AMBC Ambac Financial Group Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Schedule 14A Information

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

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Ambac Financial Group, Inc.

(Name of Registrant as Specified In Its Charter)

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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED AUGUST 2, 2024

One World Trade Center

New York, NY 10007

    , 2024

Dear Stockholder:

You are cordially invited to attend a special meeting (the “special meeting”) of the stockholders of Ambac Financial Group, Inc., a Delaware corporation (“Ambac,” “we,” “us” or “our”), to be held on     , 2024 at     , Eastern time, or at such other time, on such other date and at such other place to which the special meeting may be adjourned. Stockholders will be able to attend the special meeting and examine the list of stockholders entitled to vote at the special meeting during the special meeting virtually by visiting www.virtualshareholdermeeting.com/AMBC2024SM.

On June 4, 2024, Ambac entered into a stock purchase agreement with American Acorn Corporation (“Buyer”), a Delaware corporation owned by funds managed by Oaktree Capital Management, L.P. (“Oaktree”) (as it may be amended from time to time in accordance with its terms, the “Purchase Agreement”), pursuant to which Ambac has agreed to sell to Buyer all of the issued and outstanding shares of common stock, par value $2.50 per share, of Ambac Assurance Corporation, a Wisconsin stock insurance company and wholly-owned subsidiary of Ambac (“AAC”), for aggregate consideration of $420,000,000 in cash, subject to certain adjustments as more fully described in the accompanying proxy statement (the “Sale”). We are seeking the approval of the Sale Proposal (as defined below) by our stockholders in accordance with Section 271 of the General Corporation Law of the State of Delaware (“DGCL”) on the basis that the Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of that statute and related case law. The board of directors of Ambac has unanimously approved the Sale and the other transactions and agreements contemplated by the Purchase Agreement, which are more fully described in the accompanying proxy statement, and recommended that its stockholders approve the Sale.

We are soliciting proxies for use at the special meeting, at which Ambac’s stockholders will be asked to consider and vote upon proposals (1) to approve the Sale of AAC, as such Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of Section 271 of the DGCL and related case law (which we refer to as the “Sale Proposal”), (2) to approve, on an advisory (non-binding) basis, the compensation that may, under certain circumstances, be paid or provided by Ambac to its named executive officers in connection with the Sale and other transactions contemplated by the Purchase Agreement (which we refer to as the “Compensation Proposal”) and (3) to adjourn the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Sale Proposal (which we refer to as the “Adjournment Proposal”).

After careful consideration, our Board of Directors unanimously recommends that you vote “FOR” each of the Sale Proposal, the Compensation Proposal and the Adjournment Proposal.

Your vote is very important. The approval of the Sale Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of common stock, par value $0.01 per share, of Ambac (“Ambac Common Stock”) entitled to vote thereon at the special meeting, voting together as a single class in person or by proxy (which we refer to as the “Required Stockholder Approval”). The approval of the Compensation Proposal requires that votes cast in favor of the proposal by stockholders present in person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting. The

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approval of the Compensation Proposal is advisory, and neither the Required Stockholder Approval nor the Sale is conditioned on approval of the Compensation Proposal. The approval of the Adjournment Proposal requires that votes cast in favor of the proposal by stockholders present in person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting. The closing of the Sale as contemplated by the Purchase Agreement is conditioned upon Ambac obtaining the Required Stockholder Approval at the special meeting. Whether or not you plan to attend the special meeting, please vote your shares through the Internet, by telephone or by signing and returning the enclosed proxy card as soon as possible to ensure that your shares are represented at the special meeting.

The accompanying proxy statement describes the Purchase Agreement, a copy of which is attached thereto as Annex A, and the proposed Sale as contemplated thereby, and contains other important information about the special meeting, the matters to be voted on and how to cast your vote. We encourage you to read the entire proxy statement and the Purchase Agreement carefully. You may also obtain more information about Ambac from the annual, quarterly and current event reports, proxy statements and other information that we file with the U.S. Securities and Exchange Commission.

We thank you for your interest in Ambac.

Sincerely,

This proxy statement is dated     , 2024 and is first being mailed to stockholders on or about     , 2024.

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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED AUGUST 2, 2024

One World Trade Center

New York, NY 10007

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD     , 2024

A special meeting of the stockholders of Ambac Financial Group, Inc. (“Ambac,” “we,” “us” or “our”) will be held on     , 2024 at     , Eastern time, virtually at www.virtualshareholdermeeting.com/AMBC2024SM, or at such other time, on such other date and at such other place to which the special meeting (the “special meeting”) may be adjourned, for the purpose of considering and voting on the following proposals:

After careful consideration, our Board of Directors has unanimously determined that the Sale and the other transactions contemplated by the Purchase Agreement are advisable, fair to and in the best interests of Ambac and its stockholders, has authorized, adopted and approved the Purchase Agreement and the Sale as contemplated thereby, and unanimously recommends that you vote “FOR” the approval of the Sale Proposal, “FOR” the approval of the Compensation Proposal and “FOR” the approval of the Adjournment Proposal.

Only holders of record of shares of the common stock, par value $0.01 per share, of Ambac (“Ambac Common Stock”), at the close of business on     , 2024, which is the record date for the special meeting, are entitled to notice of and to vote at the special meeting and any postponements or adjournments thereof. There are 45,224,972 shares of Ambac Common Stock outstanding and entitled to vote as of the record date.

Your vote is very important. We are seeking the approval of the Sale Proposal by our stockholders in accordance with Section 271 of the DGCL on the basis that the Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of that statute and related case law. The approval of the Sale Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Ambac Common Stock and entitled to vote thereon at the special meeting, voting together as a single class in person or by proxy (which we refer to as the “Required Stockholder Approval”). The Compensation Proposal is advisory and approval of the Compensation Proposal requires that votes cast in favor of the proposal by stockholders present in

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person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting. The approval of the Adjournment Proposal requires that votes cast in favor of the proposal by stockholders present in person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting. The closing of the Sale as contemplated by the Purchase Agreement is conditioned upon Ambac obtaining the Required Stockholder Approval at the special meeting.

All of our stockholders are cordially invited to attend the special meeting. Whether or not you expect to attend the special meeting, we request that you vote your shares through the Internet or by telephone as instructed in these materials or complete, date, sign and return the enclosed proxy card in the postage-paid envelope as soon as possible to ensure that your shares will be represented at the special meeting. If you sign, date and return your proxy card without indicating how you wish to vote, all of your shares will be voted “FOR” the Sale Proposal, the Compensation Proposal and the Adjournment Proposal. If you hold shares of Ambac Common Stock in “street name” through an account with a broker, dealer, bank or other nominee, please follow the instructions you receive from them to vote your shares. If you fail to return your proxy card or vote your shares through the Internet or by telephone, or if you hold your shares in “street name” and you fail to instruct your bank, broker or other nominee how to vote, and do not vote in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as an “AGAINST” vote with respect to the Sale Proposal, but will have no effect on the approval of the Compensation Proposal and the Adjournment Proposal. If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

The accompanying proxy statement describes the Purchase Agreement and the proposed Sale as contemplated thereby, and contains other important information about the special meeting, the matters to be voted on and how to cast your vote. A copy of the Purchase Agreement is attached as Annex A to the accompanying proxy statement. We encourage you to read the entire proxy statement and the Purchase Agreement carefully.

By Order of the Board of Directors,

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TABLE OF CONTENTS

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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED AUGUST 2, 2024

Ambac Financial Group, Inc.

One World Trade Center

New York, NY 10007

PROXY STATEMENT

This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors (the “Ambac Board”) for use at the special meeting (the “special meeting”) of the stockholders of Ambac Financial Group, Inc. (“Ambac,” “we,” “us” or “our”), which will be held on     , 2024 at    , Eastern time, virtually at www.virtualshareholdermeeting.com/AMBC2024SM, or at such other time, on such other date and at such other place to which the special meeting may be adjourned.

YOUR VOTE IS IMPORTANT. It is important that your shares be represented at the special meeting, regardless of the number of shares that you hold. You are, therefore, urged to execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.

SUMMARY

This summary highlights selected information from this proxy statement. It may not contain all of the information that is important to you with respect to the Purchase Agreement (as defined below) and the Sale (as defined below) of Ambac Assurance Corporation, a Wisconsin stock insurance company and wholly-owned subsidiary of Ambac (“AAC”), as contemplated thereby, or any other matter described in this proxy statement. We urge you to carefully read this entire proxy statement, as well as the documents attached to, referred to or incorporated by reference into this proxy statement, to fully understand the Sale Proposal. In particular, you should read the Purchase Agreement, which is described elsewhere in this proxy statement and is attached hereto as Annex A. Additional information regarding Ambac is included in the documents incorporated by reference into this proxy statement and the other documents we file with the U.S. Securities and Exchange Commission (the “SEC”). See the section of this proxy statement entitled “Where You Can Find Additional Information” beginning on page 101.

General Description of the Sale (page 29)

On June 4, 2024, Ambac entered into a stock purchase agreement with American Acorn Corporation (“Buyer”), a Delaware corporation owned by funds managed by Oaktree Capital Management, L.P. (“Oaktree”) (as it may be amended from time to time in accordance with its terms, the “Purchase Agreement”), pursuant to which Ambac has agreed to sell to Buyer all of the issued and outstanding shares of common stock, par value $2.50 per share, of Ambac Assurance Corporation, a Wisconsin stock insurance company and wholly-owned subsidiary of Ambac, for aggregate consideration of $420,000,000 in cash (the “Consideration”), subject to certain adjustments as more fully described below (the “Sale” and all of the transactions contemplated by the Purchase Agreement, as more fully described in this proxy statement, collectively, the “Transactions”). We are seeking the approval of the Sale Proposal (as defined below) by our stockholders in accordance with Section 271 of the General Corporation Law of the State of Delaware (the “DGCL”) on the basis that the Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of that statute and related case law. The Ambac Board has unanimously approved the Sale and the Transactions, and recommended that Ambac stockholders vote in favor of the Sale. The terms of the Sale as contemplated by the Purchase Agreement provide that, at the closing of the Sale (the “Closing”), Buyer will acquire complete common equity ownership of AAC and its wholly owned subsidiary Ambac Assurance UK Limited (“Ambac UK”).

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We are seeking the approval of the Sale Proposal by our stockholders in accordance with Section 271 of the DGCL on the basis that the Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of that statute and related case law. The Closing is conditioned on, among other things, Ambac obtaining the approval of the Sale pursuant to the Purchase Agreement by the affirmative vote of the holders of a majority of the outstanding shares of common stock, par value $0.01 per share, of Ambac (“Ambac Common Stock”) entitled to vote thereon at the special meeting, voting together as a single class in person or by proxy (which we refer to in this proxy statement as the “Required Stockholder Approval”). We expect the Closing of the Sale to occur on the date that is the last business day of the calendar month during which the last of the conditions to Closing (including receipt of the Required Stockholder Approval in favor of the Sale Proposal at the special meeting) have been satisfied or waived (such date, the “Closing Date”).

Following the completion of the Sale, Ambac will continue to operate its specialty property and casualty insurance business and its insurance distribution businesses (the “Retained Business”). For additional information, see the sections of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement” beginning on page 60 and “Proposal No. 1—The Sale Proposal—Activities of Ambac Following the Sale” beginning on page 53.

Parties to the Purchase Agreement (page 29)

Ambac

Ambac Financial Group, Inc., headquartered in New York City, is a financial services holding company incorporated in the State of Delaware on April 29, 1991. Ambac currently operates three principal businesses:

On August 1, 2024, Ambac completed its previously announced acquisition of Beat Capital Partners Limited (“Beat”) pursuant to a share purchase agreement, by and among Ambac, Cirrata V LLC, a Delaware limited liability company and an indirect wholly-owned subsidiary of Ambac (“Cirrata V LLC”), certain sellers set forth therein (the “Beat Sellers”) and Beat, effective July 31, 2024, pursuant to which, and upon the terms and conditions set forth therein, Ambac purchased from the Beat Sellers approximately 60% of the entire issued share capital of Beat, for fixed consideration of approximately $286.7 million, of which approximately $248.6 million was paid in cash and the remainder of which was satisfied through the issuance of 2,216,023 shares of Ambac Common Stock (the “Beat Transaction”). The cash portion of the consideration was funded by the Acquisition Funding (as defined below) and cash on hand at Ambac. The “Acquisition Funding” means $150 million to be drawn under the term loan facility pursuant to the credit agreement entered into on August 1, 2024, by and among Ambac, Cirrata V LLC, Cirrata Group, LLC, a Delaware limited liability company and wholly owned subsidiary of Ambac and Cirrata V UK Limited, a limited liability company incorporated under the laws of England and Wales, the lenders from time to time party thereto and UBS AG, Stamford Branch, as administrative agent, and the approximately $65,000,000 co-investment made by AAC in the equity of Cirrata V LLC.

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Additional information regarding Ambac is contained in the documents incorporated by reference into this proxy statement and the other documents that we file with the SEC. See the section of this proxy statement entitled “Where You Can Find Additional Information” beginning on page 101.

Oaktree

Buyer is owned by funds managed by Oaktree. Oaktree is a leader among global investment managers specializing in alternative investments, with $192 billion in assets under management as of March 31, 2024. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. Oaktree has over 1,200 employees and offices in 23 cities worldwide. Oaktree’s headquarter is located at 333 South Grand Ave., 28th Floor, Los Angeles, CA 90071. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.

Recommendation of the Ambac Board and Its Reasons for the Sale (page 44)

The Ambac Board considered a number of factors before determining to enter into the Purchase Agreement, including, among other things, the purchase price to be paid by Buyer for AAC, the terms and conditions of the Purchase Agreement, the Sale and the other Transactions contemplated thereby, the financial condition of Ambac, the strategic and financial benefits to Ambac that are expected to result from the Sale and the prospects for the Retained Business.

After taking into account all of the material factors relating to the Purchase Agreement and the Sale, the Ambac Board has unanimously determined that the Sale as contemplated by the Purchase Agreement, and the other Transactions contemplated thereby, are advisable, fair to and in the best interests of Ambac and its stockholders, has authorized, adopted and approved the Purchase Agreement and the Sale as contemplated thereby and unanimously recommends that you vote:

The Sale Proposal, the Compensation Proposal and the Adjournment Proposal are collectively referred to herein as the “Proposals.”

For a description of the factors considered by the Ambac Board in determining to recommend approval of the Sale Proposal, see the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Recommendation of the Ambac Board and Its Reasons for the Sale” beginning on page 44.

Opinion of Ambac’s Financial Advisor

At the meeting of the Ambac Board on June 3, 2024, to evaluate and approve the Transactions contemplated by the Purchase Agreement, Moelis & Company LLC (“Moelis”) delivered an oral opinion, which was confirmed by delivery of a written opinion, dated June 3, 2024, addressed to the Ambac Board to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in the opinion, the Consideration to be received in the Sale by Ambac was fair, from a financial point of view, to Ambac. With the approval of the Ambac Board, in evaluating such fairness, Moelis treated the Sale and the issuance of the Warrant as a single integrated transaction.

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The full text of Moelis’s written opinion dated June 3, 2024, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement and is incorporated herein by reference. Moelis’s opinion was provided for the use and benefit of the Ambac Board (in its capacity as such) in its evaluation of the Transactions. Moelis’s opinion was limited solely to the fairness, from a financial point of view, to Ambac of the Consideration to be received by Ambac in the Sale, and does not address Ambac’s underlying business decision to engage in the transactions contemplated by the Purchase Agreement or the

relative merits thereof as compared to any alternative business strategies or transactions that might be available with respect to Ambac or AAC. Moelis’s opinion does not constitute a recommendation to any stockholder of Ambac as to how such stockholder should vote or act with respect to the transactions contemplated by the Purchase Agreement or any other matter. Moelis’s opinion was approved by a Moelis fairness opinion committee.

For a description of the opinion of Ambac’s financial advisor, see the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Opinion of Ambac’s Financial Advisor” beginning on page 47, and the full text of the opinion is attached as Annex B to this proxy statement.

Use of Proceeds (page 46)

Following receipt of the Required Stockholder Approval in favor of the Sale Proposal at the special meeting, and subject to the satisfaction of the other conditions to Closing under the Purchase Agreement, the Sale of AAC is expected to close during the fourth quarter of 2024 or the first quarter of 2025. Ambac intends to utilize the proceeds from the Sale (i) to repay all or a portion of the Acquisition Funding, (ii) to pay costs and expenses related to the Sale, (iii) to implement a share repurchase program, in an amount of up to $50 million, to be initiated in the first three months following the Closing, depending on market conditions (the “Share Repurchase Program”) and (iv) for general corporate purposes, including without limitation, acquisitions consistent with Ambac’s Specialty Property and Casualty Insurance and Insurance Distribution strategies, which remain our primary source of value creation. Following the execution of the Share Repurchase Program, we will evaluate authorizing additional capital return activities measured against other capital deployment opportunities and based on market conditions.

Ambac’s stockholders may indirectly receive proceeds pursuant to the Share Repurchase Program, however, they will not directly receive any proceeds from the Sale. For a description of the use of proceeds from the Sale and how such proceeds will be utilized, see the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Use of Proceeds” beginning on page 46 and “Risk Factors—Ambac will receive all proceeds from the Sale” beginning on page 22.

Activities of Ambac Following the Sale (page 53)

We are committed to maximizing long-term shareholder value through prudent capital management. As a growth company in specialty property and casualty insurance, we continue to seek to build value through acquisitions and development of de novo businesses. When considering new opportunities, we evaluate the expected long-term value creation associated with the deployment of capital in new businesses compared to the return of capital to our shareholders.

