AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 2, 1998
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AMBAC FINANCIAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
13-3621676
(I.R.S. EMPLOYER IDENTIFICATION NO.)
ONE STATE STREET PLAZA
NEW YORK, NEW YORK 10004
(212) 668-0340
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
RICHARD B. GROSS
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
AMBAC FINANCIAL GROUP, INC.
ONE STATE STREET PLAZA
NEW YORK, NEW YORK 10004
(212) 668-0340
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENTS FOR SERVICE)
COPIES TO:
MATTHEW J. MALLOW, ESQ. NORMAN D. SLONAKER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER BROWN & WOOD LLP
& FLOM LLP ONE WORLD TRADE CENTER,
919 THIRD AVENUE 57TH FLOOR
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10048
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |X|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
TITLE OF SECURITIES AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED BE REGISTERED OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER UNIT PRICE
<S> <C> <C> <C> <C>
Debt Securities $250,000,000 (1) (2) $250,000,000 (1) $73,750
</TABLE>
(1) In no event will the aggregate initial offering price of the
Debt Securities of Ambac Financial Group, Inc. ("Ambac")
issued under this Registration Statement exceed $250,000,000
or the equivalent thereof in one or more foreign currencies,
foreign currency units or composite currencies, exclusive of
accrued interest, if any. If any Debt Securities are issued
at an original issue discount, the principal amount of such
Debt Securities shall be increased by an amount such that the
aggregate initial offering price of all Debt Securities
registered hereunder does not exceed $250,000,000. The
proposed maximum aggregate offering price has been estimated
solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
(2) The proposed maximum offering price per unit will be determined
from time to time in connection with the issuance of the securities
registered hereunder.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
[FLAG]
Information contained herein is subject to amendment. A registration
statement relating to these securities has been filed with the Securities
and Exchange Commission. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities
laws of any such State.
SUBJECT TO COMPLETION, DATED JANUARY 2, 1998
Prospectus
BY THIS PROSPECTUS
AMBAC FINANCIAL GROUP, INC.
may offer
DEBT SECURITIES
We will provide the specific terms of securities to be
offered in supplements to this Prospectus. Supplements may also add,
update or change information contained or incorporated by reference in
this Prospectus. You should read this Prospectus and the supplements
carefully before you invest.
------------------
These securities have not been approved by the Securities and
Exchange Commission or any state securities commission. None of these
organizations has determined that this Prospectus, or any accompanying
Prospectus Supplement or Pricing Supplement, is accurate or complete. Any
representation to the contrary is a criminal offense.
-------------------
The date of this Prospectus is , 1998.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED UNDER THIS PROSPECTUS. THOSE TRANSACTIONS INCLUDE OVER-ALLOTMENT,
STABILIZING TRANSACTIONS, SHORT COVERING TRANSACTIONS AND PENALTY BIDS.
IF BEGUN, THEY MAY DISCONTINUE THOSE ACTIVITIES AT ANY TIME. FOR A
DESCRIPTION OF THOSE ACTIVITIES, SEE "PLAN OF DISTRIBUTION" IN THIS
PROSPECTUS.
Table of Contents
Page
Where You Can Find Additional Information............................4
Ambac Financial Group, Inc...........................................6
Use of Proceeds......................................................7
Ratio of Earnings to Fixed Charges...................................7
Description of the Debt Securities...................................8
Plan of Distribution................................................17
Legal Opinions......................................................18
Experts.............................................................18
WHERE YOU CAN FIND ADDITIONAL INFORMATION
As required by the Securities Exchange Act of 1934, as amended
(the "Securities Exchange Act"), Ambac Financial Group, Inc. ("Ambac" or
"we") files annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission ("SEC"). You
may read and copy any reports, proxy statements and other information that
we file with the SEC at the SEC's Public Reference Rooms at (a) 450 Fifth
Street, N.W., Washington, D.C. 20549; (b) Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511; and (c) Seven World Trade
Center, New York, New York 10048. You can also request copies of these
documents, upon payment of a duplicating fee, by writing to the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the SEC's Public Reference Rooms. Ambac's SEC filings are also
available to the public on the SEC's Internet site (http://www.sec.gov).
Ambac's common stock is listed on the New York Stock Exchange and you can
obtain information regarding Ambac from the Exchange at 20 Broad Street,
New York, New York 10005.
Ambac has filed a registration statement on Form S-3 with the SEC
covering the securities described in this Prospectus. For further
information with respect to Ambac and those securities, you should refer to
our registration statement and its exhibits. We have summarized certain key
provisions of contracts and other documents that we refer to in this
Prospectus. Because a summary may not contain all the information that is
important to you, you should review the full text of the document. We have
included copies of these documents as exhibits to our registration
statement.
The following documents, which we filed with the SEC under Section
13 of the Securities Exchange Act, are incorporated by reference in this
Prospectus. This means that important disclosure about Ambac is made by
referring you to specific documents that we filed with the SEC and are
considered to be a part of this Prospectus.
o Ambac's Annual Report and Form 10-K for the fiscal year ended
December 31, 1996;
o Ambac's quarterly reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997, and September 30,
1997;
o Ambac's Current Reports on Form 8-K dated February 14, 1997 and
March 12, 1997; and
o All other reports that we filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act since December 31,
1996.
