement).  Ambac Assurance and Financial Guaranty Insurance Company (FGIC) objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement. Discovery was deemed concluded on June 11, 2021.  Summary judgment briefing is expected to resume on July 16, 2021, with a hearing on the supplemental summary judgment briefs expected in September 2021.
Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00004, filed Jan. 16, 2020).
On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement. Discovery was deemed concluded on June 11, 2021.  Summary judgment briefing is expected to resume on July 16, 2021, with a hearing on the supplemental summary judgment briefs expected in September 2021.
Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00005, filed Jan. 16, 2020)
.  On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement. Discovery was deemed concluded on June 11, 2021.  Summary judgment briefing is expected to resume on July 16, 2021, with a hearing on the supplemental summary judgment briefs expected in September 2021.
Financial Oversight and Management Board for Puerto Rico v. Ambac Assurance Corp., et al (United States District Court, District of Puerto Rico, No. 20-ap-00007, filed Jan. 16, 2020)
. On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.
Litigation Filed or Joined by Ambac Assurance
Puerto Rico
:
In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283),
Ambac Assurance Corporation's Motion and Memorandum of Law in Support of Its Motion Concerning Application of the Automatic Stay to the Revenues Securing PRIFA Rum Tax Bonds
(Dkt. No. 7176, filed May 30, 2019) (PRIFA Stay Motion).
On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.
In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283),
Motion of Assured Guaranty Corp., Assured Municipal Corp., Ambac
3
Assurance Corporation, National Public Finance Guarantee Corporation, and Financial Guaranty Insurance Company for Relief from the Automatic Stay, or, in the Alternative, Adequate Protection
(Dkt. No. 10102, filed January 16, 2020) (PRHTA Stay Motion).
On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.
In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283),
Ambac Assurance Corporation, Financial Guaranty Insurance Company, Assured Guaranty Corp., Assured Municipal Corp., and the Bank of New York Mellon's Motion Concerning Application of the Automatic Stay to the Revenues Securing the CCDA Bonds
(Dkt. No. 10104, filed January 16, 2020) (PRCCDA Stay Motion).
On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.
Ambac Assurance Corporation v. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Oriental Financial Services LLC, Popular Securities LLC, Raymond James & Associates, Inc., RBC Capital Markets LLC, Samuel A. Ramirez & Co. Inc., Santander Securities LLC, UBS Financial Services Inc., and UBS Securities LLC (Commonwealth of Puerto Rico, Court of First Instance, San Juan Superior Court, Case No. SJ-2020-CV-01505, filed February 19, 2020).
Defendants filed motions to dismiss on December 8 and 14, 2020; briefing on the motions to dismiss was completed on March 5, 2021. A hearing on the motions to dismiss was held on June 15, 2021.
In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17-bk-03283), Urgent Motion for Bridge Order, and Motion for Appointment as Trustees Under 11 U.S.C. § 926, of Ambac Assurance Corporation, Assured Guaranty Corp., Assured Guaranty Municipal Corp., Financial Guaranty Insurance Company, and National Public Finance Guarantee Corporation (Dkt. No. 13708, filed July 17, 2020) (HTA Trustee Motion).
On May 11, 2021, the Oversight Board, Assured, and National jointly moved to stay this case with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.  Ambac Assurance and FGIC objected to the motion to stay on May 18, 2021, and briefing on the motion to stay concluded on May 21, 2021.  On May 25, 2021, the District Court ordered this case stayed with respect to Assured and National as a result of the PRHTA/PRCCDA Settlement.
In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283),
Disclosure Statement for Third Amended Title III Joint Plan of Adjustment of the Commonwealth of Puerto Rico, et al.
(Dkt. No. 16741, filed May 11, 2021) (Disclosure Statement).