Following the completion of the Sale, Ambac will continue to operate the Retained Business. Ambac’s primary goal is to maximize long-term stockholder value through the execution of targeted strategies for the Retained Business. Specialty Property and Casualty Insurance and Insurance Distribution strategic priorities include:

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Ambac will continue to be a public company operating under the name Ambac Financial Group, Inc., and will continue to own the assets and liabilities that comprise the Retained Business. At this time, it is contemplated that, immediately following Closing, Ambac will maintain the same corporate functions and the same senior executives as Ambac had prior to the completion of the Sale, other than David Barranco, Senior Managing Director and Head of Risk Management and Robert Eisman, Senior Managing Director and Chief Accounting Officer and Controller, who are expected to transfer with AAC to Buyer, and the same board of directors that is in place following the conclusion of Ambac’s 2024 Annual Meeting of Stockholders. As of immediately following the Closing, all of Ambac’s revenues will be generated by the Retained Business. For additional information, see the sections of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Activities of Ambac Following the Sale” beginning on page 53 and “Preliminary Unaudited Pro Forma Combined Financial Information” beginning on page 74.

Conditions to Closing of the Sale (page 55)

The closing of the Sale and the other Transactions is subject to customary closing conditions, including the receipt of specified regulatory approvals and the Required Stockholder Approval. For additional information, see the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Conditions to Closing of the Sale” beginning on page 55.

Interests of Ambac’s Directors and Executive Officers in the Sale (page 55)

In considering the recommendation of the Ambac Board with respect to the Sale, Ambac stockholders should be aware that Ambac’s directors and executive officers have interests in the Sale, including financial interests, that may be different from, or in addition to, interests of the Ambac stockholders generally, including interests that could vary among our executive officers. The Ambac Board was aware of and considered these interests during its deliberations of the merits of the Sale and in determining to recommend to Ambac stockholders that they vote for the Sale Proposal and thereby approve the transactions contemplated by the Sale (to the extent such interests existed at that time).

These interests potentially include, among others:

See the sections of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Interests of Ambac’s Directors and Executive Officers in the Sale” beginning on page 55 and “Proposal No. 2—The Compensation Proposal” beginning on page 92 for additional information.

Regulatory Approvals (page 58)

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), Ambac and Buyer cannot consummate the Sale until Ambac and Buyer have notified the Department of Justice’s Antitrust

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Division and the Federal Trade Commission of the Sale and furnished them with certain information and material relating to the Sale, and the applicable waiting period has terminated or expired. On June 25, 2024, Ambac and Buyer each individually filed pre-merger notifications and report forms (with respect to the Sale) to the Federal Trade Commission and Department of Justice. The applicable waiting period expired on July 26, 2024, at 11:59 p.m.

The Sale is also conditioned on the receipt of required regulatory approvals from (or notification to, as applicable) regulatory authorities including, but not limited to, (i) approval by the Wisconsin Office of the Commissioner of Insurance (“OCI”) of the Form A filing, which was submitted by Buyer to OCI on June 28, 2024; (ii) any applicable state insurance departments to which pre-acquisition notifications on Form E or similar market share notification forms or exemptions need to be filed; and (iii) approval by the U.K. Prudential Regulation Authority (the “PRA”) of the notification under s178 under the U.K. Financial Services and Markets Act 2000, as amended (the “FSMA”), which was filed with the PRA on June 28, 2024.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Regulatory Approvals” beginning on page 58 for additional information.

Material U.S. Federal Income Tax Consequences of the Sale (page 58)

For U.S. federal income tax purposes, the proposed Sale will be treated as a taxable sale of shares by Ambac. A portion of the cash received by Ambac will be allocable to the issuance of the Warrant (as defined below). Ambac does not expect to derive taxable income or loss as a result of the issuance of the Warrant.

The proposed Sale is entirely a corporate action undertaken by Ambac. Our stockholders will not realize any taxable gain or loss on their shares of Ambac Common Stock for U.S. federal income tax purposes as a result of the Sale, as our stockholders will not receive any direct proceeds from the Sale. We do not anticipate that the Sale or the other Transactions contemplated by the Purchase Agreement will result in any U.S. federal income tax consequences to our stockholders.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Material U.S. Federal Income Tax Consequences of the Sale” beginning on page 58 for additional information.

Warrant (page 54)

In connection with and pursuant to the Purchase Agreement, at the Closing of the Sale, Ambac has agreed to issue to Buyer or an Affiliate of the Buyer (as defined in the Purchase Agreement) (“Investor”) a warrant (the “Warrant”) exercisable for Ambac Common Stock representing 9.9% of the fully diluted shares of Ambac Common Stock as of March 31, 2024, pro forma for the issuance of the Warrant (the “Warrant Shares”). The Warrant will have an exercise price per share of $18.50 with a six-and-a-half-year term from the date of issuance, and will be immediately exercisable. Payment of the exercise price may be settled, at Ambac’s option, by way of a cash exercise or by net share settlement. The Warrant and the Warrant Shares will be issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and will not be registered under the Securities Act or any state Securities law. Under the terms of the Warrant, the Investor is subject to a lock-up period of six months from the date of issuance of the Warrant, subject to limited exceptions.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Warrant” beginning on page 54 for additional information.

Investor Rights Agreement (page 54)

In connection with and pursuant to the Purchase Agreement, at the Closing of the Sale, Ambac will enter into an investor rights agreement (the “Investor Rights Agreement”), by and between Ambac and Investor. The

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Investor Rights Agreement provides for, among other things, (i) the grant to Investor of the right to designate one director to the Ambac Board, at any time following the date on which Investor has exercised the Warrant for more than 50% of the maximum number of Warrant Shares issuable pursuant to the Warrant, and the Investor, together with its affiliates, beneficially owns at least 4% of the Ambac Common Stock, and until the date upon which Investor no longer beneficially owns at least 50% of the maximum number of Warrant Shares issuable pursuant to the Warrant, or the Investor, together with its affiliates, beneficially owns less than 3% of the outstanding Ambac Common Stock (each, a “Fallaway Event”), (ii) the grant of limited shelf registration rights related to the Warrant Shares, unless the Investor owns less than 25% of the Warrants and the Warrant Shares or, after a Fallaway Event, the Warrant Shares are eligible to be sold by Investor pursuant to Rule 144 under the Securities Act, without limitation as to volume or manner of sale and piggyback registration rights, (iii) a standstill restriction on Investor that prohibits certain actions by Investor without the prior written approval of Ambac and (iv) confidentiality and indemnification obligations.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Investor Rights Agreement” beginning on page 54 for additional information.

Non-Solicitation (page 68)

Subject to certain exceptions, including compliance with the fiduciary duties of the Ambac Board, Ambac has agreed not to solicit a Company Acquisition Proposal (as defined in the Purchase Agreement and described further on page 69), participate in any negotiations with any third party regarding a Company Acquisition Proposal or enter into any agreement providing for a Company Acquisition Proposal.

Notwithstanding the foregoing, the Purchase Agreement also provides that, if prior to, but not after, receipt of the Required Stockholder Approval Ambac receives a Company Acquisition Proposal from a third party and the Ambac Board determines in good faith that a Company Acquisition Proposal is, or would reasonably be expected to lead to, a Superior Proposal (as defined in the Purchase Agreement and described on page 70), Ambac may provide certain information to, and engage in negotiations and discussions with, such person making the Company Acquisition Proposal.

If Ambac has received a bona fide written Company Acquisition Proposal prior to obtaining the Required Stockholder Approval that has not been withdrawn, and that the Ambac Board has concluded in good faith (after consultation with its financial advisor and outside legal counsel) is a Superior Proposal that did not result from a breach of the non-solicitation covenant, the Ambac Board may effect an Ambac Board Recommendation Change with respect to such Superior Proposal; provided, however, that the Ambac Board cannot take such action unless the Ambac Board determined in good faith (after consultation with its financial advisor and outside legal counsel) that the failure to do so would be inconsistent with its fiduciary duties; provided further, that prior to effecting an Ambac Board Recommendation Change pursuant to a Superior Proposal that the Ambac Board determines in good faith represents or can reasonably be expected to lead to a Superior Proposal, Ambac shall (i) provide Buyer with at least five (5) business days prior notice (the “Superior Proposal Notice Period”) of its intention to take such action, (ii) during the Superior Proposal Notice Period and in response to such Superior Proposal, negotiate in good faith with Buyer (to the extent so desired by Buyer) any revisions to the terms of the transactions contemplated by the Purchase Agreement and proposed by Buyer; and, at the end of the Superior Proposal Notice Period (or, in the event that the Company Acquisition Proposal has been materially revised or modified, at the end of the two business day period following each such material revision or modification, if later), the Ambac Board determines in good faith that such Company Acquisition Proposal continues to constitute a Superior Proposal and that the failure to take such action would be inconsistent with its fiduciary duties under applicable laws. If there is any amendment, revision or change to the terms of any such Superior Proposal in a material respect and to the extent such proposal would no longer constitute a Superior Proposal, then Ambac shall (a) provide a new notice to Buyer and the applicable Superior Notice Period shall be extended until at least three (3) business days after the time Buyer receives notice from Ambac of such amendment, revision or change and (b) Ambac will again comply with the negotiation process described in this paragraph.

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See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—Non-Solicitation” beginning on page 68 for additional information.

Termination of the Purchase Agreement (page 71)

The Purchase Agreement contains certain customary termination rights for each of Ambac and Buyer, including, (i) by mutual written agreement, (ii) if the Sale has not been consummated on or before April 4, 2025 (the “End Date”), subject to certain extensions for 90 days, (iii) the other party is in breach of the Purchase Agreement in a manner that would result in a failure of an applicable closing condition and such breach cannot be cured or, if curable, has not been cured within 60 days after written notice to the other party of such breach (iv) the Required Stockholder Approval is not obtained by Ambac, or (v) if any applicable law makes the consummation of the Closing illegal or otherwise prohibited or any judgment, injunction, order or decree of any governmental authority enjoins Buyer and Ambac from consummating the Closing.

In addition, Buyer may terminate the Purchase Agreement if the Ambac Board changes its recommendation to Ambac’s stockholders regarding the Sale.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—Termination” beginning on page 71 for additional information.

Termination Fee (page 72)

Ambac will pay Buyer an amount equal to $22,000,000 (the “Termination Fee”) if all of the following occur: (i) the Purchase Agreement is terminated as a result of (a) not closing the Sale and the other Transactions by the End Date, subject to a certain conditional extension of ninety (90) days, (b) failure to obtain the Required Stockholder Approval or (c) an Ambac breach of representations or covenants that would cause certain closing conditions not to be satisfied; (ii) Ambac has received a Company Acquisition Proposal prior to a valid termination of the Purchase Agreement; and (iii) within twelve (12) months after termination of the Purchase Agreement Ambac enters into a definitive agreement for an alternative acquisition with respect to a Company Acquisition Proposal or Ambac consummates a Company Acquisition Proposal (for purposes of determining whether a Termination Fee is payable all references to “15%” in the definition of Company Acquisition Proposal shall be deemed to be references to “50%”). Ambac would also pay Buyer the Termination Fee if the Purchase Agreement is terminated for (x) Ambac’s breach of certain covenants related to regulatory efforts, non-solicitation or the Seller Shareholders Meeting that would cause closing conditions not to be satisfied or (y) the Ambac Board effects an Ambac Board Recommendation Change. In no event shall Ambac be required to pay the Termination Fee on more than one occasion or (z) the failure to receive the Required Stockholder Approval at a time when Buyer could have terminated the Purchase Agreement because of Ambac’s breach of covenants related to regulatory efforts, non-solicitation or the Seller Shareholders Meeting that would cause certain closing conditions not to be satisfied.

In addition to the Termination Fee, Ambac would pay Buyer up to $6,000,000 as a reimbursement of Buyer’s reasonably documented out-of-pocket fees and expenses incurred in connection with the Sale and the other Transactions if (i) the Purchase Agreement is terminated as a result of not closing the Sale and the other Transactions by the End Date and the Termination Fee is also payable, (ii) there is a failure to obtain the Required Stockholder Approval, when Buyer could have terminated the Purchase Agreement because there is an Ambac breach of representations or covenants related to regulatory efforts, non-solicitation or the Seller Shareholders Meeting that would cause closing certain conditions not to be satisfied, (iii) the Ambac Board changes its recommendation to its stockholders regarding the Sale and the other Transactions or (iv) there is an Ambac breach of representations or covenants that would cause certain closing conditions not to be satisfied.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—Termination Fee; Expense Reimbursement” beginning on page 72 for additional information.

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No Survival; No Indemnification (page 63)

The representations and warranties of the parties contained in the Purchase Agreement terminate as of, and do not survive, the Closing, and there are no indemnification rights for another party’s breach, and the covenants and agreements of the parties contained in the Purchase Agreement do not survive the Closing; provided that the obligation with respect to the Closing and purchase price; the acquisition of the co-investment facility; the provision of the requisite information to provide the publicly available financial information listed on Schedule C to the Settlement Agreement, dated as of June 7, 2010, by and among AAC, Ambac Credit Products LLC, and the policy beneficiaries party thereto (the “Settlement Agreement”); specified tax liabilities; and any covenants or agreements which by their terms contemplate performance (in whole or in part) after the Closing will survive to the extent required to be performed after the Closing, and provided, further, that the foregoing will not prevent or otherwise limit the rights of any party in the event of fraud or willful breach of the Purchase Agreement.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—No Survival; No Indemnification” beginning on page 63 for additional information.

Equity Commitment Letter (page 63)

In connection and concurrently with the entry into the Purchase Agreement, on June 4, 2024, Oaktree Opportunities Fund XII Holdings (Delaware), L.P., a Delaware limited partnership (“Sponsor”), entered into the Equity Commitment Letter with Buyer, pursuant to which, subject to the terms and conditions set forth in the Equity Commitment Letter, Sponsor has committed to contribute, directly or indirectly, to Buyer (a) at the Closing, cash in an aggregate amount equal to $450,000,000, solely for the purpose of funding and to the extent necessary to fund the amounts required to consummate the Sale, and (b) if the Closing is not consummated due to certain qualified terminations, then Sponsor will contribute an aggregate amount equal to $42,000,000, solely for the purpose of funding and to the extent necessary to fund the payment by Buyer to Ambac of monetary damages awarded to Ambac pursuant to a final, nonappealable judgment by a court arising from Buyer’s fraud or willful breach of the Purchase Agreement.

See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—Financing—Equity Commitment Letter” beginning on page 63 for additional information.

No Appraisal or Dissenters’ Rights (page 13)

No appraisal or dissenters’ rights are available to our stockholders under Delaware law or our Certificate of Incorporation or Bylaws in connection with the Sale or any other Transactions contemplated by the Purchase Agreement, regardless of whether such stockholders vote for or against the approval of the Sale Proposal.

Risk Factors (page 20)

The Sale and the other Transactions contemplated by the Purchase Agreement, including the possibility that the Sale and such other Transactions may not be completed, involve and are subject to a number of risks to Ambac and our stockholders, including the following:

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For additional information regarding the risk factors related to the Purchase Agreement, the Sale and the other Transactions provided for thereby, and the operation of the Retained Business by Ambac following the Closing of the Sale, see the section of this proxy statement entitled “Risk Factors” beginning on page 20.

The Special Meeting (page 23)

Date, Time and Place. The special meeting will be held on     , 2024 at     , Eastern time, virtually at www.virtualshareholdermeeting.com/AMBC2024SM, or at such other time, on such other date and at such other place to which the special meeting may be adjourned.

Matters to Be Considered at the Special Meeting. At the special meeting, holders of Ambac Common Stock as of the record date will consider and vote upon:

Record Date. Holders of Ambac Common Stock as of the close of business on     , 2024, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting and any postponements or adjournments of the special meeting.

Required Vote. The approval of the Sale Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Ambac Common Stock and entitled to vote thereon at the special meeting, voting together as a single class in person or by proxy. The approval of the Compensation Proposal requires that votes cast in favor of the proposal by stockholders present in person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting. The approval of the Adjournment Proposal requires that votes cast in favor of the proposal by stockholders present in person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting.

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QUESTIONS AND ANSWERS ABOUT THE SALE AND SPECIAL MEETING

The following are some questions that you, as a stockholder of Ambac, may have regarding the Sale as contemplated by the Purchase Agreement and the special meeting, together with brief answers to those questions. Ambac urges you to read carefully the remainder of this proxy statement, including the annexes and other documents referred to or incorporated by reference in this proxy statement, because the information in this section may not provide all of the information that might be important to you with respect to the Sale as contemplated by the Purchase Agreement and the special meeting.

A copy of the Purchase Agreement is attached to this proxy statement as Annex A.

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Ambac’s stockholders may indirectly receive proceeds pursuant to the Share Repurchase Program, however, they will not directly receive any proceeds from the Sale. For a description of the use of proceeds from the Sale and how such proceeds will be utilized, see the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—Use of Proceeds” beginning on page 46 and “Risk Factors – Ambac will receive all proceeds from the Sale” beginning on page 22.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement may contain or incorporate by reference 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 this proxy statement and in Part I, Item 1A of the annual report of Ambac on Form 10-K for the period ending December 31, 2023 and in Part II, Item 1A of the quarterly report of Ambac on Form 10-Q for the quarterly period ended March 31, 2024 and the documents incorporated by reference herein.

These forward-looking statements are also subject to a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied, including, but not limited to, risks and uncertainties relating to the following:

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Therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Should one or more of these risks or uncertainties materialize or should any of the assumptions being made prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You are advised, however, to consult any further disclosures we make on related subjects in our reports to the SEC.