We are also incorporating by reference into this Prospectus each
of the following documents we file with the SEC after the date of this
Prospectus and prior to the termination of the offering of the securities
offered by this Prospectus:
o Reports filed under Sections 13(a) and (c) of the
Securities Exchange Act;
o Definitive proxy or information statements filed under
Section 14 of the Securities Exchange Act in connection
with any subsequent stockholders' meeting; and
o Any reports filed under Section 15(d) of the Securities
Exchange Act.
Statements in this Prospectus or in a document incorporated by
reference may be modified or superseded by statements in this Prospectus,
a prospectus supplement or in any other document incorporated by
reference, regardless of when filed. Any modified or superseded statement
does not, except as so modified or superseded, constitute a part of this
Prospectus.
You should rely only on the information contained or
incorporated by reference in this Prospectus, any prospectus supplement
or any pricing supplement. We have not authorized anyone to provide you
with any other information. You should not assume that the information in
this Prospectus, an accompanying prospectus supplement or any document
incorporated by reference is accurate as of any date other than the date
on the front of the document.
You may request copies of all documents incorporated by
reference into this Prospectus (and exhibits incorporated by reference
into those documents) at no cost by writing or telephoning us at the
following address:
Richard B. Gross
Senior Vice President, General Counsel and Secretary
Ambac Financial Group, Inc.
One State Street Plaza
New York, New York 10004
(212) 668-0340
We are not making an offer of these securities in any state
where the offer is not permitted. We are required to disclose that the
Commissioner of Insurance of the State of North Carolina has not approved
or disapproved the offering of securities by this Prospectus nor has the
Commissioner determined the accuracy or adequacy of this Prospectus.
AMBAC FINANCIAL GROUP, INC.
Ambac is a holding company that provides through its affiliates
financial guarantee insurance and financial services to clients in both
the public and private sectors in the U.S. and abroad. Ambac's principal
operating subsidiary, Ambac Assurance Corporation ("Ambac Assurance"), is
a leading insurer of municipal bonds and structured securities, primarily
asset-backed securities (securities in which a specific pool of assets,
such as residential mortgages or home equity loans, provides the funds
for payments on the securities). Ambac also provides investment
agreements, interest rate swaps, investment management services and
electronic commerce solutions, principally to states, municipalities and
their authorities, school districts, and hospitals and health
organizations.
Ambac Assurance is primarily engaged in insuring municipal and
structured finance obligations and is the successor of the oldest
municipal bond insurance company, which wrote the first municipal bond
insurance policy in 1971. Financial guarantee insurance written by Ambac
Assurance guarantees payment when due of the principal and interest on
the obligation insured. In the case of default on the insured obligation,
payments under the insurance policy may not be accelerated by the
policyholder without Ambac Assurance's consent. Ambac Assurance seeks to
minimize the risk inherent in its insurance portfolio by maintaining a
diverse portfolio which spreads its risk across a number of criteria,
including issue size, type of bond, geographic area and obligor.
Ambac Assurance's ability to pay claims earned a triple-A rating
from national ratings agencies, including Moody's Investors Service,
Inc., Standard & Poor's Ratings Group, Fitch Investors Service, L.P. and
Nippon Investors Service, Inc. The strength of these ratings is essential
to Ambac Assurance's ability to enhance the credit of obligations it
insures.
Ambac provides investment agreements and interest rate swaps to
various public entities. Ambac Assurance insures these financial
instruments, allowing them to benefit from Ambac Assurance's strong
claims paying ratings. Municipal bond issuers use our investment
agreements to invest the money they raise with their bonds until they use
that money for its intended purpose. Ambac's clients use our insured
interest rate swaps to reduce the interest cost of the money they borrow
by locking in specific interest rates on their debt.
Through its investment adviser and broker-dealer affiliates,
Ambac provides investment advisory, cash management and administration
services, primarily to school districts and local government entities to
help manage their finances more effectively.
Because Ambac is a holding company, we depend on dividends from
our subsidiaries to pay dividends on our capital stock, to pay principal
and interest on our indebtedness and to pay our operating expenses. A
supplement to this Prospectus will discuss the limitations imposed by
insurance regulators on the ability of Ambac's subsidiaries to pay
dividends. We encourage you to read that discussion, and all risk factors
contained in any accompanying prospectus supplement, before you invest in
our securities.
USE OF PROCEEDS
Unless we tell you otherwise in an accompanying prospectus
supplement, we will use the net proceeds from the sale of any securities
offered by this Prospectus for general corporate purposes. Examples of
general corporate purposes include additions to working capital of
subsidiaries, acquisitions and repurchases of common stock.
RATIO OF EARNINGS TO FIXED CHARGES
The following table contains our ratio of earnings to fixed
charges for each of the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
1997 1996 1995 1994 1993 1992
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... 13.36x 17.91x 10.77x 10.14x 15.78x 12.18x
</TABLE>
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We computed the ratio of earnings to fixed charges by dividing
earnings before income taxes and extraordinary items plus fixed charges
by the fixed charges. For the purpose of this ratio, fixed charges
consist of interest expense incurred, capitalized interest, amortization
of debt expense and one-third of rental payments under operating leases
(an amount deemed representative of the appropriate interest factor).