On May 11, 2021, the Oversight Board filed the Disclosure Statement for the third amended joint plan of adjustment (the Plan) for the Commonwealth of Puerto Rico, the Employees Retirement System of the Government of the Commonwealth of Puerto Rico (ERS), and PBA.  On May 13, 2021, the Oversight Board filed a motion for approval of the Disclosure Statement.  On June 15, 2021, Ambac Assurance filed an objection to approval of the Disclosure Statement on numerous grounds.  Briefing on the Disclosure Statement is expected to conclude on June 29, 2021, and a hearing on the approval of the Disclosure Statement is scheduled for July 13, 2021.
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In re Financial Oversight and Management Board for Puerto Rico (United States District Court, District of Puerto Rico, No. 1:17- bk-03283),
Objection of Ambac Assurance Corporation, Pursuant to Bankruptcy Code Section 502 and Bankruptcy Rule 3007, to Claim Asserted by the Official Committee of Retired Employees of the Commonwealth of Puerto Rico Appointed in the Commonwealth's Title III Case
(Dkt. No. 16884, filed June 3, 2021) (Pension Claim Objection).
On June 3, 2021, Ambac Assurance filed a claim objection in the Commonwealth's Title III case challenging the amount of the claim filed by the Retiree Committee against the Commonwealth, which asserts pension liabilities of at least $58.5 billion.  Ambac Assurance contends that this asserted pension liability is overstated by at least $9 billion, and seeks disallowance of the Retiree Committee's proof of claim to the extent of the overstatement. On June 17, 2021, the Oversight Board and the Retiree Committee each indicated an intention to move to terminate the Pension Claim Objection.  The Oversight Board contended that Ambac lacked standing to bring the Pension Claim Objection and that the objection is moot; the Retiree Committee contended that the Pension Claim Objection should be addressed at confirmation.  Ambac responded on June 21, 2021, arguing that Ambac has standing to bring the Pension Claim Objection, and that either briefing should proceed on the merits of the Pension Claim Objection concurrently with any procedural objections, or the District Court should convert the Pension Claim Objection into a motion to estimate the pension liability claim under Bankruptcy Code section 502(c).
Student Loans Exposure:
CFPB  v. Nat'l Collegiate Master Student Loan Trust (United States District Court, District of Delaware, Case No. 1:17-cv-01323, filed September 18, 2017).
The CFPB filed an amended complaint on April 30, 2021.  On May 21, 2021, the Trusts and several intervenors, including Ambac Assurance, moved to dismiss the CFPB's amended complaint for failure to state a claim.
.
RMBS Litigation
:
Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. First Franklin Financial Corporation, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Inc., Merrill Lynch Mortgage Lending, Inc., and Merrill Lynch Mortgage Investors, Inc. (Supreme Court of the State of New York, County of New York, Case No. 651217/2012, filed April 16, 2012).
Discovery has been completed.
Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. Countrywide Securities Corp. Countrywide Financial Corp. (a.k.a. Bank of America Home Loans) and Bank of America Corp. (Supreme Court of the State of New York, County of New York, Case No. 651612/2010, filed on September 28, 2010)
. After supplemental expert discovery, on August 12, 2020, Countrywide filed a motion to dismiss, or in the alternative for summary judgment on, Ambac Assurance's fraud claim and on December 4, 2020, the Court granted Countrywide's motion, resulting in dismissal of Ambac Assurance's fraud claim.  On December 17, 2020, Ambac Assurance filed a notice of appeal from this decision. Oral argument on Ambac Assurance's appeal of the court's dismissal on December 4, 2020, of its fraud claim was held on April 20, 2021. On May 11, 2021, the Appellate, Division, First Department affirmed the dismissal of Ambac Assurance's fraud claim. Ambac Assurance is not seeking further appellate review of this decision at this point in the case.
Ambac Assurance Corporation v. U.S. Bank National Association (United States District Court, Southern District of New York, Docket No. 18-cv-5182 (LGS), filed June 8, 2018 (the SDNY Action)); In the matter of HarborView Mortgage Loan Trust 2005-10 (Minnesota state court, Docket No. 27-TR-CV-17-32 (the Minnesota Action)).