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RISK FACTORS

In addition to the other information included and referred to in this proxy statement, including the matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 17, you should carefully consider the following risk factors before deciding how to vote your shares of Ambac Common Stock at the special meeting. These factors should be considered in conjunction with the other information included by Ambac in this proxy statement and the risk factors described in Ambac’s other filings with the SEC, including in the “Risk Factors” discussed under Part I, Item 1A of the annual report of Ambac on Form 10-K for the period ending December 31, 2023 and in Part II, Item 1A of the quarterly report of Ambac on Form 10-Q for the quarterly period ended March 31, 2024 and the documents incorporated by reference herein. In addition to those risk factors which are incorporated by reference herein, as of the date of this proxy statement, Ambac supplements such risk factors with the following risk factors. If any of the risks described below, incorporated by reference or otherwise referred to in this proxy statement actually materialize, the business, financial condition, results of operations or prospects of Ambac, or the stock price of Ambac, could be materially and adversely affected.

The Sale is subject to receipt of the Required Stockholder Approval and other closing conditions, and may not be completed as anticipated, or at all.

We are seeking the approval of the Sale Proposal by our stockholders in accordance with Section 271 of the DGCL on the basis that the Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of that statute and related case law. The Closing is conditioned on, among other things, the receipt of specified regulatory approvals and Ambac obtaining the Required Stockholder Approval at the special meeting.

In addition, the Purchase Agreement provides for certain termination rights. Buyer and Ambac may terminate the Purchase Agreement by mutual written agreement at any time prior to the Closing Date. In addition, either Buyer or Ambac may terminate the Purchase Agreement at any time prior to the Closing by giving written notice to the other party if:

The Purchase Agreement may be terminated by Buyer by written notice to Ambac if a breach of any representation or warranty or failure to perform any covenant or agreement shall have occurred that would cause certain conditions not to be satisfied, and such breach is not cured within sixty (60) days of written notice to Ambac or is incapable of being cured by the End Date. Additionally, the Purchase Agreement may be terminated by Buyer if at any time the Ambac Board effects an Ambac Board Recommendation Change.

The Purchase Agreement may be terminated by Ambac by written notice if a breach of any representation or warranty or failure to perform any covenant or agreement shall have occurred that would cause certain conditions not to be satisfied, and such breach is not cured within sixty (60) days of written notice to Buyer or is incapable of being cured by the End Date.

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The total proceeds realized from the Sale are contingent upon receiving the Required Stockholder Approval and other closing conditions. There can be no assurances that we will receive the vote and satisfy the conditions. Any delay in receiving the required stockholder vote and satisfying the other closing conditions may increase the risk that the Sale will be terminated, or reduce the benefits we expect to achieve.

The Sale and the other Transactions contemplated by the Purchase Agreement, whether or not completed, may adversely affect the Retained Business.

Transactions such as the Sale are often subject to lawsuits by stockholders. It is possible that our common stockholders or other stakeholders will commence or seek to commence litigation against Ambac or the Ambac Board. Such litigation could result in substantial costs and divert management’s attention from other business concerns, which could adversely affect the Retained Business.

In addition, our ability to execute on our business strategies for the Retained Business depends on the retention and recruitment of qualified executives and other professionals. We rely upon the services of our current executive and senior management teams. In addition to these officers, we rely on key staff with insurance, underwriting, business development, risk management, investment, accounting, finance, legal, technology and other technical and specialized skills. The market for qualified executives, senior managers and other employees has become very competitive. As a result of the Sale, we may experience higher employee turnover and finding qualified replacements may be more difficult. The loss of the services of members of our executive and/or senior management teams or our inability to hire and retain other talented personnel could delay or prevent us from succeeding in executing our strategies, which could negatively impact the Retained Business. Further, while the completion of the Sale is pending, we may be unable to attract and retain key personnel and our management’s focus and attention and employee resources may be diverted from operational matters.

If we fail to complete the Sale and the other Transactions contemplated by the Purchase Agreement, our business and financial performance may be adversely affected, including in the event Ambac is required to pay the Termination Fee.

The completion of the Sale and the other Transactions contemplated by the Purchase Agreement is subject to the satisfaction or waiver of various conditions, including the approval of the Sale by our stockholders, which may not be satisfied in a timely manner or at all.

If the Sale is not completed, we may have difficulty recouping the costs incurred in connection with negotiating the Sale and the other Transactions. Our directors, executive officers and other employees will have expended extensive time and effort and will have experienced significant distractions from their work during the pendency of the Sale, and we will have incurred significant third-party transaction costs, in each case, without any commensurate benefit, which may have a material and adverse effect on our stock price and results of operations.

Furthermore, if the Sale and the other Transactions are not completed, the announcement of the termination of the Purchase Agreement may adversely affect our relationships with our customers, business partners and employees, which could have a material adverse impact on our ability to effectively operate our business, and we may be required to pay the Termination Fee of $22,000,000 under certain circumstances, each of which could have further adverse effects on our business, results of operations and the trading price of Ambac Common Stock. See the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—Termination Fee; Expense Reimbursement” beginning on page 72 for additional information.

Additionally, we intend to use the proceeds of the Sale to repay all or a portion of the debt use to fund the Beat Transaction. If we do not consummate the Sale then we will need to repay or refinance such debt with other sources of funds, which may not be available on favorable terms or at all. An inability to repay the debt used to fund the Beat Transaction from proceeds of the Sale or other sources, or an inability to refinance such debt on favorable terms or at all, may materially negatively affect our business and results of operations.

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The Purchase Agreement contains provisions that limit our ability to pursue alternatives to the Sale.

The Purchase Agreement contains provisions that may make it more difficult for us to sell AAC to any party other than Buyer. These provisions include the prohibition on our ability to solicit competing proposals and the requirement that we pay Buyer the Termination Fee of $22,000,000 if we terminate the Purchase Agreement prior to the closing of the Sale as a result of our determining to accept a Company Acquisition Proposal that we determine in good faith to be a Superior Proposal. For additional information, see the sections of this proxy statement entitled “Proposal No. 1—The Sale Proposal—The Purchase Agreement—Non-Solicitation” beginning on page 68 and “—Termination Fee; Expense Reimbursement” beginning on page 72.

These provisions have, and could in the future, make it less advantageous for a third party that might have an interest in acquiring Ambac, or all or a significant part of AAC, to consider or propose an alternative transaction, even if that party were prepared to pay consideration with a higher value than the consideration to be paid by Buyer. See the discussion in the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Background of the Sale” beginning on page 30 for additional information.

If the Purchase Agreement is not approved or if we fail to complete the Sale, there may not be any other offer from potential acquirors that the Ambac Board determines to be attractive.

If we fail to complete the Sale, the Ambac Board, in discharging its fiduciary obligations to our stockholders, may evaluate other strategic alternatives including, but not limited to, continuing to operate AAC and the LFG Insurance business for the foreseeable future or an alternative transaction relating to AAC or Ambac. An alternative transaction, if available, may yield lower consideration or value than the proposed Sale, be on less favorable terms and conditions than those contained in the Purchase Agreement and involve significant delay. Any future sale of substantially all of Ambac’s property and assets within the meaning of Section 271 of the DGCL and related case law or other similar transaction may be subject to further stockholder approval, and there is no guarantee that Ambac would be able to obtain such stockholder approval in favor of any such sale or other transaction. If the LFG Insurance business is not sold, there can be no assurance that we will realize value at least equivalent to the proceeds of the Sale from the operation of the LFG Insurance business over time, or any value; nor can we predict the timeline for realizing value, if any, from the LFG Insurance business in the absence of the Sale.

Our future results following the Sale may differ materially from the preliminary unaudited pro forma combined financial information attached to this proxy statement.

The preliminary unaudited pro forma combined financial information in this proxy statement gives effect to the Sale and other Transactions as if they had occurred on December 31, 2023 and March 31, 2024 and is derived from the audited historical financial statements of Ambac as of December 31, 2023 and the unaudited financial statements of Ambac as of March 31, 2024. The preliminary unaudited pro forma combined balance sheet is not necessarily indicative of our financial condition. In addition, the assumptions used in preparing the preliminary unaudited pro forma combined financial information may not prove to be accurate, and other factors may affect our financial condition and results of operations following the Sale. Any change in our financial condition or results of operations may cause significant variations in the price of our common stock. For additional information, see the section of this proxy statement entitled “Preliminary Unaudited Pro Forma Combined Financial Information” beginning on page 74.

Ambac will receive all proceeds from the Sale.

Ambac intends to utilize the proceeds from the Sale (i) to repay all or a portion of the Acquisition Funding, (ii) to pay costs and expenses related to the Sale, (iii) to implement the Share Repurchase Program and (iv) for general corporate purposes, including without limitation, acquisitions consistent with Ambac’s Specialty Property and Casualty Insurance and Insurance Distribution strategies, which remain our primary source of value creation. Following the execution of the Share Repurchase Program, we will evaluate authorizing additional capital return activities measured against other capital deployment opportunities and based on market conditions.

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Ambac’s stockholders may indirectly receive proceeds pursuant to the Share Repurchase Program, however, they will not directly receive any proceeds from the Sale. Although we intend to return capital to Ambac’s stockholders through the Share Repurchase Program and other capital return activities, we may not be able to return such capital as a result of market conditions, the potential impact on our financial condition, results of operations, or liquidity position, and other considerations and constraints, some of which may be beyond our control. You should not vote to approve the Sale based upon the assumption that you will receive any portion of the proceeds from the Sale.

The opinion obtained by the Ambac Board from its financial advisor does not and will not reflect changes in circumstances after the date of such opinion.

Moelis delivered its written opinion addressed to the Ambac Board, dated June 3, 2024, to the effect that, as of the date of such opinion, and based upon and subject to the qualifications, procedures, limitations and assumptions set forth therein, the consideration to be received by Ambac in the Sale pursuant to the Purchase Agreement, is fair, from a financial point of view, to Ambac. Changes in the operations and prospects of AAC, including financial forecasts relating to AAC, general market and economic conditions and other factors, many of which may be beyond Ambac’s control, and on which the opinion of Moelis was based, may alter AAC’s value and affect the conclusions reached in the opinion. We have not obtained, and we do not expect to request, an updated opinion from Moelis. Moelis’s opinion does not speak to the time when the Sale will be completed or to any date other than the date of such opinion. As a result, the opinion does not and will not address the fairness, from a financial point of view, of the consideration to be received by us in connection with the Sale at the time the Sale is completed or at any time other than the time the opinion was rendered.

We are planning to further develop and expand our Specialty Property and Casualty Insurance and Insurance Distribution businesses; however, such plans may not be realized, or if realized, may not create value and may negatively impact our financial results.

Ambac is planning to further develop and expand its Specialty Property and Casualty Insurance and Insurance Distribution businesses, including through the Beat Transaction. Such plans may involve additional acquisitions of assets or existing businesses and the development of businesses through new or existing subsidiaries. Currently, it is not possible to fully predict the future prospects or other characteristics of such businesses. While we expect to conduct business, financial, and legal due diligence in connection with the evaluation of any future business or acquisition opportunities, there can be no assurance that our due diligence will identify every matter that could have a material adverse effect on us. Efforts to pursue certain business opportunities may be unsuccessful or require significant financial or other resources, which could have a negative impact on our operating results and financial condition. To implement our growth strategy, we must be able to meet our capital needs, expand our systems and our internal controls effectively, allocate our human resources optimally, identify and hire qualified employees, and effectively integrate any acquisitions we make in our effort to achieve growth. No assurance can be given that we will successfully execute our plans for new business, generate any earnings or value from new businesses or be able to successfully integrate any such business into our current operating structure.

THE SPECIAL MEETING

This proxy statement is being furnished to Ambac’s stockholders as part of the solicitation of proxies by the Ambac Board for use at the special meeting. This proxy statement provides Ambac’s stockholders with the information they need to know to be able to vote or instruct their vote to be cast at the special meeting.

Date, Time and Place of the Special Meeting

The special meeting will be held on    , 2024 at    , Eastern time, or at such other time, on such other date and at such other place to which the special meeting may be adjourned, to vote upon the Sale Proposal, the Compensation Proposal and the Adjournment Proposal. Stockholders will be able to attend the special meeting and examine the list of stockholders entitled to vote at the special meeting during the special meeting virtually by visiting www.virtualshareholdermeeting.com/AMBC2024SM.

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Purposes of the Special Meeting

The primary purpose of the special meeting is for Ambac stockholders to consider and vote upon the Sale Proposal to approve the Sale of AAC. Ambac stockholders must approve the Sale of AAC in order for the Sale to occur, as such Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of Section 271 of the DGCL and related case law and, as a result, it is a condition to Closing of the Sale under the Purchase Agreement that Ambac shall have received the Required Stockholder Approval in favor of the Sale Proposal at the special meeting. If Ambac’s stockholders fail to approve the Sale of AAC, the Sale will not occur. A copy of the Purchase Agreement is attached to this proxy statement as Annex A, and the material terms of the Purchase Agreement are described under “Proposal No. 1—The Sale Proposal—The Purchase Agreement” beginning on page 60.

Ambac’s stockholders are also being asked to approve the Compensation Proposal, to approve the “golden parachute” compensation arrangements and the Adjournment Proposal, to adjourn the special meeting to a later date or dates, if necessary or appropriate, in order to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Sale Proposal.

This proxy statement and the enclosed form of proxy are first being mailed to stockholders on or about    , 2024.

Recommendation of the Ambac Board

After careful consideration, the Ambac Board has unanimously approved the consummation of the Sale and the other Transactions contemplated thereby, and determined that it is advisable, fair to and in the best interests of Ambac and its stockholders to enter into the Purchase Agreement. Certain factors considered by the Ambac Board in reaching its decision to approve the Sale may be found in the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Recommendation of the Ambac Board and Its Reasons for the Sale” beginning on page 44.

The Ambac Board unanimously recommends that the stockholders of Ambac vote “FOR” the Sale Proposal to approve the Sale of AAC.

In addition, the Ambac Board unanimously recommends that the stockholders of Ambac vote “FOR” the Compensation Proposal, to approve certain compensation that may be payable to our named executive officers in connection with the Sale (i.e., “golden parachute” compensation), and “FOR” the Adjournment Proposal, to adjourn the special meeting, if necessary or appropriate, in order to solicit additional proxies.

Record Date and Quorum

The holders of record of Ambac Common Stock as of the close of business on    , 2024, the record date, and entitled to vote at the special meeting, are entitled to receive notice of and to vote at the special meeting. There are 45,224,972 shares of Ambac Common Stock issued and outstanding as of the record date.

At least a majority of the shares of Ambac Common Stock, outstanding as of the record date, must be represented at the special meeting, either in person or by proxy, to constitute a quorum for the transaction of business at the special meeting. Once a share is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting. However, if a new record date is set for an adjourned special meeting, then a new quorum will have to be established. Proxies received but marked as abstentions as described below under the sub-heading “—Voting; Proxies; Revocation—Providing Voting Instructions by Proxy” will be included in the calculation of the number of shares considered to be present for purposes of a quorum at the special meeting.

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Shares of Ambac Common Stock held by stockholders of record that submit a proxy but fail to provide voting instructions or abstain on any of the Proposals listed on the proxy card will be counted for the purpose of determining whether a quorum is present at the special meeting.

Shares of Ambac Common Stock held by stockholders in “street name” by a broker, bank or other nominee that do not instruct such broker, bank or other nominee on how to vote such shares will not be counted for purposes of determining whether a quorum is present at the special meeting.

Required Vote

Each share of Ambac Common Stock issued and outstanding at the close of business on the record date is entitled to one vote at the special meeting.

In order for Ambac to complete the Sale as contemplated by the Purchase Agreement, stockholders holding at least a majority of the shares of Ambac Common Stock issued and outstanding at the close of business on the record date and entitled to vote on the matters to be considered at the special meeting, must vote “FOR” the Sale Proposal to approve the Sale of AAC. A failure to vote your shares of Ambac Common Stock or an abstention from voting will have the same effect as a vote “AGAINST” the Sale Proposal to approve the Sale of AAC.

Approval of the Compensation Proposal requires that votes cast in favor of the proposal by stockholders present in person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting. An abstention or a failure to vote your shares will have no effect on the outcome of the Compensation Proposal so long as a quorum is present.

Approval of the Adjournment Proposal requires that votes cast in favor of the proposal by stockholders present in person or represented by proxy at the meeting and entitled to vote on the proposal exceed the votes cast against such proposal by such stockholders, with each such stockholder being entitled to one vote for each share of Ambac Common Stock held by such stockholder present in person or by proxy and entitled to vote on the proposal at the special meeting. An abstention or a failure to vote your shares will have no effect on the outcome of the Adjournment Proposal so long as a quorum is present.

Voting; Proxies; Revocation

Attendance

All holders of shares of Ambac Common Stock as of close of business on the    , 2024 record date, including stockholders of record and beneficial owners of Ambac Common Stock registered in the “street name” of a bank, broker or other nominee, are invited to attend the special meeting.

Voting in Person

Stockholders of record will be able to vote in person at the special meeting. If you are not a stockholder of record, but instead hold your shares of Ambac Common Stock in “street name” through a bank, broker or other nominee, you must provide a proxy executed in your favor from your bank, broker or other nominee in order to be able to vote in person at the special meeting.

Providing Voting Instructions by Proxy

To ensure that your shares of Ambac Common Stock are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting in person.

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Shares of Ambac Common Stock Held by Record Holder

If you are a stockholder of record, you may provide voting instructions by proxy using one of the methods described below.

If you are a stockholder of record on the record date and you sign, date and return your proxy card without indicating how you wish to vote, all of your shares will be voted “FOR” the Sale Proposal, the Compensation Proposal and the Adjournment Proposal. If you fail to return your proxy card or vote your shares through the Internet or by telephone, unless you attend the special meeting and vote in person, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as an “AGAINST” vote with respect to the Sale Proposal, but will have no effect on the approval of the Compensation Proposal and the Adjournment Proposal so long as a quorum is present. If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Shares of Ambac Common Stock Held in “Street Name”

If your shares of Ambac Common Stock are held by a bank, broker or other nominee on your behalf in “street name,” your bank, broker or other nominee will send you instructions as to how to provide voting instructions for your shares. Many banks and brokerage firms have a process for their customers to provide voting instructions via the Internet, in addition to providing voting instructions by a voting instruction form.