DESCRIPTION OF THE DEBT SECURITIES
THE SECURITIES WE MAY OFFER
We may offer unsecured senior or subordinated debt securities in
an aggregate principal amount of up to $250,000,000. A prospectus
supplement will describe the specific amounts, prices and terms of any
securities we offer.
Throughout this Prospectus:
o the term "Senior Debt Securities" refers to our unsecured
senior debt securities;
o the term "Subordinated Debt Securities" refers to our
unsecured subordinated debt securities; and
o the term "Debt Securities" refers to Senior Debt
Securities and Subordinated Debt Securities.
ISSUANCE OF DEBT SECURITIES UNDER INDENTURE
Ambac will issue Debt Securities under an indenture (the
indenture, as supplemented from time to time, is referred to in this
Prospectus as the "Indenture"), dated as of August 1, 1991 between Ambac
and The Chase Manhattan Bank, which serves as the trustee under the
Indenture. A copy of the Indenture has been incorporated by reference as
an exhibit to the registration statement of which this Prospectus is a
part. This Prospectus contains a summary of certain provisions of the
Indenture. However, you should refer to the Indenture itself for a
complete understanding of its exact provisions.
The Indenture allows us to issue Debt Securities in an unlimited
aggregate principal amount and in one or more series at various times.
The specific terms of any series of Debt Securities will be established
by an indenture supplemental to the Indenture or a resolution of Ambac's
board of directors and may include certain terms not included in the
Indenture or exclude certain terms that are contained in the Indenture.
However, the specific terms of any series of Debt Securities will be
described in a prospectus supplement.
TERMS
The applicable prospectus supplement will describe the following
terms of the Debt Securities of each series:
o the title of the Debt Securities and whether they are
Subordinated Debt Securities or Senior Debt Securities;
o any limit on the aggregate principal amount of the Debt
Securities;
o the price or prices at which we will sell the Debt
Securities;
o the maturity date or dates of the Debt Securities;
o the per annum interest rate or rates, if any, on the
series and the date or dates from which any such interest
will accrue;
o whether the amount of payments of principal of (and
premium, if any) or interest on the Debt Securities may be
determined with reference to any index, formula or other
method, such as one or more currencies, commodities,
equity indices or other indices, and the manner of
determining the amount of such payments;
o the dates on which we will pay interest on the Debt
Securities and the regular record date for determining who
is entitled to the interest payable on any interest
payment date;
o the place or places where the principal of (and premium,
if any) and interest on the Debt Securities will be
payable;
o if we possess the option to do so, the periods within
which and the prices at which we may redeem the Debt
Securities, in whole or in part, pursuant to optional
redemption provisions, and the other terms and conditions
of any such provisions;
o our obligation, if any, to redeem, repay or purchase
Debt Securities by making periodic payments to a sinking
fund or through an analogous provision or at the option of
holders of the Debt Securities, and the period or periods
within which and the price or prices at which we will
redeem, repay or purchase the Debt Securities, in whole or
in part, pursuant to such obligation, and the other terms
and conditions of such obligation;
o the denominations in which the Debt Securities will be
issued, if other than $1,000 and integral multiples of
$1,000;
o the portion or methods of determining the portion of the
principal amount of the Debt Securities which we must pay
upon the acceleration of the maturity of the Debt
Securities in connection with an Event of Default (as
described below), if other than the full principal amount;
o the currency, currencies or currency unit in which we will
pay the principal of (and premium, if any) or interest, if
any, on the Debt Securities, if not United States dollars;
o provisions, if any, granting special rights to holders of
the Debt Securities upon the occurrence of specified
events;
o any deletions from, modifications of or additions to the
Events of Default or our covenants with respect to the
applicable series of Debt Securities, and whether or not
such Events of Default or covenants are consistent with
those contained in the Indenture;
o the application, if any, of the terms of the Indenture
relating to defeasance and covenant defeasance (which
terms are described below) to the Debt Securities;
o whether any of the Debt Securities will be issued in
global form and, if so, the terms and conditions upon
which global Debt Securities may be exchanged for
certificated Debt Securities;
o the depositary for global or certificated Debt Securities;
o any trustees, authenticating or paying agents, transfer
agents or registrars or other agents with respect to the
Debt Securities; and
o any other terms of the Debt Securities consistent with the
provisions of the Indenture.
SUBORDINATION
The prospectus supplement relating to any offering of
Subordinated Debt Securities will describe the specific subordination
provisions. However, unless otherwise noted in the prospectus supplement,
Subordinated Debt Securities will be subordinate and junior in right of
payment to all Senior Indebtedness of Ambac.
Under the Indenture, "Senior Indebtedness" means all notes or
other unsecured evidences of our indebtedness, whether outstanding on the
date of the Indenture or created, assumed or incurred at a later date,
for money we borrow (including all indebtedness of any other person for
money borrowed which we guarantee) not expressed to be subordinate or
junior in right of payment to any other of our indebtedness.
Unless otherwise noted in the accompanying prospectus
supplement, if we default in the payment of any principal of (or premium,
if any) or interest on any Senior Indebtedness when it becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise, then, unless and until such default is cured or
waived or ceases to exist, we will make no direct or indirect payment (in
cash, property, securities, by set-off or otherwise) in respect of the
principal of or interest on the Subordinated Debt Securities, or in
respect of any redemption, retirement, purchase or other acquisition of
any of the Subordinated Debt Securities.
