Bloomberg News

Ambac Financial Files 3rd Amended Plan of Reorganization

February 27, 2012

Ambac Financial Group Inc. (ABKFQ) said it has made a settlement offer to the Internal Revenue Service relating to the dispute regarding the tax treatment of CDS contracts.

The principal terms of the settlement offer include: a payment by the Segregated Account of Ambac Assurance Corp. of $100 million; a payment by Ambac Financial of $1.9 million; and the relinquishment by the Ambac Financial consolidated tax group of all loss carry-forwards resulting from losses on CDS contracts arising on or before Dec. 31, 2010, to the extent the loss carry-forwards exceed $3.4 billion.

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