In accordance with the rules of the NYSE, banks, brokers and other nominees who hold shares of Ambac Common Stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to the Sale Proposal, the Compensation Proposal and the Adjournment Proposal described in this proxy statement. Accordingly, if banks, brokers or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they may not vote such shares with respect to the Sale Proposal, the Compensation Proposal and the Adjournment Proposal described in this proxy statement. Since all of the proposals currently expected to be voted on at the special meeting are considered non-routine matters, shares held in “street name” through a broker, bank or other nominee will not be counted as present for the purpose of determining the existence of a quorum if such broker, bank or other nominee does not have instructions to vote on any such proposals. For shares of Ambac Common Stock held in “street name,” only shares of Ambac Common Stock affirmatively voted “FOR” the Sale Proposal to approve the Sale of AAC will be counted as a favorable vote for such proposal.

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Revocation of Proxies

Any person giving a proxy pursuant to this solicitation has the power to revoke and change it any time before it is voted. If you are a stockholder of record, you may revoke your proxy at any time before the vote is taken at the special meeting by:

Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to Ambac or by sending a written notice of revocation to Ambac, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by Ambac before the special meeting.

If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee in order to revoke your proxy or submit new voting instructions.

If you are a stockholder of record, you may revoke your proxy and change your vote at any time before your proxy is voted at the special meeting by returning a later-dated proxy card, by voting again over the Internet, by telephone or in person at the special meeting as more fully detailed in your proxy card, or by delivering written instructions to us at the principal executive offices of Ambac before the special meeting. Attendance at the special meeting will not in and of itself cause your previously voted proxy to be revoked unless you specifically so request or vote again at the special meeting. If your shares are held in an account at a bank, brokerage firm or other agent, you may change your vote by submitting new voting instructions to your bank, brokerage firm or other agent, or, if you have obtained a valid proxy from your bank, brokerage firm or other agent giving you the right to vote your shares, by attending the special meeting and voting in person. If you have instructed your broker, dealer, bank or other nominee to vote your shares, you must follow directions received from your broker, dealer, bank or other nominee in order to change those instructions.

Abstentions

An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of Ambac Common Stock represented at the special meeting for purposes of determining whether a quorum has been achieved. Abstaining from voting will have the same effect as a vote “AGAINST” the Sale Proposal to approve the Sale of AAC, but will have no effect on the Compensation Proposal and the Adjournment Proposal.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies. In the event that there is present, in person or by proxy, sufficient favorable voting power to secure the vote of the stockholders of Ambac necessary to approve the Sale Proposal to approve the Sale of AAC, Ambac does not anticipate that it will adjourn or postpone the special meeting unless it is advised by counsel that failure to do so could reasonably be expected to result in a violation of applicable law.

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Solicitation of Proxies

The Ambac Board is soliciting your proxy, and Ambac will bear the cost of this solicitation of proxies. This includes the charges and expenses for preparation, assembly, printing, mailing and distribution of this proxy statement and the related proxy materials. D.F. King & Co., Inc. (“D.F. King”), a proxy solicitor, has been retained to assist Ambac in the solicitation of proxies for the special meeting, and Ambac will pay D.F. King a fee estimated not to exceed $50,000, plus reimbursement for its reasonable out-of-pocket expenses, and indemnify D.F. King and its affiliates against certain claims, liabilities, losses, damages and expenses for its services as Ambac’s proxy solicitor. Proxies may be solicited by mail, personal interview, e-mail, telephone or via the Internet by calling (800) 848-3416 (stockholders call toll free) or (212) 257-2468 (banks and brokers), or by emailing AMBC@dfking.com, or, without any additional compensation, by certain of Ambac’s directors, officers and employees.

Ambac will ask banks, brokers and other institutions, nominees and fiduciaries holding shares of Ambac Common Stock beneficially owned by others to forward this proxy statement and the related proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Ambac will reimburse brokerage firms and other custodians for their reasonable out-of-pocket expenses for forwarding this proxy statement and the related proxy materials to Ambac’s stockholders.

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PROPOSAL NO. 1—THE SALE PROPOSAL

General Description of the Sale

On June 4, 2024, Ambac entered into the Purchase Agreement with Buyer, pursuant to which Ambac has agreed to sell in the Sale all of the issued and outstanding shares of common stock, par value $2.50 per share, of AAC to Buyer for aggregate consideration of $420,000,000 in cash, subject to certain adjustments. The terms of the Sale as contemplated by the Purchase Agreement provide that, at the Closing, Buyer will acquire complete common equity ownership of AAC and its subsidiaries, including Ambac UK. Immediately following completion of the Sale, Buyer will own all of AAC’s outstanding common equity interests and AAC will be a wholly-owned subsidiary of Buyer.

We are seeking the approval of the Sale Proposal by our stockholders in accordance with Section 271 of the General Corporation Law of the State of Delaware (“DGCL”) on the basis that the Sale could be considered to constitute the sale of substantially all of Ambac’s property and assets within the meaning of that statute and related case law. The Closing is conditioned on, among other things, Ambac obtaining the approval of the Sale by the affirmative vote of the holders of a majority of outstanding shares of the Ambac Common Stock entitled to vote thereon at the special meeting, voting together as a single class in person or by proxy. We expect the Closing of the Sale to occur on the Closing Date, which shall be the date that is the last business day of the calendar month during which the last of the conditions to Closing (including receipt of the Required Stockholder Approval in favor of the Sale Proposal at the special meeting) have been satisfied or waived; provided that, if the last of the conditions to Closing is satisfied fewer than ten business days prior to the last business day of the calendar month, the Closing Date shall be the date that is the last business day of the immediately following calendar month.

Parties to the Purchase Agreement

Ambac

Ambac Financial Group, Inc., headquartered in New York City, is a financial services holding company incorporated in the State of Delaware on April 29, 1991. Ambac currently operates three principal businesses:

On August 1, 2024, Ambac completed its previously announced acquisition of Beat pursuant to a share purchase agreement, by and among Ambac, Cirrata V LLC, the Beat Sellers and Beat, effective July 31, 2024, pursuant to which, and upon the terms and conditions set forth therein, Ambac purchased from the Beat Sellers approximately 60% of the entire issued share capital of Beat, for fixed consideration of approximately $286.7 million, of which approximately $248.6 million was paid in cash and the remainder of which was satisfied through the issuance of 2,216,023 shares of Ambac Common Stock. The cash portion of the consideration will be funded by the Acquisition Funding and cash on hand at Ambac.

Additional information regarding Ambac is contained in the documents incorporated by reference into this proxy statement and the other documents that we file with the U.S. Securities and Exchange Commission (the “SEC”). See the section of this proxy statement entitled “Where You Can Find Additional Information” beginning on page 101.

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Oaktree

Buyer is owned by funds managed by Oaktree. Oaktree is a leader among global investment managers specializing in alternative investments, with $192 billion in assets under management as of March 31, 2024. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. Oaktree has over 1,200 employees and offices in 23 cities worldwide. Oaktree’s headquarters is located at 333 South Grand Ave., 28th Floor, Los Angeles, CA 90071. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.

Background of the Sale

The following chronology summarizes the communications and events that led to the signing of the Purchase Agreement. This chronology is not, and does not purport to be, a catalogue of every interaction among Ambac and any applicable parties.

Prior to the global financial crisis in 2008, Ambac provided financial guarantee insurance policies through its principal operating subsidiary, AAC, and AAC’s wholly owned subsidiary, Ambac UK. Insurance policies issued by AAC and Ambac UK generally guarantee payment when due of the principal and interest on the obligations guaranteed. The deterioration of Ambac’s financial condition resulting from losses in its insured portfolio that began in 2007 has prevented AAC and Ambac UK from being able to write new business. In 2009, Ambac UK’s license to write new business was curtailed, and its insurance license was limited to undertaking only run-off related activity. Beginning in 2010, AAC’s licenses were restricted by regulatory action or by agreement with the relevant insurance departments. As a result, both AAC and Ambac UK have been in runoff since 2008 and Ambac has focused on actively managing both sides of each entity’s balance sheets, resulting in the key events below.

In March 2010, AAC established a Segregated Account pursuant to Wisconsin Statute §611.24(2) (the “Segregated Account”) to segregate certain segments of AAC’s liabilities, and OCI commenced rehabilitation proceedings in the Dane County, Wisconsin Circuit Court with respect to the Segregated Account in order to permit OCI to facilitate an orderly run-off and/or settlement of the liabilities allocated to the Segregated Account pursuant to the provisions of the Wisconsin Insurers Rehabilitation and Liquidation Act. On October 8, 2010, OCI filed a plan of rehabilitation for the Segregated Account in the Dane County, Wisconsin Circuit Court. On November 8, 2010, Ambac filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York and on May 1, 2013, Ambac emerged from Chapter 11 bankruptcy protection. Upon emergence, Ambac had no outstanding debt at the holding company and significant net operating loss carry-forwards. The plan of rehabilitation with respect to the Segregated Account became effective on June 12, 2014. Following the effectiveness of the plan of rehabilitation, Ambac’s principal business strategy was to increase the residual value of its LFG Insurance business primarily by mitigating losses on poorly performing transactions and maximizing the yield on its investment portfolio.

In February 2018, Ambac achieved one of its key strategic priorities—the exit from rehabilitation of the Segregated Account. In connection with the exit from rehabilitation, Moelis acted as a dealer-manager in an exchange offer. Immediately upon exit from rehabilitation, the Segregated Account merged with the general account of AAC, and the Segregated Account ceased to exist. Following this milestone, Ambac continued to pursue and prioritize its then-remaining key strategic priorities, which included: (i) active runoff of AAC and its subsidiaries through transaction terminations, policy commutations, settlements and restructurings, with a focus on Ambac’s watch list credits and known and potential future adversely classified credits, and maximizing the risk-adjusted return on invested assets; (ii) ongoing rationalization of Ambac’s and its subsidiaries’ capital and liability structures; (iii) loss recovery through active litigation management and exercise of contractual and legal rights; (iv) ongoing review of organizational effectiveness and efficiency of the operating platform; and (v) evaluation of opportunities in certain business sectors that meet acceptable criteria that will generate long-term stockholder value with attractive risk-adjusted returns. In addition, in July 2018, Ambac exchanged existing AMPS for surplus notes, cash and warrants with Moelis acting as a dealer-manager in connection with the exchange offer.

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In 2020, Ambac advanced its new business Specialty Property and Casualty Insurance platform, including the successful recruitment and hiring of an experienced management team to lead the platform; the redomestication and license expansion of Everspan Insurance Company, an admitted carrier; and the de novo establishment of Everspan Indemnity Insurance Company, a domestic surplus lines carrier. In addition, in the Insurance Distribution business, Ambac’s Cirrata Group acquired controlling interests in (i) Xchange as of December 31, 2020; (ii) All Trans and Capacity Marine as of November 1, 2022; and (iii) Riverton Insurance Agency, Corp. as of August 1, 2023, building a diversified portfolio of MGA/Us covering various P&C products.

On October 6, 2022, AAC entered into a Settlement Agreement and Release (the “BOA Settlement Agreement”) with Bank of America Corporation and certain affiliates thereof (together, the “BOA Parties”) whereby the BOA Parties agreed to pay AAC the sum of $1,840,000,000 following the dismissal of AAC’s lawsuits against the BOA Parties, and the withdrawal by AAC of its objections, including any pending appeals, concerning the settlements that were the subject of certain trust instructional proceedings. See Ambac’s Form 8-K filed on October 13, 2022 for more information regarding the BOA Settlement Agreement.

As of December 6, 2022, after a years-long process to de-risk AAC’s exposure to Puerto Rico, all AAC-insured Puerto Rico obligations were restructured via court-approved plans of adjustment or qualifying modifications.

On December 29, 2022, AAC entered into a Settlement Agreement and Release (the “Nomura Settlement Agreement”) with Nomura Credit & Capital, Inc. (“Nomura”) to settle its litigation against Nomura concerning certain residential mortgage-backed securities trusts (the “Trusts”). Pursuant to the Nomura Settlement Agreement, Nomura made a cash payment to AAC of $140,000,000, and AAC and Nomura agreed to release each other and their respective affiliates and related persons from any claims relating to the Trusts, the financial guaranty policies issued by AAC in connection with Trusts (other than AAC’s obligations to pay insurance claims under such policies), the securities related to the Trusts, and the mortgage loans related to the Trusts. See Ambac’s Current Report on Form 8-K filed with the SEC on January 3, 2023 for more information regarding the Nomura Settlement Agreement.

Following the resolution of Ambac’s residential mortgage-backed securities litigation, Ambac repaid in full its outstanding LIBOR plus 4.5% Senior Secured Notes due 2026 and its 8.5% Senior PIK Notes due 2055 with the amounts paid under the BOA Settlement Agreement and Nomura Settlement Agreement. In addition, AAC repurchased $266 million current par of surplus notes from third party holders, and $67 million current par of surplus notes from Ambac, between the second and fourth quarters of 2022.

Following 2022, Ambac continued to seek to maximize long-term shareholder value through the execution of key strategies for its (i) Specialty Property and Casualty Insurance and Insurance Distribution businesses and (ii) LFG Insurance. The strategic priorities for its Specialty Property and Casualty Insurance and Insurance Distribution businesses included: (i) growing a Specialty Property and Casualty Insurance business which generates underwriting profits and an attractive return on capital from a diversified portfolio of commercial and personal liability risks accessed through program administrators; and (ii) building an Insurance Distribution business based on deep domain knowledge in specialty and niche classes of risk which generate attractive margins at scale through acquisitions, new business “de-novo” formation and incubation, and product expansion supported by a centralized technology led shared services offering. Ambac’s strategic priorities for the LFG Insurance business included: (i) actively managing, de-risking and mitigating insured portfolio risk, and pursuing recovery of previously paid losses; (ii) improving operating efficiency and optimizing our asset and liability profile; and (iii) exploring strategic options to further maximize value for Ambac.

As previously disclosed, the ultimate goal of Ambac’s LFG Insurance business strategy has been to monetize the value of AAC and Ambac UK through (i) dividends and capital distributions while managing their active run-off; (ii) one or more reinsurance transactions or other de-risking transactions that will accelerate or enhance the ability of AAC and/or Ambac UK to pay dividends and make capital distributions; (iii) the sale of all or portions of AAC and/or Ambac UK; or (iv) other strategic transactions to accelerate and/or enhance the above-stated corporate strategy, in each case, subject to the regulatory constraints applicable to the runoff nature of the LFG Insurance business.

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In connection with such strategy, the Ambac Board and senior management regularly reviewed and assessed strategic options for the LFG Insurance business, including engaging in discussions with interested parties for the sale of the LFG Insurance business. In order to increase Ambac’s strategic flexibility with respect to the LFG Insurance business, including through a sale transaction, the Ambac Board and senior management are in regular dialogue with its regulators and other stakeholders with respect to its capital model and regulatory and contractual restrictions applicable to AAC and Ambac UK.

In Ambac’s annual report on Form 10-K for the period ending December 31, 2022, Ambac disclosed that the OCI was developing a new capital model (the “Capital Model”) to assist the OCI with making decisions related to AAC’s capital and liquidity management.

In Ambac’s quarterly report on Form 10-Q for the period ending March 31, 2023, Ambac indicated that it was exploring strategic options to maximize the value of the LFG Insurance business and over the course of 2023, Ambac explored a number of strategic options, including reinsurance transactions, a full or partial sale of Ambac UK, a full or partial sale of AAC, a Part VII transfer of Ambac UK, liability management exercises, reducing operating expenses and running-off the insured portfolio, with potential counterparties. As part of the exploration of strategic options, Ambac’s management and the Ambac Board, together with its advisors, evaluated the relative value, on a time- and risk-adjusted basis, and the viability of those strategic options and various combinations thereof.

On May 30, 2023, Claude LeBlanc, the Chief Executive Officer of Ambac and AAC (“Mr. LeBlanc”), had a preliminary conversation over dinner in New York City with Greg Share (“Mr. Share”) of Oaktree and Yadin Rozov (“Mr. Rozov”), an advisor and operating partner to Oaktree, to discuss Oaktree’s possible interest in a strategic transaction, potentially involving the sale of all or a portion of AAC and its subsidiaries or one or more other transactions of the type mentioned above (the “Potential Transaction”). In addition, Mr. LeBlanc, Mr. Share and Mr. Rozov discussed views on the market conditions and other important developments related to Ambac over the past several years.

On July 11, 2023, Mr. LeBlanc and Mr. Rozov discussed over the telephone Oaktree’s potential interest in the Potential Transaction and the possible timing of such Potential Transaction.

On September 18, 2023, Mr. LeBlanc and Mr. Rozov discussed over the telephone Oaktree’s interest in exploring the Potential Transaction with Ambac and the desire to meet with Ambac’s advisors. Subsequently, on September 28, 2023, Mr. LeBlanc met with Mr. Share and Mr. Rozov at the offices of Ambac’s financial advisor, Moelis, to discuss a range of matters, including potential options for the LFG Insurance business, the surplus notes and the composition of the investment and insured portfolios.

In its quarterly report for the period ending September 30, 2023 filed with the SEC on November 7, 2023, Ambac disclosed that the Capital Model was substantially complete.

On November 8, 2023, Mr. LeBlanc announced on Ambac’s earnings call for the period ending September 30, 2023, that Ambac had formally engaged Moelis as its financial advisor along with certain other external advisors to commence discussions with interested parties and assess potential transactions to maximize value from the LFG Insurance business.

On December 11, 2023, at the direction of the Ambac Board, Moelis formally launched the process for the Potential Transaction.