If any of the following events occurs, we will pay in full all
Senior Indebtedness before we make any payment or distribution under the
Subordinated Debt Securities, whether in cash, securities or other
property, to any holder of Subordinated Debt Securities:
o any insolvency, bankruptcy, receivership, liquidation,
reorganization, or other similar case or proceeding
relating to us, our creditors or our assets;
o any proceeding for the liquidation, dissolution or other
winding-up of Ambac, voluntary or involuntary, whether or
not involving insolvency or bankruptcy;
o any general assignment by us for the benefit of creditors; or
o any other marshaling of our assets or liabilities.
In such event, any payment or distribution under the
Subordinated Debt Securities, whether in cash, securities or other
property, which would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Subordinated Debt Securities,
will be paid or delivered directly to the holders of Senior Indebtedness
in accordance with the priorities then existing among such holders until
all Senior Indebtedness has been paid in full. If any payment or
distribution under the Subordinated Debt Securities is received by any
holder of any Subordinated Debt Securities in contravention of any of the
terms of the Indenture and before all the Senior Indebtedness has been
paid in full, such payment or distribution or security will be received
in trust for the benefit of, and paid over or delivered and transferred
to, the holders of the Senior Indebtedness at the time outstanding in
accordance with the priorities then existing among such holders for
application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all such Senior Indebtedness in full.
The Indenture does not limit the issuance of additional Senior
Indebtedness.
Because we are a holding company, our rights and the rights of
our creditors, including the holders of Debt Securities, to participate
in the assets of any subsidiary upon its liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors, except
to the extent that we may ourself be a creditor with recognized claims
against the subsidiary.
RESTRICTIVE COVENANTS
Unless we tell you otherwise in an accompanying prospectus
supplement, the following restrictive covenants shall apply to each
series of Senior Debt Securities:
1. Limitation on Liens. So long as any Debt Securities are
outstanding, neither Ambac nor any of its subsidiaries will create, incur
or guarantee any debt which is secured by any mortgage, pledge, lien,
security interest or other encumbrance on any capital stock of Ambac
Assurance, any successor to the business of Ambac Assurance which is also
a subsidiary of Ambac or any corporation (other than Ambac) having direct
or indirect control of Ambac Assurance or any such successor. However,
this restriction will not apply if the Debt Securities then outstanding
are secured at least equally and ratably with the otherwise prohibited
secured debt so long as it is outstanding.
2. Limitations on Dispositions of Stock of Certain Subsidiaries.
So long as any Debt Securities are outstanding and subject to the
provisions of the Indenture regarding mergers, consolidations and sales
of assets, neither Ambac nor any of its subsidiaries will sell or
otherwise dispose of any shares of capital stock of Ambac Assurance, any
successor to the business of Ambac Assurance which is also a subsidiary
of Ambac or any corporation (other than Ambac) having direct or indirect
control of Ambac Assurance or any such successor, except for:
o a sale or other disposition of any of such stock to a
wholly-owned subsidiary of Ambac or of such subsidiary;
o a sale or other disposition of all of such stock for at
least fair value (as determined by Ambac's board of
directors acting in good faith); or
o a sale or other disposition of any of such stock for at
least fair value (as determined by Ambac's board of
directors acting in good faith), if, after such
transaction, Ambac and its subsidiaries would own more
than 80% of the issued and outstanding voting stock of
Ambac Assurance or any such successor.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
Under the Indenture, so long as any Debt Securities are
outstanding, we may not consolidate or merge with another corporation or
convey, transfer or lease its properties or assets as an entirety or
substantially as an entirety to another person, unless:
o the successor or purchaser is a corporation organized
under the laws of the United States, any state within the
United States or the District of Columbia;
o the successor or purchaser expressly assumes our
obligations under the Indenture and the Debt Securities;
and
o immediately after the transaction, no Event of Default,
and no event which, if notice was given and/or a certain
period of time passed, would become an Event of Default,
shall exist.
Except as described above, neither the Indenture nor the Debt
Securities contain "event risk" or similar provisions intended to protect
you if we become involved in a merger or other significant corporate
event.
EVENTS OF DEFAULT
Unless we tell you otherwise in an accompanying prospectus
supplement, the following shall constitute "Events of Default" under the
Indenture with respect to each series of Debt Securities:
o our failure for 30 days to pay any interest on any Debt
Security of such series when due;
o our failure to pay principal (or premium, if any) on any
Debt Security of such series when due, regardless of
whether such payment became due because of maturity,
redemption, acceleration or otherwise;
o our failure to perform any of our covenants with respect
to such Debt Securities for 60 days after we receive
notice of such failure;
o certain defaults with respect to our debt (other than the
Debt Securities or non-recourse debt) in an aggregate
principal amount in excess of $10,000,000 consisting of
the failure to make any payment at maturity or that
results in acceleration of the maturity of such debt; and
o certain events of bankruptcy, insolvency or reorganization
of Ambac, Ambac Assurance or any successor to the business
of Ambac Assurance which is also a subsidiary of Ambac.
We are required to file with the trustee each year a written
statement as to our compliance with certain of our obligations under the
Indenture.