On December 22, 2020, the court entered final judgment consistent with its prior decisions, and awarded Ambac Assurance nominal damages.  On January 12, 2021, Ambac Assurance filed a notice of appeal of that judgment. On March 9, 2021, Ambac Assurance filed its opening brief for its appeal of the granting by the court in the SDNY Action of U.S. Bank's motion for
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summary judgment with respect to Ambac Assurance's repayment right in the trust waterfall.  Briefing on Ambac Assurance's appeal was completed on June 3, 2021.
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. AFG's and its subsidiaries' ("Ambac") 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) Ambac's inability to realize the expected recoveries, including RMBS litigation recoveries, included in its financial statements which would have a materially adverse effect on AAC's financial condition and may lead to regulatory intervention; (3) failure to recover claims paid on Puerto Rico exposures or realization of losses in amounts higher than expected; (4) increases to loss and loss expense reserves; (5) 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; (6) uncertainty concerning the Company's ability to achieve value for holders of its securities, whether from AAC and its subsidiaries or from transactions or opportunities apart from AAC and its subsidiaries, including new business initiatives relating to the specialty property and casualty program insurance business, the managing general agency/underwriting business, or related businesses; (7) potential of rehabilitation proceedings against AAC;  (8) increased fiscal stress experienced by issuers of public finance obligations or an increased incidence of Chapter 9 filings or other restructuring proceedings by public finance issuers, including an increased risk of loss on revenue bonds of distressed public finance issuers due to judicial decisions adverse to revenue bond holders; (9) our inability to mitigate or remediate losses, commute or reduce insured exposures or achieve recoveries or investment objectives, or the failure of any transaction intended to accomplish one or more of these objectives to deliver anticipated results; (10) insufficiency or unavailability of collateral to pay secured obligations; (11) credit risk throughout Ambac's business, including but not limited to credit risk related to residential mortgage-backed securities, student loan and other asset securitizations, public finance obligations and exposures to reinsurers; (12) the impact of catastrophic environmental or natural events, including catastrophic public health events like the COVID-19 pandemic, on significant portions of our insured and investment portfolios; (13) credit risks related to large single risks, risk concentrations and correlated risks; (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) risks associated with adverse selection as Ambac's insured portfolio runs off; (16) Ambac's substantial indebtedness could adversely affect its financial condition and
6
operating flexibility; (17) 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; (18) Ambac may not be able to generate the significant amount of cash needed to service its debt and financial obligations, and may not be able to refinance its indebtedness; (19) restrictive covenants in agreements and instruments may impair Ambac's ability to pursue or achieve its business strategies; (20) adverse effects on operating results or the Company's financial position resulting from measures taken to reduce risks in its insured portfolio; (21) disagreements or disputes with Ambac's insurance regulators; (22) default by one or more of Ambac's portfolio investments, insured issuers or counterparties; (23) loss of control rights in transactions for which we provide insurance due to a finding that Ambac has defaulted; (24) adverse tax consequences or other costs resulting from the characterization of the AAC's surplus notes or other obligations as equity; (25) risks attendant to the change in composition of securities in the Ambac's investment portfolio; (26) adverse impacts from changes in prevailing interest rates; (27) our results of operation may be adversely affected by 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; (28) risks associated with the expected discontinuance of the London Inter-Bank Offered Rate; (29) factors that may negatively influence the amount of installment premiums paid to the Ambac; (30) market risks impacting assets in the Ambac's investment portfolio or the value of our assets posted as collateral in respect of interest rate swap transactions; (31) risks relating to determinations of amounts of impairments taken on investments; (32) 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 Ambac's business, operations, financial position, profitability or cash flows; (33) actions of stakeholders whose interests are not aligned with broader interests of the Ambac's stockholders; (34) system security risks, data protection breaches and cyber attacks; (35) changes in accounting principles or practices that may impact Ambac's reported financial results; (36) 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; (37) operational risks, including with respect to internal processes, risk and investment models, systems and employees, and failures in services or products provided by third parties; (38) Ambac's financial position that may prompt departures of key employees and may impact the its ability to attract qualified executives and employees; (39) fluctuations in foreign currency exchange rates could adversely impact the insured portfolio in the event of loss reserves or claim payments denominated in a currency other than US dollars and the value of non-US dollar denominated securities in our investment portfolio; (40) disintermediation within the insurance industry that negatively impacts our managing general agency/underwriting business; (41) 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 (42) other risks and uncertainties that have not been identified at this time.