From December 2023 through February 2024, Moelis contacted 25 potential counterparties, which included private equity firms and other financial investors as well as strategic acquirors. Over the same period, Ambac’s senior management and Ambac’s legal counsel, Debevoise & Plimpton LLP (“Debevoise”), negotiated non-disclosure agreements (“NDAs”) with 17 parties, including Oaktree, with respect to the Potential Transaction. Ambac and certain funds managed by Oaktree entered into an NDA on December 22, 2023, pursuant to which Ambac would provide certain nonpublic information to Oaktree.

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On December 13, 2023, representatives of Moelis met with representatives of Oaktree by video conference for preliminary discussions relating to the potential sale of all or a portion of AAC.

On January 8, 2024, Moelis and Ambac provided the parties with whom Ambac had entered into an NDA and their representatives with access to a virtual data room containing due diligence materials for Ambac and AAC, including a Confidential Information Memorandum, a financial model and information about the investment and insured portfolios.

Throughout January 2024, Mr. LeBlanc had a number of discussions with interested parties in the Potential Transaction. On January 4, 2024, Mr. LeBlanc had a telephone call with a representative (the “Party A Representative”) of an interested party (“Party A”) to introduce the Potential Transaction and determine whether Party A might be interested in the Potential Transaction. On January 10, 2024, Mr. LeBlanc had another call with the Party A Representative to confirm that Party A had all the necessary information it required to progress Party A’s assessment of its interest in the Potential Transaction. On the same day, representatives of Moelis met with representatives of Oaktree by video conference for an initial due diligence discussion.

On January 13, 2024, Mr. LeBlanc had a telephone call with a representative (the “Party B Representative”) of another interested party (“Party B”) to discuss the Potential Transaction and various options for the transaction, including a reinsurance transaction, joint venture, and the potential joint investment with another party (“Party C”).

Beginning on January 16, 2024, at the direction of Ambac, Moelis sent process letters to the potential counterparties on a rolling basis. The process letters requested that initial indications of interest be submitted by February 6, 2024 (“Round One”).

On January 25, 2024, Moelis met with Oaktree by video conference to discuss a broad range of financial and business due diligence matters. Following the due diligence discussion, on February 7, 2024, Mr. LeBlanc had a telephone call with Mr. Rozov to discuss Oaktree’s level of interest in the Potential Transaction and the progress Oaktree had made on due diligence.

In Round One, Ambac received seven non-binding indications of interest. On February 6, 2024, Ambac received an indication of interest from each of Oaktree, Party B, Party C, and two other interested parties. Oaktree’s proposal was to acquire all of the issued and outstanding common stock of AAC for a purchase price of $359,565,000 to $405,327,000 in cash, subject to certain adjustments. Party B and Party C submitted a joint letter of interest that did not contain any specific terms or an indication of the purchase price and did not specify the type of transaction in which the parties were interested. Of the other two parties, one proposed to acquire all of the issued and outstanding common stock of AAC for a purchase price of $150,000,000 and the other party did not include an indication of the purchase price.

On February 5, 2024, Ambac provided an NDA and “teaser” presentation to a potential strategic acquiror (“Party E”).

On February 6, 2024, Ambac and Party E entered into an NDA and Moelis provided Party E with the Confidential Information Memorandum and access to the virtual data room.

On February 8, 2024, Ambac received an indication of interest from Party A. Party A proposed to acquire all of the issued and outstanding common stock of AAC for a purchase price of $200,000,000. In addition, Party A would receive a 50% benefit of any successful pre-transaction liability management exercise with any discount captured from a restructuring of AAC’s surplus notes and Auction Market Preferred Shares to be split evenly between Ambac and Party A, with Ambac’s 50% share to be added to the purchase price, which could increase the purchase price to as much as $412,000,000 assuming Ambac obtained material discounts on purchases of outstanding surplus notes and Auction Market Preferred Shares. In addition, Party A’s proposal required Ambac to resolve a material litigation as a condition to closing and indemnify Party A for another litigation.

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On February 13, 2024 and February 15, 2024, two other interested parties submitted initial bid letters. The parties proposed to acquire all of the issued and outstanding common stock of AAC for $150,000,000 to $250,000,000 and $200,000,000 to $250,000,000 respectively.

Throughout the second half of February 2024, parties who submitted indications of interest were provided access to Ambac senior management and incremental financial information, including the book value and adjusted book value figures for the period ending December 31, 2023. The parties were invited to improve their initial proposals. Although Party A later revised its bid (as described below), Oaktree was the only party to formally rebid – four parties indicated that they were unwilling to rebid relative to their initial proposals, and two parties did not respond to further requests to provide a proposal.

On February 20, 2024, Oaktree submitted a non-binding term sheet to Ambac. Oaktree proposed to acquire all of the issued and outstanding common stock of AAC for a purchase price of $450,000,000, subject to downward adjustments related to the resolution of specified contingencies, and the issuance by Ambac of participating warrants exercisable for a number of Ambac Common Stock representing 9.9% of the fully diluted shares of Ambac Common Stock, pro forma for the issuance of the warrants. Oaktree proposed that the per share exercise price of the warrants be set at a 30% premium over the 30-day volume weighted average price of the Ambac Common Stock as of November 8, 2023 (the date on which Mr. LeBlanc announced on Ambac’s third quarter earnings call that Ambac had engaged Moelis to commence discussions with third parties relating to the LFG Insurance business), have a 5-year term from the date of issuance, and be immediately exercisable. The term sheet also provided that, upon the issuance of the warrants, Oaktree would receive the right to nominate one or more representatives to the Ambac Board to serve as directors, commensurate with its as-exercised economic stake.

On the same day, Mr. LeBlanc had a telephone call with the Party B Representative to discuss Party B’s progress in assessing the Potential Transaction. Mr. LeBlanc and the Party B Representative also discussed the possibility of Party B submitting a joint bid for the Potential Transaction with Party C. In addition, members of Ambac’s senior management, together with representatives of Moelis, and representatives of Oaktree met by video conference to discuss a broad range of financial and business due diligence matters.

On February 21, 2024, the Ambac Board convened a meeting to review the bids received to date. Following the meeting, further information was provided to four parties, including Oaktree. The additional information included a capital model, further detail about the investment and insured portfolios and developments on certain actual and threatened litigation. As part of the process, Ambac also reviewed with each of the bidders a comprehensive insured portfolio de-risking presentation. At the direction of Ambac, Moelis later indicated to the other bidders that their bid levels were too low to proceed to the next round of the process.

On February 22, 2024, representatives of Oaktree and members of Ambac’s senior management met over video conference and discussed a range of issues related to the Potential Transaction.

On February 23, 2024, at an industry event, Mr. LeBlanc spoke separately with each of the Party B Representative and Mr. Share about the Potential Transaction. The next day, Mr. LeBlanc continued his conversation with the Party B Representative, discussing the structure of the Potential Transaction.

On February 27, 2024, in Ambac’s press release reporting Ambac’s results for the period ending December 31, 2023, Mr. LeBlanc was quoted as saying that, working with the OCI, Ambac had finalized the Capital Model and the revised Stipulation and Order for AAC. In addition, Mr. LeBlanc noted that the strategic review that Ambac announced and launched in the previous quarter was proceeding on plan and that Ambac would update the market once there was something definitive to report.

On March 4, 2024, members of Ambac’s senior management, together with representatives of Moelis, and representatives of Oaktree met by video conference. The parties discussed due diligence matters in connection

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with capital allocation and potential risk remediation opportunities in connection with the composition of the insured portfolios. Following the discussion, on March 6, 2024, Mr. LeBlanc had a telephone call with Mr. Share and Mr. Rozov during which Mr. Rozov and Mr. Share reaffirmed Oaktree’s interest in the Potential Transaction and expressed a desire that Oaktree enter into an exclusivity agreement with Ambac.

On March 4, 2024, Party E communicated to Moelis that it would not be submitting a bid.

On March 7, 2024, Ambac, AAC’s litigation counsel at Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”), Moelis, Oaktree, and Oaktree’s legal advisor Kirkland & Ellis LLP (“Kirkland”) met over video conference, and subject to attorney-client privilege, to discuss diligence matters. On the same day, Party A indicated to Moelis that it was considering an alternative approach to the Potential Transaction that could involve both cash consideration and the retention of a minority interest in AAC by Ambac. Under that structure, Party A indicated that it would bid above $200,000,000, but no more than $300,000,000.

On March 9, 2024, Mr. LeBlanc had a call with the Party B Representative to discuss the valuation of AAC and the ability of Ambac to maximize such valuation.

On March 11, 2024, members of Ambac’s senior management and representatives of Moelis and Oaktree met by video conference where Ambac management presented to Oaktree on the LFG Insurance business. On the same day, Mr. LeBlanc and the Party A Representative discussed over the telephone the possible response of rating agencies to the Potential Transaction and strategies for responding to such responses. In addition, Mr. LeBlanc had a telephone call with a representative of Party C (the “Party C Representative”) to discuss AAC’s outstanding litigation, the composition of AAC’s investment portfolio and Ambac’s strategy in connection with such portfolio and Party C’s indicative non-binding valuation of AAC.

On March 14, 2024, Ambac, Moelis, Oaktree and representatives from Kirkland and Debevoise met over video conference to discuss certain due diligence matters relating to litigation, contingencies, and outstanding indebtedness. A draft of the Purchase Agreement was posted to the virtual data room for Oaktree’s review.

On March 16, 2024, Mr. LeBlanc and the Party B Representative met and discussed the value components of the Potential Transaction and Party B’s approach to the valuation of AAC. On the same day, Mr. LeBlanc met with a representative (the “Party D Representative”) of another interested party (“Party D”) to discuss Party D’s expression of interest in the Potential Transaction.

On March 17, 2024, Mr. LeBlanc and a representative of Moelis met with Mr. Share and Mr. Rozov over video conference to discuss key terms of the Potential Transaction and other matters.

On March 18, 2024, Party A submitted a non-binding proposal to Ambac. Party A proposed to acquire all of the issued and outstanding common stock of AAC for a purchase price of $325,000,000 to $400,000,000, assuming repurchase in full of the surplus notes (including accrued interest) and the Auction Market Preferred Shares at a material discount prior to closing. Party A’s revised proposal continued to require Ambac to resolve certain material litigation in which Ambac is a defendant prior to consummation of the transaction. It also required that certain Ambac UK policies be reinsured to a reinsurer(s) rated at least AA by S&P, that AAC have a minimum statutory capital amount of $765,000,000 at closing (which would have required a material discount on the repurchase of all surplus notes and Auction Market Preferred Shares), and that no more than 20% of AAC’s investment portfolio be rated below investment grade at signing and closing. Party B and Party C submitted a joint non-binding proposal on the same day, pursuant to which one or more affiliates of the parties proposed to acquire all of the equity in Ambac UK for a purchase price of $275,000,000 to $300,000,000. In addition, Party C proposed that it would engage with Ambac on a strategic reinsurance transaction.

On March 19, 2024, Mr. LeBlanc met with Mr. Share and Mr. Rozov over video conference to discuss Oaktree’s comments to the draft Purchase Agreement. Mr. LeBlanc, Mr. Share and Mr. Rozov also discussed a range of

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other matters, including the treatment of litigation, regulation and Oaktree’s valuation of AAC. That day, Mr. LeBlanc also discussed with the Party B Representative over the telephone Party B’s valuation of Ambac UK and Party B’s approach thereto. On March 20, 2024, Mr. LeBlanc and the Party B Representative continued their discussion from the day prior about Party B’s valuation of Ambac UK.

On March 21, 2024, Debevoise sent to Kirkland a draft of an exclusivity agreement (the “Exclusivity Agreement”) to be entered into between Ambac and Oaktree. Ambac and Oaktree negotiated the terms of the Exclusivity Agreement between March 21, 2024 and April 3, 2024.

On March 21, 2024, Ambac, Moelis, Oaktree and representatives from Kirkland and Debevoise met over video conference for a due diligence discussion regarding ongoing contingencies. Later that day, Ambac, Moelis, and Oaktree met over video conference to discuss the financial statements of AAC, in particular, the balance sheet. On the same day, Mr. LeBlanc and Mr. Share had a telephone call to discuss Oaktree’s comments to the draft Purchase Agreement. During negotiations, Ambac expressed a desire for certainty as to the purchase price. As a result, the parties agreed to a purchase price of $420,000,000 with upward adjustments for favorable outcomes on certain specified matters.

On March 22, 2024, Oaktree submitted a revised non-binding term sheet to Ambac. The Ambac Board met in the afternoon of that day to discuss the bids received and next steps.

On March 23, 2024, Ambac sent a letter to Oaktree asking for clarification of certain items outlined in the revised non-binding term sheet that it submitted the prior day.

On March 25, 2024, Ambac, Moelis, Oaktree and representatives from Kirkland and Debevoise met over a video conference to continue their discussion of matters relating to the treatment of ongoing litigation in the context of the Potential Transaction. The same day, Oaktree sent to Ambac a letter responding to Ambac’s letter of March 24, 2024. Among other things, the letter revised the proposed terms of the warrant such that Oaktree would be entitled to appoint a board observer to the Ambac Board, which would terminate upon the date on which Oaktree had sold more than 50% of the warrants (or Ambac Common Stock issued upon the exercise thereof) issued pursuant to the Potential Transaction. Oaktree also agreed to lower the Termination Fee to $22,000,000, down from $24,750,000.

On March 26, 2024, Mr. LeBlanc and the Party B Representative had a telephone call to discuss Ambac UK and in particular, Party B’s evaluation of reinsurance of Ambac UK’s insured portfolio.

On March 27, 2024, Mr. LeBlanc and the Party C Representative had a telephone call to discuss reinsurance of all or a portion of Ambac UK or a potential sale. That day, Mr. LeBlanc also had a call with Mr. Share and Mr. Rozov to discuss key terms of the draft Purchase Agreement and the regulatory approval process related to the Potential Transaction.

On March 28, 2024, Oaktree sent to Ambac a revised letter responding to Ambac’s letter of March 23, 2024. Oaktree revised the proposed terms of the warrant such that Ambac would grant Oaktree the right to designate one (1) director to the Ambac Board at any time following the date on which Oaktree had exercised the warrant for more than 50% of the maximum number of shares issuable pursuant to the warrant. Oaktree also clarified certain matters with respect to the adjustments to the purchase price.

On March 29, 2024, the Ambac Board met to authorize entry into the Exclusivity Agreement after final negotiations by management with Oaktree.

On March 31, 2024, Ambac, Moelis, Oaktree and representatives from Kirkland and Debevoise met to discuss the terms of the Exclusivity Agreement. The same parties continued the discussion of the terms of the Exclusivity Agreement on April 2, 2024.

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On April 1, 2024, Mr. LeBlanc and the Party B Representative had a telephone call to discuss reinsurance of all or a portion of the insurance portfolio of Ambac UK or a potential sale.

On April 2, 2024, Mr. LeBlanc met with Mr. Share and Mr. Rozov over video conference to discuss and negotiate the terms of the Warrant and the Exclusivity Agreement. The same day, Mr. LeBlanc also had a telephone call with the Party A Representative to discuss updates on the transaction process.

On April 3, 2024, Ambac and Oaktree entered into the Exclusivity Agreement. The Exclusivity Agreement contained an exhibit pursuant to which Oaktree clarified certain matters relating to its proposal, including that the proposed warrant would have a fixed exercise price of $18.50 per share and have a six-and-a-half (6¹⁄₂)-year term from the date of issuance.

On April 5, 2024, at the direction of Ambac, representatives of Moelis and representatives of Oaktree met for a discussion regarding diligence data requests. Following that discussion, on the same day, representatives of Moelis met with representatives of BlackRock, Inc., an advisor to Oaktree (“BlackRock”), to discuss the virtual data room.

Throughout April 2024, the parties conducted due diligence and met by video conference on a number of occasions to discuss diligence matters. On April 8, 2024 and April 9, 2024, representatives of Ambac, Moelis, Oaktree and BlackRock met by video conference to discuss a number of diligence matters, including relating to the Ambac UK investment portfolio and the AAC insured portfolio. Following those discussions, on April 9, 2024, Ambac, Moelis, Oaktree, BlackRock and an accounting advisor to Oaktree (the “Oaktree Accounting Advisor”), met by video conference to discuss diligence of the Ambac UK insured portfolio. On April 9, 2024, Mr. LeBlanc met with Mr. Share and Mr. Rozov to discuss updates regarding the diligence process and the transition services agreement (the “Transition Services Agreement”).

On April 10, 2024, representatives of Ambac, Moelis and Oaktree met over video conference to discuss AAC’s investment guidelines. Ambac, Moelis, Oaktree, BlackRock and the Oaktree Accounting Advisor also met over video conference that day to discuss diligence of the AAC investment portfolio.

On April 11, 2024, representatives of Ambac, Moelis, Oaktree, the Oaktree Accounting Advisor, Kirkland and Sidley Austin LLP, Ambac’s tax advisor (“Sidley”), met over video conference to discuss diligence of tax matters. That day, Ambac, Moelis, Oaktree, BlackRock and the Oaktree Accounting Advisor also met over separate video conference calls to discuss a credit-by-credit analysis of the Ambac UK insured portfolio. On April 12, 2024, Ambac, Moelis, Oaktree and the Oaktree Accounting Advisor met over video conference to discuss Ambac’s organizational structure and accounting matters. On the same day, BlackRock had a call with Ambac and Moelis to discuss credit-by-credit analysis of the AAC insured portfolio.

On April 15, 2024, representatives of Ambac, Moelis, Oaktree and BlackRock met over video conference to discuss further a credit-by-credit analysis of the AAC insured portfolio. On the same day, members of Ambac senior management and representatives of Oaktree had a lunch meeting at which they discussed the dynamics of the Potential Transaction.

On April 16, 2024, representatives of Ambac, Moelis, Oaktree and the Oaktree Accounting Advisor met over video conference to further discuss Ambac’s organizational structure and accounting matters. Ambac, Moelis, Oaktree and BlackRock also met over video conference for a general diligence discussion on the mechanics of commutations.