REMEDIES
If an Event of Default resulting from the failure to pay
interest or principal (or premium, if any) on the Debt Securities of any
series exists, either the trustee or the holders of 25% in aggregate
principal amount of outstanding Debt Securities of such series may
declare the principal of all the outstanding Debt Securities of that
series and all accrued interest on those Debt Securities immediately due.
If one of the other Events of Default exists, either the trustee
or the holders of 25% in aggregate principal amount of the outstanding
Debt Securities of all existing series (voting together as one class) may
declare the principal of all the outstanding Debt Securities of all
series and all accrued interest on those Debt Securities immediately due.
Under certain conditions these declarations may be annulled and
defaults which have been cured may be waived by the holders of a majority
in aggregate principal amount of the outstanding Debt Securities of the
affected series (voting separately) or of all series (voting together as
one class), whichever was required to make the declaration in the first
place.
Before the principal of the Debt Securities of any series is
declared immediately due as described above, the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of the
affected series (voting separately) or of all series (voting together as
one class), depending on the nature of the Event of Default, may waive
any Event of Default other than an Event of Default:
o resulting from a failure to pay principal of (and premium,
if any) or interest on any of the Debt Securities or
o in respect of a provision of the Indenture which cannot be
modified without the consent of the holder of each Debt
Security affected by the modification.
If an Event of Default occurs, the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of each
series (voting separately) or of all series (voting together as one
class), depending on the nature of the proceeding, may direct the time,
method and place of conducting any proceeding for any remedy available to
the trustee, or exercising any trust or power conferred on the trustee.
However, unless the Indenture requires otherwise, the trustee is not
under any obligation to exercise any of its rights or powers under the
Indenture at the request or direction of holders of Debt Securities
unless such holders offer reasonable indemnity to the trustee.
DEFEASANCE AND COVENANT DEFEASANCE
We may, at our option, irrevocably deposit with the trustee
money and/or United States government obligations in an amount that would
be sufficient to pay the principal of (and premium, if any) and interest
on the Debt Securities of a series when each payment becomes due. If we
do so, we may then elect to be discharged from our obligations on the
Debt Securities of such series (other than certain continuing obligations
specified in the Indenture relating to the transfer of Debt Securities,
the replacement of temporary or mutilated, lost or stolen Debt Securities
and the place we maintain for payments on the Debt Securities) or to be
discharged from our obligations with respect to the Debt Securities of
such series under certain covenants.
Notwithstanding the deposit of funds and/or United States
government obligations described above, in order to effect defeasance or
covenant defeasance, the Indenture requires us to deliver to the trustee
an opinion of counsel that the contemplated defeasance or covenant
defeasance will not cause the holders of Debt Securities of the relevant
series to recognize income, gain or loss for Federal income tax purposes.
MODIFICATION AND WAIVER
Under the Indenture, Ambac and the trustee may supplement the
Indenture for certain purposes which would not materially adversely
affect the interests of the holders of Debt Securities of a series
without the consent of those holders. Ambac and the trustee may also
modify the Indenture or any supplemental indenture in a manner that
affects the interests or rights of the holders of Debt Securities with
the consent of the holders of at least a majority in principal amount of
the outstanding Debt Securities of all affected series (voting together
as one class). However, any modification which would (i) change the
maturity or reduce the principal amount of any Debt Securities, reduce
their interest rate or extend the time of interest payments, reduce any
amount payable upon redemption of such Debt Securities or impair or
affect the right of any holder of Debt Securities to institute suit for
payments on the Debt Securities or (ii) make certain changes to the
requirements for modification of the Indenture or any supplemental
indenture, requires the consent of each holder of Debt Securities that
would be affected by the modification. In addition, no supplemental
indenture may directly or indirectly modify the Indenture in any manner
which might alter the subordination of outstanding Subordinated Debt
Securities.
The Indenture permits the holders of at least a majority in
aggregate principal amount of the outstanding Debt Securities of all
series (voting together as one class) to waive our compliance with
certain covenants contained in the Indenture.
PAYMENT AND PAYING AGENTS
We will make payment of principal of, premium (if any) and
interest on Debt Securities at the place we designate. We may, at our
option, make payments of interest by check mailed to the address of the
person entitled to receive such interest payment according to the
register for the Debt Securities or by transfer to an account of such
person. Interest payments will be made to the person in whose name a Debt
Security is registered as of a certain number of days prior to the
relevant payment date. Although we may designate additional paying agents
or remove paying agents, we will at all times maintain a paying agent in
each place we designate for payment.
If the Debt Securities are represented by global certificates,
payments on them will be made to DTC (as defined in the next paragraph).
DENOMINATIONS, REGISTRATIONS AND TRANSFER
Unless we tell you otherwise in an accompanying prospectus
supplement, Debt Securities will be represented by one or more global
certificates registered in the name of a nominee for The Depository Trust
Company ("DTC"). In such case, each holder's beneficial interest in the
global securities will be shown on the records of DTC and transfers of
beneficial interests will only be effected through DTC's records.