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EXHIBIT INDEX
Exhibit
Number
Exhibit Description
99.1
Press Release dated June 24, 2021
101.INS
XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema Document.
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
104
Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags or embedded within the Inline XBRL document
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Ambac Financial Group, Inc.
(Registrant)
Dated:
June 24, 2021
By:
/s/ William J. White
William J. White
First Vice President, Secretary and Assistant General Counsel
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Exhibit 99.1
Ambac Launches Senior Secured Note Offering to Refinance Existing Ambac LSNI Senior Secured Notes
NEW YORK, NY June 24, 2021 (BUSINESS WIRE)) --Ambac Financial Group, Inc. (NYSE: AMBC) ("Ambac"), a financial services holding company, today announced that its newly formed special purpose entity, Sitka Holdings, LLC ("Sitka" or the "Issuer""), has launched a private offering, to eligible purchasers, of senior secured notes due 2026 (the "Sitka Senior Secured Notes").
The Sitka Senior Secured Notes will be secured by all assets of Sitka, which include a secured note issued by Ambac Assurance Corporation ("AAC") to Sitka (the "Ambac Note"). The Ambac Note will be secured by a pledge of AAC's right, title and interest in (i) up to $1.4 billion of proceeds from certain litigations involving AAC related to residential mortgage-backed securities (the "RMBS Litigation") and (ii) the capital stock of Ambac Assurance UK Limited ("Ambac UK"), a wholly-owned subsidiary of AAC. In addition, AAC will issue a financial guaranty insurance policy (the "Sitka Senior Secured Notes Policy") to the trustee for the Sitka Senior Secured Notes for the benefit of the holders of the Sitka Senior Secured Notes irrevocably guaranteeing all regularly scheduled principal and interest payments in respect of the Sitka Senior Secured Notes as and when such payments become due and owing.
The proceeds from this offering, which are expected to be at least $1,162 million, will be used to fund a portion of the full redemption of approximately $1,625 million of outstanding Ambac LSNI, LLC LIBOR plus 5.00% Insured Secured Notes due 2023 (the "Tier 1 Notes") and the secured note issued by AAC concurrent with the issuance of the Tier 1 Notes.  The remaining balance of the Tier 1 notes will be redeemed utilizing other available sources of liquidity.
The Sitka Senior Secured Notes will be offered in a private offering exempt from the registration requirements of the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Sitka Senior Secured Notes will be offered only to persons reasonably believed to be qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the Securities Act that are also qualified purchasers within the meaning of Section 2(a)(51) of the Investment Company Act of 1940, as amended, and to non-U.S. persons outside of the United States in compliance with Regulation S under the Securities Act. The Sitka Senior Secured Notes have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. There can be no assurance that the proposed offering of Sitka Senior Secured Notes will be completed.
This press release is neither an offer to sell nor the solicitation of an offer to buy any of the Sitka Senior Secured Notes and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful.