On April 17, 2024, representatives of Ambac, Moelis, The Brattle Group, a consultant retained in connection with the development of AAC’s operating model, and Oaktree met over video conference for a diligence discussion on AAC’s operating model.

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On April 18, 2024, representatives of Ambac, Moelis, Oaktree, the Oaktree Accounting Advisor, Kirkland and Sidley met over video conference to discuss diligence of tax matters.

On April 19, 2024, Ambac, Moelis, Oaktree and BlackRock met over video conference for a general diligence discussion on Ambac UK subrogation. On the same day, Mr. LeBlanc met with Mr. Share and Mr. Rozov at Ambac’s offices to discuss a range of matters relating to the Sale, including ongoing litigation, operational, employee and real estate matters, and to introduce David Barranco, who is expected to continue as an AAC employee following the Closing of the Sale.

On April 24, 2024, representatives of Ambac, Moelis, Oaktree and BlackRock met by video conference for a general diligence discussion relating to modeling and the treatment of subrogation. On the same day, Oaktree submitted a letter to Ambac pursuant to the Exclusivity Agreement, confirming that it would proceed with the Sale. Oaktree also provided its initial comments to the draft Purchase Agreement, which added a provision on “burdensome conditions,” and a draft of its business plan for AAC.

On April 26, 2024, representatives of Ambac, Moelis and Oaktree met by video conference to discuss AFS and net cash flows between Ambac and AAC. On a separate video conference, representatives of Ambac, Moelis and Oaktree met for an initial discussion of the Transition Services Agreement. That day, Mr. LeBlanc had a video conference with Mr. Share and Mr. Rozov to discuss the Transition Services Agreement and early drafts of other transaction documents, including the business plan, Purchase Agreement and clauses of the Purchase Agreement relating to burdensome conditions.

On April 29, 2024, representatives of Ambac, Moelis and Oaktree met over video conference for a diligence session regarding Ambac’s M&A pipeline.

On April 30, 2024, Mr. LeBlanc met with Mr. Share and Mr. Rozov to discuss the Transition Services Agreement, transaction process timeline and timing of the response from the Ambac Board and the board approval process. On the same day, Ambac, Moelis, Oaktree, Quinn Emanuel and Kirkland met by video conference for a further diligence discussion. In addition, Debevoise sent an issues list on the Purchase Agreement and comments to the burdensome condition provisions to Kirkland. The next day, Debevoise and Kirkland met to discuss the burdensome conditions provisions and the issues list.

On May 1, 2024, representatives of Moelis met with representatives of Oaktree over a video conference for a discussion of the status of the potential transaction. The next day, on May 2, 2024, also over a video conference, representatives of Ambac, Moelis, Oaktree and BlackRock met for a diligence discussion relating to U.S. military housing bonds, which is AAC’s largest concentration of non-municipal bonds. On May 3, 2024, representatives of Ambac, Moelis, Oaktree and the Oaktree Accounting Advisor met over video conference to discuss diligence of tax matters.

On May 2, 2024, the Ambac Board met to discuss the burdensome conditions provisions negotiated by Kirkland and Debevoise and to get an update on the discussions with Oaktree. Kirkland returned drafts of the burdensome conditions provisions to Debevoise, and Debevoise provided comments to Oaktree’s business plan to Kirkland.

On May 3, 2024, representatives of Ambac, Moelis, Oaktree and Kirkland met by video conference for a diligence discussion of legal matters and Debevoise provided additional comments on the burdensome conditions provision.

On May 5 and May 6, 2024, Debevoise provided a revised draft of the burdensome conditions provisions to Kirkland, reflecting additional negotiations between Debevoise, Kirkland, Ambac and Oaktree.

On May 6, 2024, representatives of Ambac, Moelis, Oaktree, Kirkland and Debevoise met over video conference to discuss the terms of the Purchase Agreement, the proposed Oaktree affiliate agreements and the AAC co-investment mechanism. Ambac also provided an update on AAC’s outstanding litigation.

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On May 7, 2024, representatives of Ambac, Moelis, Oaktree and the Oaktree Accounting Advisor met over a video conference for a discussion of diligence relating to Ambac UK tax. On the same day, representatives of Ambac, Moelis, Oaktree and Kirkland met over video conference to continue their discussion of general legal diligence matters. In addition, Mr. LeBlanc met with Mr. Share and Mr. Rozov to discuss the Ambac Board’s decision to move forward with respect to the burdensome conditions provisions and the next steps regarding the potential transaction.

On May 8, 2024, representatives of Ambac, Moelis, Oaktree and Kirkland met for a diligence discussion regarding Ambac UK’s regulatory relationships and regulatory capital. The same day, Debevoise confirmed to Kirkland in an email that Ambac was willing to extend the exclusivity period and the exclusivity agreement.

On May 14, 2024, representatives of Ambac, Moelis and Oaktree met over dinner to discuss the general deal dynamics. The next day, on May 15, 2024, representatives of Ambac, Moelis and Oaktree met over video conference to discuss diligence relating to Ambac UK’s Q1 Solvency II capital model.

On May 16, 2024, representatives of Ambac, Moelis, Oaktree and BlackRock met over video conference for a diligence discussion relating to AAC’s U.S. military housing bonds. On May 16, 2024, Mr. LeBlanc had a telephone call with the Party A Representative in which he advised Party A Representative that Ambac was subject to exclusivity and for that reason had not engaged, and could not engage at the time, with Party A.

On May 17, 2024, Debevoise sent a revised draft of the Purchase Agreement to Kirkland, which, among other things, included comments to the representations and warranties and the interim operating covenants.

On May 20, 2024, representatives of Ambac, Moelis and Oaktree met for a diligence discussion with respect to AAC’s projections for regulatory filings.

On May 20, 2024, representatives of Ambac, Moelis, Oaktree and BlackRock met by video conference to continue discussing diligence matters relating to AAC’s U.S. military housing bonds.

On May 21, 2024, Mr. LeBlanc met with Mr. Share over video conference to discuss the status of the potential transaction, the Transition Services Agreement and the long-term incentive program (“LTIP”), management employment contracts, and the presentation to the OCI.

On May 22, 2024, representatives of Ambac, Moelis and Oaktree met over video conference for a discussion on diligence relating to Ambac UK’s projections for regulatory filings.

On May 22, 2024, representatives from Kirkland and Debevoise met to discuss and negotiate the terms of the Purchase Agreement, including terms relating to employee matters, including the LTIP and employment agreements, the Transition Services Agreement, expense reimbursement, the timing of the filing of this proxy statement and the timing of Closing. On May 25, 2024, Kirkland and Debevoise met to discuss the progress that had been made on the issues discussed on the call on May 22, 2024.

On May 28, 2024, representatives of Ambac, Moelis, Oaktree and the Oaktree Accounting Advisor met over video conference to discuss diligence of tax matters. That day, Mr. LeBlanc met with Mr. Share and Mr. Rozov to discuss the introductory call with the OCI, the timing of Closing of the Sale, the Transition Services Agreement, the Warrant and Investment Management agreements, and the timing of representation and warranty insurance. Following the discussion, representatives of Ambac and Oaktree met with Dan Schwartzer, AAC’s consultant regarding interactions with the OCI.

On May 29, 2024, representatives of Ambac and Oaktree had an introductory meeting, over video conference, with the OCI. During the meeting, Mr. Share and Mr. Rozov provided overviews of their backgrounds and relevant experience. Mr. LeBlanc expressed the view that Oaktree would be good stewards of AAC, with well-

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qualified leadership provided by Messrs. Share and Rozov, and continuation of day-to-day management of the business by current AAC officers who would remain with the business post-Closing. Mr. Share described where AAC would fit within Oaktree’s organizational structure, the time horizon he envisioned for Oaktree’s investment, and Oaktree’s general plans for the LFG Insurance business, which include a continuation of the run-off, growing surplus over time, proactive liability management, reducing expenses and optimizing investment returns.

On May 29, 2024, Kirkland sent Debevoise a revised draft of the Purchase Agreement, which included comments on the treatment of equity awards and other employee matters, the representations and warranties and the interim operating covenants, among other open points.

On May 29, 2024, representatives of Ambac, Moelis, Oaktree, Kirkland and Debevoise met by video conference for a diligence discussion regarding the treatment of LTIP.

On May 30, 2024, representatives of Ambac, Moelis, Oaktree and the Oaktree Accounting Advisor met over video conference for a diligence discussion regarding AAC and Ambac UK’s operating expenses and opportunities for cost savings. Oaktree also met with senior executives of AAC. Debevoise provided Kirkland with a revised draft of the Purchase Agreement.

On May 31, 2024, the Ambac Board held a special meeting, at which all of the directors of the Ambac Board were in attendance, to discuss the terms of the Sale and the timing of the signing. Debevoise presented to the Ambac Board on the status of the Purchase Agreement and the Warrant. Moelis reviewed its preliminary financial analyses with respect to AAC and the Sale with the Ambac Board. Representatives of Kirkland and Debevoise met over video conference to discuss tax considerations relevant to the transaction. Kirkland sent Debevoise a revised draft of the Purchase Agreement, with some incremental edits being received later in the day.

On June 1, 2024, representatives of Ambac, Moelis, Oaktree, Kirkland and Debevoise met over video conference to negotiate the remaining terms of the Sale, including terms related to employee matters, leases, certain company payments between signing and closing, the conduct of the LFG Insurance business between signing and Closing, tax considerations relevant to the transaction, the termination fee, expenses reimbursement and the terms of the Warrant. Mr. LeBlanc had a telephone call with Mr. Share to discuss the status of the transaction and the remaining key transaction terms to be agreed upon.

Beginning early in the morning on June 2, 2024, Ambac, Moelis, Oaktree, Kirkland, Debevoise and the Oaktree Accounting Advisor met by video conference to negotiate remaining terms of the Sale. Following that meeting, representatives of Kirkland, Debevoise, the Oaktree Accounting Advisor, Moelis and Ambac held a tax diligence call by video conference. In the early afternoon on June 2, 2024, Ambac, Moelis, Oaktree, Kirkland and Debevoise met again to negotiate final remaining deal terms, including terms related to employee matters, leases, certain company payments between signing and closing, the conduct of the LFG Insurance business between signing and Closing and tax considerations relevant to the transaction and the terms of the Warrant and the Investor Rights Agreement.

On June 3, 2024, Mr. LeBlanc and Mr. Share had a telephone call to discuss the transaction timeline. Later the same day, Mr. LeBlanc and Mr. Share had a telephone call to discuss the status of the transaction and to confirm the date of signing. That day, representatives of Ambac, Moelis and Oaktree met by video conference to discuss Ambac’s go-forward business strategy.

On June 3, 2024, representatives of Kirkland and Debevoise met over video conference to negotiate the remaining terms of the Purchase Agreement and other transaction documents.

On June 3, 2024, the Ambac Board held a special meeting, at which all of the directors of the Ambac Board were in attendance. Debevoise presented to the Ambac Board on the status of the Purchase Agreement and other

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transaction documents, including the Warrant and the Investor Rights Agreement. Moelis then reviewed and discussed its financial analyses with respect to AAC and the Sale. At the request of the Ambac Board, Moelis rendered its oral opinion on June 3, 2024 to the Ambac Board (which was subsequently confirmed in writing by delivery of Moelis’s written opinion addressed to the Ambac Board dated the same date) as to, as of June 3, 2024 and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in the opinion, the fairness, from a financial point of view, to Ambac of the Consideration to be received by Ambac in the Sale pursuant to the Purchase Agreement. Following the presentations by Ambac’s advisors, the Ambac Board unanimously approved entering into the Purchase Agreement and other Transactions contemplated by the Purchase Agreement.

Late in the evening on June 4, 2024, representatives of Ambac, Moelis, Oaktree, Kirkland and Debevoise met by video conference to review the remaining terms of the Sale in the Purchase Agreement and the other transaction documents. The parties discussed the Warrant and the Investor Rights Agreement, reaching agreement on the form and substance of each before finalizing the remaining terms in the Purchase Agreement, including terms related to employee matters, including the LTIP, lease arrangements and the disclosure schedules.

In the early morning of June 5, 2024, after completing negotiations of the final remaining terms of the Sale, representatives from Kirkland and Debevoise prepared final drafts of the Purchase Agreement and the other transaction documents, which, under mutual agreement between Ambac and Oaktree were dated as of June 4, 2024. The parties finalized Ambac’s disclosure letters, and Ambac and Oaktree executed the Purchase Agreement.

Unaudited Prospective Financial Information

Ambac Financial Forecasts

Ambac does not as a matter of course make public projections as to future performance, revenues, earnings or other financial results given, among other reasons, the uncertainty of realizing the underlying assumptions and estimates. However, Ambac prepared certain unaudited prospective financial information relating to AAC (which we refer to as the “Ambac Financial Forecasts”) that was provided to the Ambac Board in connection with their evaluation of the Sale and to Moelis, financial advisor to Ambac, for purposes of its financial analyses and opinion described in the section of this proxy statement captioned “Proposal No. 1—The Sale Proposal—Opinion of Ambac’s Financial Advisor.” Select material line items for certain periods from the Ambac Financial Forecasts, as well as material operating assumptions underlying such forecasts, are set forth below.

The model used for the Ambac Financial Forecasts applies a series of risk factors against certain assets and liabilities of AAC to create a ratio of risk-adjusted assets to risk-adjusted liabilities:

The Ambac Financial Forecasts were prepared based on the following key forecast assumptions, which represented management’s base case run-off assumptions for AAC and Ambac UK:

General

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Operating Expenses

Investment Portfolio Reinvestment Yields

Ambac UK Dividends

Surplus Note Distributions

AMPS Distributions

Common Equity Distributions

The inclusion of this information should not be regarded as an indication that any of Ambac, its affiliates, officers, directors, advisors or other representatives or any other recipient of this information considered, or now considers, it necessarily to be predictive of actual future results, or that it should be construed as financial guidance, and it should not be relied on as such. This information was prepared solely for internal use and is subjective in many respects.

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The following table sets forth the estimated amounts of total distributable cash of AAC, calculated using the above prospective financial assumptions as provided by and approved by Ambac management for use by Moelis for purposes of its financial analyses and opinion described in the section of this proxy statement captioned “Proposal No. 1—The Sale Proposal—Opinion of Ambac’s Financial Advisor” (amounts may reflect rounding):

Important Information About the Ambac Financial Forecasts

The Ambac Financial Forecasts provide summary unaudited prospective financial information for AAC. The Ambac Financial Forecasts were not prepared with a view toward public disclosure and the inclusion of such Ambac Financial Forecasts should not be regarded as an indication Ambac, or any other recipient of this information, considered, or now considers, it to be necessarily predictive of actual future results.

While presented with numeric specificity, the Ambac Financial Forecasts were not prepared for purposes of public disclosure, nor were they prepared on a basis designed to comply with accounting principles generally accepted in the United States (“GAAP”) published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of projections. However, in the view of Ambac management, the Ambac Financial Forecasts were prepared on a reasonable basis, and reflected the best estimates and judgments available at the time the Ambac Financial Forecasts were prepared, and present, to the best of Ambac management’s knowledge and belief, the expected course of action and the expected future financial performance of AAC. Neither Ambac’s independent registered public accounting firm nor any other independent accountants, compiled, examined or performed any procedures with respect to the Ambac Financial Forecasts summarized above, and has not expressed any opinion or any other form of assurance on this information or its achievability, and assumes no responsibility for, and disclaims any association with, the Ambac Financial Forecasts. The reports of the independent registered public accounting firm incorporated by reference in this proxy statement relate to historical financial statements. They do not extend to any financial projections and should not be seen to do so.

The Ambac Financial Forecasts were prepared in accordance with variables, estimates, and assumptions that are inherently uncertain and may be beyond the control of Ambac, and which may prove not to have been, or to no longer be, accurate. While in the view of Ambac management the Ambac Financial Forecasts were prepared on a reasonable basis, the Ambac Financial Forecasts are subject to many risks and uncertainties. Important factors that may affect actual results and cause actual results to differ materially from the Ambac Financial Forecasts include risks and uncertainties relating to Ambac’s businesses, industry performance, the regulatory environment, general business and economic conditions, market and financial conditions, various risks set forth

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in Ambac’s reports filed with the SEC, and other factors described or referenced in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” of this proxy statement.

The Ambac Financial Forecasts also reflect assumptions that are subject to change and are susceptible to multiple interpretations and to conditions, transactions or events that may occur and were not anticipated at the time the Ambac Financial Forecasts were prepared. In addition, the Ambac Financial Forecasts do not take into account any circumstances, transactions or events occurring after the date the Ambac Financial Forecasts were prepared. Accordingly, actual results will likely differ, and may differ materially, from those contained in the Ambac Financial Forecasts. We do not assure you that the financial results in the Ambac Financial Forecasts set forth above will be realized or that future financial results of AAC will not materially vary from those in the Ambac Financial Forecasts.

None of Ambac, or its affiliates, officers, directors, or other representatives gives any stockholder of Ambac, or any other person, any assurance that actual results will not differ materially from the Ambac Financial Forecasts, and, except as otherwise required by law, none of them undertakes any obligation to update or otherwise revise or reconcile the Ambac Financial Forecasts to reflect circumstances after the date the Ambac Financial Forecasts were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions and estimates underlying the Ambac Financial Forecasts are shown to be in error.

No one has made or makes any representation to any stockholder of Ambac, or anyone else regarding, nor assumes any responsibility for the validity, reasonableness, accuracy, or completeness of, the Ambac Financial Forecasts set forth above. You are cautioned not to rely on the Ambac Financial Forecasts. The inclusion of this information should not be regarded as an indication that the Ambac Board any of its advisors or any other person considered, or now considers, it to be material or to be a reliable prediction of actual future results.