A holder of Debt Securities may only exchange a beneficial
interest in a global security for certificated securities registered in
the holder's name if:
o DTC notifies us that it is unwilling or unable to continue
serving as the depositary for the relevant global
securities or DTC ceases to maintain certain
qualifications under the Securities Exchange Act and no
successor depositary has been appointed for 90 days;
o We determine, in our sole discretion, that the global
security shall be exchangeable; or
o an Event of Default has occurred and is continuing.
If Debt Securities are issued in certificated form, they will
only be issued in the minimum denomination specified in the accompanying
prospectus supplement and integral multiples of such denomination.
Transfers and exchanges of such Debt Securities will only be permitted in
such minimum denomination. Transfers of Debt Securities in certificated
form may be registered at the trustee's corporate office or at the
offices of any paying agent or trustee appointed by Ambac under the
Indenture. Exchanges of Debt Securities for an equal aggregate principal
amount of Debt Securities in different denominations may be also be made
at such locations.
GOVERNING LAW
The Indenture and Debt Securities will be governed by the laws
of New York.
OUR RELATIONSHIP WITH THE TRUSTEE
The trustee under the Indenture, The Chase Manhattan Bank,
occasionally acts as trustee in connection with obligations insured by
Ambac Assurance. We also have other business dealings with The Chase
Manhattan Bank and its affiliates in its capacity as a commercial bank.
PLAN OF DISTRIBUTION
We may sell Debt Securities (a) through underwriters or dealers;
(b) directly to one or more purchasers; or (c) through agents. The
relevant prospectus supplement will include the names of underwriters,
dealers or agents retained. The prospectus supplement also will include
the purchase price or prices of the Debt Securities, our proceeds from
the sale, any underwriting discounts or commissions and other items
constituting underwriters' compensation.
The underwriters will acquire the Debt Securities for their own
account. They may resell the Debt Securities in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The obligations of the
underwriters to purchase the securities will be subject to certain
conditions. The underwriters will be obligated to purchase all the
securities offered if they purchase any securities. Any initial public
offering price and any discounts or concessions allowed or re-allowed or
paid to dealers may be changed from time to time.
Underwriters, dealers, and agents that participate in the
distribution of the Debt Securities may be underwriters as defined in the
Securities Act of 1933 ("Securities Act"), and any discounts or
commissions received by them from Ambac and any profit on the resale of
the Debt Securities by them may be treated as underwriting discounts and
commissions under the Securities Act.
We may have agreements with the underwriters, dealers, and
agents to indemnify them against certain civil liabilities, including
liabilities under the Securities Act, or to contribute with respect to
payments which the underwriters, dealers or agents may be required to
make.
Any underwriter may engage in over-allotment, stabilizing
transactions, short covering transactions and penalty bids in accordance
with Regulation M under the Securities Exchange Act. Over-allotment
involves sales in excess of the offering size, which creates a short
position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum. Short covering transactions involve purchases of the securities
in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the securities originally sold by the
dealer are purchased in a covering transaction to cover short positions.
Those activities may cause the price of the securities to be higher than
it would otherwise be. If commenced, the underwriters may discontinue
those activities at any time.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, us or our subsidiaries in the ordinary
course of their businesses.
LEGAL OPINIONS
Richard B. Gross, who is Ambac's General Counsel, will issue an
opinion about the legality of the Debt Securities. Underwriters and
agents may have their own counsel.
EXPERTS
The consolidated financial statements of Ambac Financial Group,
Inc. as of December 31, 1996 and 1995, and for each of the years in the
three-year period ended December 31, 1996 have been incorporated herein
and in the registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. To the extent that KPMG Peat Marwick LLP audits
and reports on financial statements of Ambac Financial Group, Inc. issued
at future dates, and consents to the use of their report thereon, such
financial statements also will be incorporated by reference in the
registration statement in reliance upon their report and said authority.
YOU SHOULD RELY ONLY ON THE INFORMATION $ 250,000,000
CONTAINED IN OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT. WE HAVE AUTHORIZED Debt Securities of
NO ONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. WE ARE NOT MAKING AN OFFER OF
THESE SECURITIES IN ANY STATE WHERE THE OFFER IS
NOT PERMITTED. Ambac Financial
Group, Inc.
YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER
THAN THE DATE ON THE FRONT OF THE DOCUMENT.
-----------------------
TABLE OF CONTENTS _______________
PAGE
PROSPECTUS
Where You Can Find Additional Information......4
Ambac Financial Group, Inc.....................6
Use of Proceeds................................7 _______________
Ratio of Earnings to Fixed Charges.............7
Description of the Debt Securities.............8
Plan of Distribution..........................17
Legal Opinions................................18 [DATE]
Experts.......................................18
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and
distribution of the securities being registered, other than underwriting
compensation, are:
Filing Fee for Registration Statement (actual)......$73,750
Legal Fees and Expenses.............................75,000
Accounting Fees and Expenses........................20,000
Printing and Engraving Fees.........................50,000
Trustee's Fees and Expenses.........................10,000
Miscellaneous....................................... 5,000
Total..............................................$233,750
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 145 of the General Corporation Law of the
State of Delaware, each director and officer of Ambac may be indemnified
by Ambac against expenses (including attorney's fees, judgments, fines
and amounts paid in settlement) actually and reasonably incurred in
connection with the defense or settlement of any threatened, pending or
completed legal proceedings in which he is involved by reason of the fact
that he is or was a director or officer of Ambac if he acted in good
faith and in manner that he reasonably believed to be in or not opposed
to the best interests of Ambac and, with respect to any criminal action
or proceeding, if he had no reasonable cause to believe that his conduct
was unlawful. In addition, Article VII of the Amended and Restated
Certificate of Incorporation of Ambac and Article IX of its By-laws
authorize Ambac to indemnify any person entitled to be indemnified under
law. If the legal proceeding, however, is by or in the right of Ambac,
the director or officer may not be indemnified in respect of any claim,
issue or matter as to which he shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to Ambac unless a
court determines otherwise.