Contact
Lisa A. Kampf
Managing Director, Investor Relations
(212) 208-3177
lkampf@ambac.com
Forward-Looking Statements
In this press release, 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
9
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"
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. AFG's and its subsidiaries' ("Ambac") 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) Ambac's inability to realize the expected recoveries, including RMBS litigation recoveries, included in its financial statements which would have a materially adverse effect on AAC's financial condition and may lead to regulatory intervention; (3) failure to recover claims paid on Puerto Rico exposures or realization of losses in amounts higher than expected; (4) increases to loss and loss expense reserves; (5) 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; (6) uncertainty concerning the Company's ability to achieve value for holders of its securities, whether from AAC and its subsidiaries or from transactions or opportunities apart from AAC and its subsidiaries, including new business initiatives relating to the specialty property and casualty program insurance business, the managing general agency/underwriting business, or related businesses; (7) potential of rehabilitation proceedings against AAC;  (8) increased fiscal stress experienced by issuers of public finance obligations or an increased incidence of Chapter 9 filings or other restructuring proceedings by public finance issuers, including an increased risk of loss on revenue bonds of distressed public finance issuers due to judicial decisions adverse to revenue bond holders; (9) our inability to mitigate or remediate losses, commute or reduce insured exposures or achieve recoveries or investment objectives, or the failure of any transaction intended to accomplish one or more of these objectives to deliver anticipated results; (10) insufficiency or unavailability of collateral to pay secured obligations; (11) credit risk throughout Ambac's business, including but not limited to credit risk related to residential mortgage-backed securities, student loan and other asset securitizations, public finance obligations and exposures to reinsurers; (12) the impact of catastrophic environmental or natural events, including catastrophic public health events like the COVID-19 pandemic, on significant portions of our insured and investment portfolios; (13) credit risks related to large single risks, risk concentrations and correlated risks; (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) risks associated with adverse selection as Ambac's insured portfolio runs off; (16) Ambac's substantial indebtedness could adversely affect its financial condition and operating flexibility; (17) 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; (18) Ambac may not be able to generate the significant amount of cash needed to service its debt and financial obligations, and may not be able to refinance its indebtedness; (19) restrictive covenants in agreements and instruments may impair Ambac's ability to pursue or achieve its business strategies; (20) adverse effects on operating results or the Company's financial position resulting from measures taken to reduce risks in its insured portfolio; (21) disagreements or disputes with Ambac's insurance regulators; (22) default by one or more of Ambac's portfolio investments, insured issuers or counterparties; (23) loss of control rights in transactions for which we provide insurance due to a finding that Ambac has defaulted; (24) adverse tax consequences or other costs resulting from the characterization of the AAC's surplus notes or other obligations as equity; (25) risks attendant to the change in composition of securities in the Ambac's investment portfolio; (26) adverse impacts from changes in prevailing interest rates; (27) our results of operation may be adversely affected by 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; (28) risks associated with the expected discontinuance of the London Inter-Bank Offered Rate; (29) factors that may negatively influence the amount of installment premiums paid to the Ambac; (30) market risks impacting assets in the Ambac's investment portfolio or the value of our assets posted as collateral in respect of interest rate swap transactions; (31) risks relating to determinations of amounts of impairments taken on investments; (32) 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 Ambac's business, operations, financial position, profitability or cash flows; (33) actions of stakeholders whose interests are not aligned with broader interests of the Ambac's stockholders; (34) system security risks, data protection breaches and cyber attacks; (35) changes in accounting principles or practices that may impact Ambac's reported financial results; (36) regulatory
10
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; (37) operational risks, including with respect to internal processes, risk and investment models, systems and employees, and failures in services or products provided by third parties; (38) Ambac's financial position that may prompt departures of key employees and may impact the its ability to attract qualified executives and employees; (39) fluctuations in foreign currency exchange rates could adversely impact the insured portfolio in the event of loss reserves or claim payments denominated in a currency other than US dollars and the value of non-US dollar denominated securities in our investment portfolio; (40) disintermediation within the insurance industry that negatively impacts our managing general agency/underwriting business; (41) 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 (42) other risks and uncertainties that have not been identified at this time.
11