The Ambac Financial Forecasts included above cover multiple years, and this information by its nature becomes subject to greater uncertainty with each successive year. The Ambac Financial Forecasts should be evaluated, if at all, in conjunction with the historical financial statements and other information contained in Ambac’s respective public filings with the SEC.

Due to the forward-looking nature of the Ambac Financial Forecasts, specific quantifications of the amounts that would be required to reconcile any non-GAAP measures presented to GAAP measures are not available. Ambac believes that there is a degree of volatility with respect to certain GAAP measures, and certain adjustments made to arrive at the relevant non-GAAP measures, which preclude Ambac from providing accurate forecasted non-GAAP to GAAP reconciliations.

Recommendation of the Ambac Board and Its Reasons for the Sale

The Ambac Board, with the assistance of Ambac’s outside legal counsel and financial advisor, evaluated the terms and conditions of the Sale as contemplated by the Purchase Agreement. After careful consideration, the Ambac Board, in a meeting held on June 3, 2024, (i) unanimously determined that the Transactions contemplated by the Purchase Agreement, including the Sale, are advisable, fair to and in the best interests of Ambac and our stockholders, (ii) unanimously authorized, adopted and approved the Purchase Agreement and the Sale as contemplated thereby and (iii) unanimously recommended that you vote “FOR” the Sale Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.

As described above in the section of this proxy statement entitled “Proposal No. 1—The Sale Proposal—Background of the Sale,” prior to and in reaching its determination to approve the Sale, the Ambac Board consulted with and received the advice of Ambac’s financial advisors and outside legal counsel, discussed certain issues with Ambac’s management and considered a variety of factors weighing positively in favor of the

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Purchase Agreement and the Sale, each of which the directors believed supported their decision, including the following material factors:

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In the course of its deliberations, the Ambac Board also considered a variety of risks and countervailing factors related to the Purchase Agreement and the Sale, including the following material factors:

The foregoing discussion of the factors considered by the Ambac Board is not intended to be exhaustive, but rather includes the material factors considered by the Ambac Board. The Ambac Board collectively reached the conclusion to approve the Purchase Agreement and deem the Purchase Agreement, the Sale and the other Transactions contemplated by the Purchase Agreement to be advisable and in the best interests of Ambac, in light of the various factors described above and other factors that the members of the Ambac Board believed were appropriate. In view of the wide variety of factors considered by the Ambac Board in connection with its evaluation of the Transactions and the complexity of these matters, the Ambac Board did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the Ambac Board. Rather, the Ambac Board made its recommendation based on the totality of the information available to the Ambac Board, including discussions with, and questioning of, Ambac’s management, its financial advisors and the legal advisors. In considering the factors discussed above, individual members of the Ambac Board may have given different weights to different factors.

This explanation of the Ambac Board’s reasons for recommending the approval of the Purchase Agreement and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors described in the section of this proxy statement entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 17.

Use of Proceeds

Following receipt of the Required Stockholder Approval in favor of the Sale Proposal at the special meeting, and subject to the satisfaction of the other conditions to Closing under the Purchase Agreement, the Sale of AAC is expected to close during the fourth quarter of 2024 or the first quarter of 2025. Ambac intends to utilize the proceeds from the Sale (i) to repay all or a portion of the Acquisition Funding, (ii) to pay costs and expenses related to the Sale, (iii) to implement the Share Repurchase Program and (iv) for general corporate purposes, including without limitation, acquisitions consistent with Ambac’s Specialty Property and Casualty Insurance and Insurance Distribution strategies, which remain our primary source of value creation. Following the

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execution of the Share Repurchase Program, we will evaluate authorizing additional capital return activities measured against other capital deployment opportunities and based on market conditions.

Ambac’s stockholders may indirectly receive proceeds pursuant to the Share Repurchase Program, however, they will not directly receive any proceeds from the Sale.

Opinion of Ambac’s Financial Advisor

At the meeting of the Ambac Board on June 3, 2024 to evaluate and approve the Transactions contemplated by the Purchase Agreement, Moelis delivered an oral opinion, which was confirmed by delivery of a written opinion, dated June 3, 2024, addressed to the Ambac Board to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in the opinion, the Consideration to be received in the Sale by Ambac was fair, from a financial point of view, to Ambac.

The full text of Moelis’s written opinion dated June 3, 2024, which sets forth the assumptions made, procedures followed, matters considered, and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement and is incorporated herein by reference. Moelis’s opinion was provided for the use and benefit of the Ambac Board (in its capacity as such) in its evaluation of the Sale. Moelis’s opinion was limited solely to the fairness, from a financial point of view, to Ambac of the Consideration to be received by Ambac in the Sale, and does not address Ambac’s underlying business decision to engage in the transactions contemplated by the Purchase Agreement or the relative merits thereof as compared to any alternative business strategies or transactions that might be available with respect to Ambac or AAC. Moelis’s opinion does not constitute a recommendation to any stockholder of Ambac as to how such stockholder should vote or act with respect to the transactions contemplated by the Purchase Agreement or any other matter. Moelis’s opinion was approved by a Moelis fairness opinion committee.

In arriving at its opinion, Moelis, among other things:

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In connection with its review, with the consent of the Ambac Board, Moelis relied on the information supplied to, discussed with or reviewed by it for purposes of its opinion being complete and accurate in all material respects. Moelis did not assume any responsibility for independent verification of, and Moelis did not independently verify, any of such information. Moelis also relied on the representations of Ambac’s and AAC’s managements that they are not aware of any facts or circumstances that would make any such information inaccurate or misleading. With the consent of the Ambac Board, Moelis relied upon, without independent verification, the assessments of Ambac and AAC and their legal, tax, regulatory, actuarial and accounting advisors with respect to legal, tax, regulatory, actuarial and accounting matters. With respect to the financial forecasts referred to above, Moelis assumed, at the direction of the Ambac Board, that they had been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the managements of Ambac and AAC as to the future performance of AAC. At the direction of the Ambac Board, Moelis assumed that such financial forecasts were a reasonable basis upon which to evaluate AAC and the Transactions, and at the direction of the Ambac Board, Moelis relied upon the financial forecasts for purposes of its analyses and opinion. Moelis expressed no views as to the reasonableness of any financial forecasts or the assumptions on which they are based. In that regard, Moelis assumed that all payments and distributions projected in the financial forecasts to be paid in respect of AAC’s surplus notes and capital (including the auction market preferred securities and common equity of AAC) would be paid when so projected and no impediment or delay to any such payment or distribution (regulatory or otherwise) would be imposed that would be material to Moelis’s analysis or opinion. In addition, with the consent of the Ambac Board, Moelis did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet, or otherwise) of AAC, nor was Moelis furnished with any such evaluation or appraisal. With respect to outstanding litigation involving AAC, Moelis relied upon, at the direction of the Ambac Board, the assessments of Ambac’s management and counsel. Moelis further assumed that any adjustment to the Consideration, whether pursuant to the Purchase Agreement or otherwise, would not be material to Moelis’s analysis or opinion.

Moelis’s opinion did not address Ambac’s underlying business decision to effect the Transactions or the relative merits of the Transactions as compared to any alternative business strategies or transactions that might be available to Ambac and did not address any legal, regulatory, tax or accounting matters. Moelis is not an actuary and its services did not include actuarial determinations or evaluations by Moelis or an attempt to evaluate actuarial assumptions. Moelis made no analyses of, and expresses no opinion as to, the adequacy of the policy and other insurance reserves of AAC and relied upon information furnished to it by Ambac and AAC as to such adequacy. At the direction of the Ambac Board, Moelis was not asked to, nor did it, offer any opinion as to any terms of the Purchase Agreement or the Warrant or any aspect or implication of the Transactions, except for the fairness of the Consideration from a financial point of view to Ambac. Moelis expressed no view or opinion regarding the terms of any financing that may be made available to Ambac by Buyer or its affiliates. In addition, Moelis’s opinion did not in any manner address the prices at which Ambac Common Stock would trade following consummation of the Transactions or at any time. Moelis did not express any opinion as to fair value or the solvency of Ambac following the closing of the Sale. In rendering its opinion, Moelis assumed, at the direction of the Ambac Board, that the final executed form of the Purchase Agreement would not differ in any material respect from the draft that it had reviewed, that the Transactions would be consummated in accordance with its terms without any waiver or modification that could be material to Moelis’s analysis, that the representations and warranties of each party set forth in the Purchase Agreement are accurate and correct and that the parties to the Purchase Agreement would comply with all of the material terms of the Purchase Agreement. Moelis assumed, with the consent of the Ambac Board, that all governmental, regulatory or other consents or approvals necessary for the completion of the Sale would be obtained, except to the extent that could not be material to its analysis.

Moelis’s opinion was necessarily based on economic, monetary, market, and other conditions as in effect on, and the information made available to Moelis as of, the date of the opinion and Moelis assumed no responsibility to update its opinion for developments occurring or coming to its attention after the date thereof. With the approval of the Ambac Board, in evaluating the fairness from a financial point of view of the Consideration to be received by Ambac, Moelis treated the Sale and the issuance of the Warrant as a single integrated transaction.

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Moelis’s opinion did not address the fairness of the Transactions or any aspect or implication thereof to, or any other consideration of or relating to, the holders of any class of securities, creditors or other constituencies of Ambac. In addition, Moelis did not express any opinion as to the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any parties to the Transactions, or any class of such persons, relative to the Consideration or otherwise.

This summary of financial analyses is not a complete description of Moelis’s opinion or the analyses underlying, and factors considered in connection with, Moelis’s opinion. The preparation of a fairness opinion is a complex analytical process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Moelis’s opinion. In arriving at its fairness determination, Moelis considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis. Rather, Moelis made its fairness determination on the basis of its experience and professional judgment after considering the results of all of its analyses.

No company used in the analyses described below is identical to AAC. In addition, such analyses do not purport to be appraisals, nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by such analyses. Because the analyses described below (including much of the information used therein) are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, neither Ambac nor Moelis or any other person assumes responsibility if future results are materially different from those forecasts.

The Consideration was determined through arms’ length negotiations between Ambac and Buyer, and was approved by the Ambac Board. Moelis did not recommend any specific consideration to Ambac or the Ambac Board, or that any specific amount or type of consideration constituted the only appropriate consideration to be paid in the Transactions.

Summary of Financial Analyses

The following is a summary of the material financial analyses prepared by Moelis in connection with its opinion to the Ambac Board at a meeting held on June 3, 2024. This summary describes the material analysis underlying Moelis’s opinion but does not purport to be a complete description of the analyses performed by Moelis in connection with its opinion.

Some of the summaries of financial analyses below include information presented in tabular format. In order to fully understand Moelis’s analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analyses. Considering the data described below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Moelis’s analyses.

For purposes of its financial analyses, Moelis compared the illustrative value ranges indicated by its separate analyses with the value of the Consideration as adjusted to account for the issuance of the Warrant (the “Adjusted Consideration”). Moelis applied a Black-Scholes model, using its professional judgment and experience, and based on assumptions for, among others, the strike price and tenor of the Warrant, an estimated risk-free rate and the volatility associated with the share price of Ambac Common Stock, to estimate an implied value range for the Warrant of $25,000,000 to $35,000,000. Consequently, Moelis calculated an implied value range for the Adjusted Consideration by deducting this range of values for the Warrant from the $420,000,000 base purchase price in the Sale.

In addition, for certain of its financial analyses, Moelis reviewed estimates of certain financial metrics for AAC and certain other companies discussed below. Estimates for these metrics reviewed by Moelis were (i) for AAC,

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provided by the managements of Ambac and AAC and (ii) for the other companies, based on public filings and other publicly available information. These metrics included:

Dividend Discount Model Analysis

Moelis performed a dividend discount model analysis of AAC using Ambac’s projections and other information and data provided by Ambac to calculate the estimated present value as of March 31, 2024 of the future dividends that could be potentially distributed by AAC to Ambac from March 31, 2024 through the end of the AAC’s business in 2053, as projected by Ambac management and reflected in Ambac’s projections.

Moelis utilized a range of discount rates of 13.75% to 20.0% based on an estimated range of AAC’s cost of equity. The estimated cost of equity range was derived using the Capital Asset Pricing Model using a (i) risk free rate based on 20-year U.S. government bonds, (ii) a selected range of unlevered betas informed by the selected publicly traded companies described below, (iii) a selected range of debt to equity ratios informed by the selected publicly traded companies described below, including Ambac, (iv) an equity risk premium and (v) a size premium based on publicly traded companies with similar equity values to AAC. Moelis used the foregoing range of discount rates to calculate the estimated present values as of March 31, 2024 of AAC’s future projected dividends.

Based upon the foregoing, this analysis implied the following equity value range for AAC, as compared to the Adjusted Consideration:

Selected Precedent Transactions Analysis

Moelis performed a selected precedent transactions analysis with respect to AAC. For this analysis, Moelis reviewed financial information relating to selected transactions that (i) involved full acquisitions of monoline insurance companies operating in the United States or United Kingdom and (ii) had been announced since January 1, 2014.

Moelis reviewed, among other things, to the extent information was publicly available, transaction values implied in the selected transactions as multiples of Adjusted Book Value, Adjusted Statutory Book Value and Tangible Book Value, in each case based on financial and certain other data for the target companies derived from public filings and other publicly available information at the time of announcement of the relevant transaction.

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The selected transactions and their corresponding multiples were:

Moelis selected reference ranges for its selected precedent transactions analysis based on Moelis’s professional judgment and experience and informed by its view that, while AAC should generally be expected to be valued at a premium to the FGIC UK business, the selected ranges should focus on the lower portion of the overall ranges in part due to AAC’s highly levered capital structure and its inability to make distributions to its equity in the near term. Moelis applied the following ranges of selected multiples derived from the selected precedent transactions of 0.30x to 0.65x to Ambac’s estimate of AAC’s Adjusted Book Value; 0.55x to 0.75x to Ambac’s estimate of AAC’s Adjusted Statutory Book Value; and 0.35x to 0.70x to Ambac’s estimate of AAC’s Tangible Book Value.

Based upon the foregoing, this analysis implied the following equity value range for AAC, as compared to the Adjusted Consideration:

Selected Publicly Traded Companies Analysis

Moelis performed a selected publicly traded companies analysis of AAC. For this analysis, Moelis reviewed financial and stock market information of the selected publicly traded companies noted below that are publicly traded monoline financial guarantee companies. Moelis noted that comparability of these selected publicly traded companies with AAC was limited in part due to, among other factors, AAC’s inability to make distributions to its equity in the near term.

Moelis reviewed, among other things, equity market capitalizations of the selected publicly traded companies as multiples of Adjusted Book Value, Adjusted Statutory Book Value and Tangible Book Value, in each case based on financial and certain other data for the selected companies derived from public filings and other publicly available information. Equity market capitalizations used in the selected publicly traded companies analyses were calculated using the market prices of the common stock of the selected publicly traded companies as of May 31, 2024.

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The selected publicly traded companies and their corresponding multiples were:

Moelis selected reference ranges for its selected publicly traded companies analysis based on Moelis’s professional judgment and experience and informed by its view that the selected ranges should focus on the lower portion of the overall ranges for the selected publicly traded companies in part due to AAC’s inability to make distributions to its equity in the near term. Moelis noted that, while Assured Guaranty Ltd. and MBIA Inc. were the most relevant companies for this analysis, Assured Guaranty Ltd. is rated and continues to write new policies and MBIA Inc.’s main insurance subsidiary, National Public Finance Guarantee Corporation, is unlevered and actively distributing capital to MBIA Inc. Moelis applied the following ranges of selected multiples derived from the selected publicly traded companies of 0.40x to 0.50x to Ambac’s estimate of AAC’s Adjusted Book Value; 0.30x to 0.60x to Ambac’s estimate of AAC’s Adjusted Statutory Book Value; and 0.55x to 0.70x to Ambac’s estimate of AAC’s Tangible Book Value.

Based upon the foregoing, this analysis implied the following equity value range for AAC, as compared to the Adjusted Consideration:

Miscellaneous

Moelis acted as financial advisor to Ambac in connection with the Transactions and will receive transaction fees of (i) an amount, currently expected to be approximately $6,300,000, upon the closing of the Sale, plus (ii) an amount up to an additional $2,250,000, based on the amount of proceeds that may be received from or committed in any loan facility with Oaktree, upon the closing of such facility, against which Ambac may credit $675,000 on account of advisory fees previously paid. Moelis also became entitled to receive a fee of $1,300,000 upon having substantially completed its work in connection with rendering its opinion (regardless of the conclusions reached in Moelis’s opinion). In addition, Ambac agreed to indemnify Moelis and certain related persons and entities for certain liabilities, including liabilities under the federal securities laws, arising out of its engagement.