In addition, Ambac maintains a Directors' and Officers' liability
insurance policy.
Article VI of the Amended and Restated Certificate of Incorporation
of Ambac provides that, to the fullest extent permitted by law, no
director of Ambac will be personally liable for monetary damages to Ambac
or its stockholders for any breach of fiduciary duty as a director.
ITEM 16. EXHIBITS.
Exhibit
No. Description
1.01 Form of Underwriting Agreement.*
4.01 Indenture dated as of August 1, 1991, between the
Company and The Chase Manhattan Bank, N.A., as Trustee
(incorporated herein by reference to the Registration
Statement of the Registrant on Form S-3 (File No.
33-59290) filed with the Commission on March 9, 1993).
5.01 Opinion of Richard B. Gross, Esq. regarding the
legality of the securities being registered.
12.01 Statement regarding computation of ratios of earning to
fixed charges.
23.01 Consent of KPMG Peat Marwick LLP.
23.02 Consent of Richard B. Gross, Esq. (included in opinion
filed as Exhibit 5.01).
24 Powers of Attorney of certain officers and directors of
Ambac Financial Group, Inc. (included on signature
page).
25.01 Statement of Eligibility on Form T-1 of The Chase
Manhattan Bank, Trustee under the Indenture
(incorporated herein by reference to the Registration
Statement of the Registrant on Form S-3 (File No.
33-59290) filed with the Commission on March 9, 1993).
- ----------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act"); (ii) to
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement (notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement); and (iii) to include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement.
Provided, however, that (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those items is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission (the "Commission")
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that
are incorporated by reference to this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby further undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.
(2) For purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by the controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Ambac Financial Group, Inc. certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed below
on its behalf by the undersigned, thereunto duly authorized, in The
City of New York and State of New York, on the 2d day of January,
1998.
Ambac Financial Group, Inc.
By: /s/ RICHARD B. GROSS
Richard B. Gross, Senior
Vice President, General Counsel
and Secretary
KNOW ALL MEN BY THESE PRESENTS that each person whose signature
to this Registration Statement appears below hereby constitutes and
appoints each Richard B. Gross and Frank J. Bivona, as such person's
true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for such person and in such person's
name, place and stead, in any and all capacities, to sign any and all
amendments to the Registration Statement, including post-effective
amendments, and registration statements filed pursuant to Rule 462
under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, and does hereby grant unto
each said attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes
as such person might or could do in person, hereby ratifying and
confirming all that each said attorney-in-fact and agent, or any
substitute therefor, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities indicated on the 2d day of January, 1998.
Signature Title
/s/ PHILLIP B. LASSITER Chairman, President, Chief Executive
________________________________ Officer and Director (Principal
Phillip B. Lassiter Executive Officer)
/s/ FRANK J. BIVONA Senior Vice President, Chief Financial
________________________________ Officer and Treasurer (Principal
Frank J. Bivona Financial and Accounting Officer)
/s/ MICHAEL A. CALLEN Director
________________________________
Michael A. Callen
/s/ RENSO L. CAPORALI Director
_________________________________
Renso L. Caporali
/s/ RICHARD DULUDE Director
_________________________________
Richard Dulude
/s/ W. GRANT GREGORY Director
_________________________________
W. Grant Gregory
/s/ C. RODERICK O'NEIL Director
_________________________________
C. Roderick O'Neil
EXHIBIT INDEX
ITEM 16. EXHIBITS.
Exhibit
No. Description
1.01 Form of Underwriting Agreement.**
4.01 Indenture dated as of August 1, 1991, between the
Company and The Chase Manhattan Bank, N.A., as Trustee
(incorporated herein by reference to the Registration
Statement of the Registrant on Form S-3 (File No.
33-59290) filed with the Commission on March 9, 1993).
5.01 Opinion of Richard B. Gross, Esq. regarding the
legality of the securities being registered.
12.01 Statement regarding computation of ratios of earning to
fixed charges.
23.01 Consent of KPMG Peat Marwick LLP.
23.02 Consent of Richard B. Gross, Esq. (included in opinion
filed as Exhibit 5.01).
24 Powers of Attorney of certain officers and directors of
Ambac Financial Group, Inc. (included on signature
page).
25.01 Statement of Eligibility on Form T-1 of The Chase
Manhattan Bank, Trustee under the Indenture
(incorporated herein by reference to the Registration
Statement of the Registrant on Form S-3 (File No.
33-59290) filed with the Commission on March 9, 1993).
- ---------------
** To be filed by amendment.
Exhibit 5.01
January 2, 1998
The Board of Directors
Ambac Financial Group, Inc.
One State Street Plaza
New York, NY 10004
Re: Ambac Financial Group, Inc.
Registration Statement on Form S-3
Dear Sirs:
I am the duly elected Senior Vice President, General Counsel
and Secretary of Ambac Financial Group, Inc., a corporation organized
under the laws of the State of Delaware (the "Company"), and have
acted as its counsel in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") to
be filed by the Company with the Securities and Exchange Commission
(the "Commission") on or about January 2, 1998 under the Securities
Act of 1933, as amended (the "Act"). The Registration Statement
relates to the issuance and sale from time to time pursuant to Rule
415 of the General Rules and Regulations promulgated under the Act, of
unsecured senior or subordinated debt securities (the "Debt
Securities") of the Company in an aggregate initial offering price of
up to $250,000,000. The Debt Securities are to be issued pursuant to
an Indenture, dated as of August 1, 1991 (such indenture, as it may be
supplemented from time to time in accordance with the terms thereof,
the "Indenture"), between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee").
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
Capitalized terms used but not otherwise defined herein have the
meanings ascribed to them in the Registration Statement.
In connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of (i)
the Registration Statement; (ii) a copy of the Indenture; (iii) the
Amended and Restated Certificate of Incorporation of the Company (the
"Certificate of Incorporation"); (iv) the By-Laws of the Company, as
currently in effect (the "ByLaws"); and (v) resolutions of the Board
of Directors of the Company, dated October 29, 1997. I have also
examined originals or copies, certified or otherwise identified to my
satisfaction, of such other documents, certificates and records as I
have deemed necessary or appropriate as a basis for the opinions set
forth herein.
In my examination, I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity
of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such
copies. In making my examination of documents executed or to be
executed by parties other than the Company, I have assumed that such
parties had or will have the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and
execution and delivery by such parties of such documents and that such
documents constitute valid and binding obligations of such parties. In
addition, I have assumed that the terms of the Debt Securities will
have been established so as not to violate any applicable law, the
Certificate of Incorporation or By-Laws of the Company or result in a
default under or breach of any agreement or instrument binding upon
the Company and so as to comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the
Company. As to any facts material to the opinions expressed herein
which were not independently established or verified, I have relied
upon oral or written statements and representations of other officers
of the Company and others.
I am admitted to the Bar of the State of New York and express
no opinion as to the laws of any other jurisdiction other than the
General Corporation Law of the State of Delaware and the federal
securities laws of the United States of America.
Based on and subject to the foregoing and to the other
qualifications and limitations set forth herein, I am of the opinion
that:
1. The Company is a corporation duly organized and validly
existing pursuant to the laws of the State of Delaware.
2. With respect to any series of Debt Securities, when (i)
the Registration Statement, as finally amended (including all
necessary post-effective amendments), has become effective under
the Act; (ii) an appropriate prospectus supplement with respect
to the Debt Securities has been prepared, delivered and filed in
compliance with the Act and the applicable rules and regulations
thereunder; (iii) the Board of Directors, including any
appropriate committee appointed thereby, and appropriate
officers of the Company have taken all necessary corporate
action to approve the issuance and terms of the Debt Securities
and related matters; (iv) the terms of the Debt Securities have
been established in conformity with the Indenture; (v) the Debt
Securities are duly executed, delivered, authenticated and
issued in accordance with the Indenture and delivered and paid
for in the manner contemplated in the Registration Statement or
any prospectus supplement relating thereto; and (vi) if the Debt
Securities are to be sold pursuant to a firm commitment
underwritten offering, the underwriting agreement with respect
to the Debt Securities has been duly authorized, executed and
delivered by the parties thereto, the Debt Securities will be
valid and binding obligations of the Company, entitled to the
benefits of the Indenture.
I hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. I also hereby
consent to the use of my name under the heading "Legal Opinions" in
the prospectus which forms a part of the Registration Statement. In
giving this consent, I do not thereby admit that I am within the
category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission promulgated
thereunder. This opinion is expressed as of the date hereof, and I
disclaim any undertaking to advise you of any subsequent changes in
the facts stated or assumed herein or of any subsequent changes in
applicable law.
Very truly yours,
/s/ RICHARD B. GROSS
Richard B. Gross, Esq.
Senior Vice President,
General Counsel and Secretary,
Ambac Financial Group, Inc.
Exhibit 12.01
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YTD 9/30
1992 1993 1994 1995 1996 1997
______________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Pre-tax earnings 170,733 247,355 179,919 214,174 375,506 209,869
Interest expense 14,241 15,782 18,786 20,934 20,925 15,935
Lease expense 3,099 2,874 2,718 2,955 3,862 3,123
1/3 lease expense 1,033 958 906 985 1,287 1,041
Ratio 12.18x 15.78x 10.14x 10.77x 17.91x 13.36x
</TABLE>
Note: For purposes of calculating the ratio of earnings to fixed
charges, (i) earnings consists of income before income taxes
and extraordinary items plus fixed charges and (ii) fixed
charges consists of interest expense incurred, capitalized
interest, amortization of debt expense and one-third of
rental payments under operating leases (an amount estimated
to be the interest component of such rentals).
Exhibit 23.01
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Ambac Financial Group, Inc.:
We consent to the use of our reports incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the
prospectus.
KPMG Peat Marwick LLP
New York, New York
December 31, 1997