Moelis’ affiliates, employees, officers and partners may at any time own securities or other interests (long or short) in Ambac and affiliates of Buyer (including affiliates and portfolio companies of Oaktree and Brookfield Asset Management (“Brookfield”)). Moelis provided investment banking and other services to Ambac and affiliates of Buyer (including affiliates and portfolio companies of Oaktree and Brookfield) unrelated to the Sale and currently provide and in the future may provide such services to Ambac, Buyer and their respective affiliates (including affiliates and portfolio companies of Oaktree and Brookfield), and have received and may receive compensation for such services. In the past two years prior to its opinion, Moelis acted as, among other things,

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(i) financial advisor to legal counsel to Ambac in connection with Puerto Rico’s bankruptcy, which assignment was completed in June 2022; (ii) financial advisor to an affiliate of Brookfield in connection with its acquisition of Cyxtera Technologies, Inc. that closed in January 2024; (iii) financial advisor to legal counsel to Oaktree in connection with a debtor’s out of court restructuring, which assignment was completed in May 2024; (iv) financial advisor to an affiliate of Brookfield in connection with an acquisition of a company that closed in December 2023; (v) financial advisor to Boardriders, Inc., a portfolio company of Oaktree, in connection with its sale to Authentic Brands Group that closed in September 2023; (vi) placement agent to WHP Global, an affiliate of Oaktree, in connection with an equity investment from Ares Management Corporation that closed in March 2023; and (vii) financial advisor to Sterling Site Access Solutions, LLC, an affiliate of Oaktree, in connection with its sale to Blue Wolf Capital Partners LLC that closed in February 2023. During the two-year period prior to the date of Moelis’s opinion, Moelis received fees for investment banking services of (x) approximately $24,000,000 from Ambac and its affiliates (including the portion of fees paid prior to such two-year period relating to the assignment referred to in clause (i) of the preceding sentence) and (y) approximately $54,000,000 from affiliates of Buyer, including Oaktree and Brookfield and their respective affiliates and portfolio companies. In addition, an advisor retained by Oaktree in connection with the Transactions was a managing director at Moelis from 2009 to 2019. The Ambac Board selected Moelis as its financial advisor in connection with the Transactions because Moelis has substantial experience in similar transactions and familiarity with Ambac. Moelis is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, strategic transactions, corporate restructurings, and valuations for corporate and other purposes.

Activities of Ambac Following the Sale

We are committed to maximizing long-term shareholder value through prudent capital management. As a growth company in specialty property and casualty insurance, we continue to seek to build value through acquisitions and development of de novo businesses. When considering new opportunities, we evaluate the expected long-term value creation associated with the deployment of capital in new businesses compared to the return of capital to our shareholders.

Following the completion of the Sale, Ambac will continue to operate the Retained Business. Ambac’s primary goal is to maximize long-term stockholder value through the execution of targeted strategies for the Retained Business. The strategic priorities of the Specialty Property and Casualty Insurance and Insurance Distribution businesses include:

Ambac will continue to be a public company operating under the name Ambac Financial Group, Inc., and will continue to own the assets and liabilities which comprise the Retained Business. At this time, it is contemplated that, immediately following Closing, Ambac will maintain the same corporate functions and the same senior executives as Ambac had prior to the completion of the Sale, other than Messrs. Barranco and Eisman, who are expected to transfer with AAC to Buyer, and the same board of directors that will be in place following the conclusion of Ambac’s 2024 Annual Meeting of Stockholders. As of immediately following the Closing, all of Ambac’s revenues will be generated by the Retained Business. For additional information, see the section of this proxy statement entitled “Preliminary Unaudited Pro Forma Combined Financial Information” beginning on page 74.

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Warrant

In connection with and pursuant to the Purchase Agreement, at the Closing of the Sale, Ambac has agreed to issue to Investor the Warrant, which is exercisable for the Warrant Shares. The Warrant will have an exercise price per share of $18.50 with a six-and-a-half-year term from the date of issuance, and will be immediately exercisable. Payment of the exercise price may be settled, at Ambac’s option, by way of a cash exercise or by net share settlement. The Warrant and the Warrant Shares will be issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act and will not be registered under the Securities Act or any state securities law.

Under the terms of the Warrant, the Investor is subject to a lock-up period of six months from the date of issuance of the Warrant, pursuant to which the Investor may not, (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, the Warrant or the Warrant Shares, (2) engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined), which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned), or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of the Warrant or the Warrant Shares, whether any such transaction described in subsection (1) or (2) above is to be settled by delivery of Warrants, Warrant Shares, Common Stock, in cash or otherwise, or (3) publicly disclose the intention to do any of the foregoing. The transfer restriction does not restrict or prohibit (i) any total return swap entered into by the Investor or any direct or indirect affiliate of the Investor with respect to the Warrant or the Warrant Shares, (ii) any pledge under a margin loan and (iii) transfer of securities of the Investor or any entity that directly or indirectly owns equity securities of the Investor. In addition, prior to end of the lock-up period, the Investor may transfer the Warrant to affiliates (other than portfolio companies, competitors and activist investors) and to Brookfield Asset Management Inc. Following the expiration of the lock-up period, the Warrant and Warrant Shares are transferable to any person other than a competitor or activist investor.

Applying a Black-Scholes model and based on an exercise price of $18.50, a term of six-and-a-half years and an Ambac Common Stock price of $12.96 (the closing trading price on July 30, 2024) and a range of assumptions for, among others, an estimated risk-free rate and the volatility associated with the shares of Ambac Common Stock, as of July 30, 2024, we estimate an implied value range for the Warrant of $11,000,000 to $24,000,000. The Black-Scholes valuation of the Warrant will continue to fluctuate throughout the term of the Warrant, potentially significantly, based on Ambac’s then-current stock price, the applicable risk free rate, the implied volatility and other factors.

Investor Rights Agreement

In connection with and pursuant to the Purchase Agreement, at the Closing of the Sale, Ambac will enter into the Investor Rights Agreement, by and between Ambac and Investor. Capitalized terms used in this section titled “Investor Rights Agreement” shall have the meaning ascribed to them in the Investor Rights Agreement, attached hereto as Exhibit D to Annex A, to the extent not otherwise defined in this Proxy Statement. The Investor Rights Agreement provides for, among other things, (i) the grant to Investor of the right to designate one director to the Ambac Board, at any time following the date on which Investor has exercised the Warrant for more than 50% of the maximum number of Warrant Shares issuable pursuant to the Warrant and the Investor, together with its affiliates, beneficially owns at least 4% of the Ambac Common Stock and until the date of a Fallaway Event, (ii) the grant of limited registration rights (described further below), (iii) a standstill restriction on Investor that prohibits certain actions by Investor without the prior written approval of Ambac (described further below) and (iv) confidentiality and indemnification obligations.

Under the Investor Rights Agreement, Ambac has agreed to provide Investor with registration rights and to keep a shelf registration statement of Form S-3 or Form S-1 (the “Shelf Registration Statement”) effective until the

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earlier of (i) such time as there are no Warrant Shares remaining, (ii) after the occurrence of a Fallaway Event, Investor is able to sell the Warrant Shares pursuant to Rule 144 without limitation as to volume or manner of sale and (iii) Investor owns less than 25% of the Warrants and the Warrant Shares. In addition, Ambac has agreed to provide Investor with certain piggyback registration rights.

The Investor Rights Agreement also includes a standstill restriction that prohibits the Investor from (i) commencing or publicly proposing to commence any tender or exchange offer for securities of Ambac or publicly proposing to enter any merger, consolidation, business combination or acquisition or disposition of all or substantially all assets of Ambac, (ii) nominating for election, or seeking to elect a director other than as contemplated under the director nomination provisions of the Investor Rights Agreement, (iii) publicly proposing any recapitalization, restructuring, liquidation, dissolution or other similar extraordinary transaction with respect to Ambac; (iv) acquiring or publicly proposing to acquire, or any other right with respect to, equity securities of Ambac, in each case, to the extent the Investor would, after exercising the Warrant, collectively control greater than 9.9% of the total voting power of Ambac; (v) forming, joining or in any way participating in a “partnership, limited partnership, syndicate, or other group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) for purposes of acquiring, holding, voting or disposing of any Ambac securities; (vi) disposing of Ambac Common Stock in response to an unsolicited tender offer for Ambac securities or other proposed business combination to any Person making such an unsolicited tender offer or proposal or any of the Person’s affiliates, except as such is an Exempt Transfer; (vii) making any proposal for additional representation on the Ambac Board; or (viii) entering into any agreements with any third party with respect to taking any of the actions set forth in the foregoing clauses (i) through (vii); provided that, clauses (i) through (viii) are subject to certain exceptions.

The Investor Rights Agreement is not assignable or otherwise transferable by Investor.

Conditions to Closing of the Sale

The closing of the Sale is subject to customary closing conditions, including the receipt of specified regulatory approvals (described below) and the Required Stockholder Approval.

Interests of Ambac’s Directors and Executive Officers in the Sale

In considering the recommendation of the Ambac Board with respect to the Sale, Ambac stockholders should be aware that Ambac’s directors and executive officers have interests in the Sale, including financial interests, that may be different from, or in addition to, interests of the Ambac stockholders generally, including interests that could vary among our executive officers. The Ambac Board was aware of and considered these interests during its deliberations of the merits of the Sale and in determining to recommend to Ambac stockholders that they vote for the Sale Proposal and thereby approve the transactions contemplated by the Sale (to the extent such interests existed at that time). In connection with the Sale, two executive officers are expected to transfer with AAC to Buyer. Ambac does not currently expect any severance to be paid to such executive officers and Buyer will assume the risk of any acceleration of equity awards for such executive officers. Further, Ambac does not currently expect to terminate the employment of any remaining executive officers and Ambac is not aware of any contemplated resignations by such executive officers. The interests described below reflect what would happen if any such executive officers were to resign or be terminated according to the terms of the change in control features of the relevant employment agreements, Ambac’s Severance Pay Plan, Ambac’s Executive Stock Deferral Plan and Ambac’s 2020 Incentive Compensation Plan (including any award agreements granted thereunder). The Ambac Board and the compensation committee of the Ambac Board (the “Compensation Committee”) will retain authority to continue the outstanding equity awards of the remaining executive officers. See the section of this proxy statement entitled “Proposal No. 2—The Compensation Proposal” beginning on page 92 for additional information, including vesting schedules for outstanding equity awards and applicable amounts of outstanding cash awards and potential severance pay. In addition, the Ambac Board and the Compensation Committee will review overall executive compensation and may consider changes to align such compensation with Ambac’s go-forward business.

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These interests potentially include, among others:

Vesting or acceleration of equity compensation, which could be different for each executive officer

The Sale represents a “Change in Control” under Ambac’s 2020 Incentive Compensation Plan. Pursuant to the 2020 Incentive Compensation Plan, outstanding Performance Stock Unit (“PSU”) and Restricted Stock Unit (“RSU”) awards can be “assumed, continued, or substituted for,” in which case such awards will accelerate upon termination of the executive officer without “Cause,” as defined in the 2020 Incentive Compensation Plan, within the twelve (12)-month period following the Closing. If the PSU and RSU awards are not assumed, continued, or substituted for, the Sale will cause the acceleration of outstanding PSU and RSU awards in accordance with the terms of the 2020 Incentive Compensation Plan, as described in Footnotes 3 and 4 to the table in the section of this proxy statement entitled “Proposal No. 2—The Compensation Proposal” on page 92. In the event that the Sale does not occur, subject to our executive officers’ continued employment with Ambac, RSU awards will continue to vest in the ordinary course, and PSU awards will vest at the end of the applicable performance period.

Certain of Ambac’s executive officers have elected to defer the settlement of all or a portion of their RSU awards and PSU awards that are granted to such executive officers to a future date(s) selected by the executive officer

under Ambac’s Executive Stock Deferral Plan. The Sale constitutes a “Change in Control” under the Executive Stock Deferral Plan, which will cause the accelerated settlement of any vested deferred RSU awards and vested deferred PSU awards. The Change in Control under the Executive Stock Deferral Plan will not cause the vesting of any otherwise unvested RSU or PSU awards.

The following table sets forth the unvested and vested deferred PSU and RSU awards held by our executive officers as of July 31, 2024.

In the case of Ambac’s non-employee directors, the Sale represents a “Change in Control” pursuant to their RSU award agreements, which will accelerate the vesting of unvested outstanding director RSU awards. Also, all outstanding vested director RSUs (including those previously vested and deferred) will be settled as a result of the Sale pursuant to the director RSU award agreements. As of July 31, 2024, Ambac’s non-employee directors hold 84,474 unvested RSU awards, and 341,083 vested, unsettled RSU awards.

See the section of this proxy statement entitled “Proposal No. 2—The Compensation Proposal” beginning on page 92 for additional information.

The eligibility of certain of our executive officers for compensation upon a qualifying termination in connection with the Sale pursuant to their respective employment agreements or Ambac’s Severance Pay Plan, as the case may be

The Sale represents a “Change in Control” under the employment agreements of Messrs. LeBlanc, Trick, Ksenak, and McGinnis, and Ms. Smith (each, a “Continuing Executive”). Upon a qualifying termination in

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connection with a “Change in Control,” each Continuing Executive will be entitled to enhanced severance pay, except in the case of Mr. LeBlanc, who receives the same level of severance pay regardless of whether there is a Change in Control, and/or acceleration of STIP awards (including payment of a pro-rated portion of such awards for the year of termination). Upon a qualifying termination, whether or not in connection with a Change in Control, each Continuing Executive’s RSU and PSU awards will accelerate pursuant to their PSU and RSU grant agreements, as described below. Upon a qualifying termination, Messrs. Barranco and Eisman are entitled to severance pay pursuant to Ambac’s Severance Pay Plan and acceleration of PSU and RSU awards pursuant to their PSU and RSU grant agreements. Of the executive officers, Messrs. Barranco and Eisman are expected to transfer with AAC to Buyer, though this transfer of employment will not, by itself, result in severance payment immediately following the Sale. Ambac does not currently expect to terminate the employment of any Continuing Executive, and, as a result, Ambac does not currently expect to pay any of them enhanced severance in connection with the Sale.

Pursuant to their employment agreements, upon a qualifying termination of employment, each Continuing Executive is eligible to receive their base salary and accrued benefits through their date of termination. Each Continuing Executive is also entitled to receive the following severance payments and benefits: (1) if the qualifying termination is in connection with a Change in Control (except in the case of Mr. LeBlanc, who receives this lump sum payment upon a qualifying termination regardless of whether Change in Control has occurred), a lump sum equal to two times the Continuing Executive’s then-current base salary and two times the Continuing Executive’s annual target bonus for the calendar year of termination, (2) a pro rata portion of the Continuing Executive’s annual target bonus for the calendar year of termination, (3) up to 12 months of customary outplacement services provided by Ambac’s approved vendor, and (4) continued eligibility for the Continuing Executive and their dependents to participate in basic medical and life insurance programs of Ambac for up to 12 months, or, if earlier, until the date that the Executive becomes eligible to receive coverage from another employer or is no longer eligible to continue COBRA coverage. Severance payments made to each Continuing Executive in connection with a termination of employment are subject to such Continuing Executive’s delivery of a general release of claims and material compliance with the restrictive covenants set forth in such Continuing Executive’s employment agreement. For Continuing Executives other than Mr. LeBlanc, if the qualifying termination is not in connection with a Change in Control, the lump sum described in clause (1), above will instead be 1.5 times the Continuing Executive’s then-current base salary and 1.5 times the Continuing Executive’s annual target bonus for the year of termination.

Upon a qualifying termination that occurs prior to the Closing, Messrs. Barranco and Eisman are each entitled to severance pay and benefits pursuant to Ambac’s Severance Pay Plan, as described below in “Proposal No. 2—The Compensation Proposal—Severance Pay Plan” on page 95. Upon a qualifying termination that occurs on or following the Closing, Mr. Barranco and Mr. Eisman are each entitled to severance pay and benefits pursuant to their new employment agreements with Buyer, as described below.

With respect to equity awards of our executive officers upon a qualifying termination of employment, regardless of whether a Change in Control has occurred, pursuant to each such executive officer’s Restricted Stock Unit Agreements or Performance Stock Unit Agreements, as the case may be: (x) all of each such executive officer’s then-outstanding RSU awards shall become immediately vested and (y) with respect to then-outstanding PSU awards, each such executive officer shall be eligible to vest in each such award based on actual performance through the end of the applicable performance period.

See the section of this proxy statement entitled “Proposal No. 2—The Compensation Proposal” beginning on page 92 for additional information.

The entry by certain of our executive officers, who are expected to transfer with AAC, into employment agreements with Buyer for post-transaction employment

In connection with the entry of the Purchase Agreement, Messrs. Barranco and Eisman entered into new employment agreements with Buyer, which provide for Mr. Barranco to serve as the President of AAC and

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Mr. Eisman to serve as Chief Financial Officer of AAC after the Closing. Pursuant to their agreements, Messrs. Barranco and Eisman will each receive an annual salary of $500,000 and be eligible to receive an annual cash bonus targeted at no less than 100% or 75% of their annual salary, respectively. Messrs. Barranco and Eisman will be eligible to participate in a management incentive plan established by an affiliate of Buyer. Upon a qualifying termination, Messrs. Barranco and Eisman are entitled to: (1) any earned but unpaid bonus for the prior year, (2) if the termination occurs on or prior to December 31, 2026, a pro-rated target bonus for the current year, (3) 12 months of base salary severance, and (4) subsidized COBRA continuation coverage for 12 months. The severance payments and benefits are conditioned upon the executive’s execution and nonrevocation of a release of claims and continued compliance with applicable restrictive covenants.

See page 92 the section of this proxy statement entitled “Proposal No. 2—The Compensation Proposal” beginning on page 91 for additional information.

The acquisition by Ambac of a director and officer liability run-off policy or extended reporting coverage for a period of six (6) years following the Closing for individuals who were officers or directors of AAC or any of its subsidiaries prior to the Closing

Prior to the Closing, Ambac shall acquire, at Ambac’s sole expense, a director and officer liability run-off policy or extended reporting coverage (i.e., “tail coverage”) that will provide coverage for a period of six (6) years commencing immediately after the Closing for the individuals who were directors and officers of AAC and its subsidiaries prior to Closing comparable to the coverage provided as of the date of the Purchase Agreement under the policy or policies maintained by or for AAC or any of its subsidiaries for the benefit of such individuals.

Regulatory Approvals

Under the HSR Act, Ambac and Buyer cannot consummate the Sale until Ambac and Buyer have notified the Department of Justice’s Antitrust Division and the Federal Trade Commission of the Sale and furnished them with certain information and material relating to the Sale and the applicable waiting period has terminated or expired. On June 25, 2024, Ambac and Buyer each individually filed pre-merger notifications and report forms (with respect to the Sale) to the Federal Trade Commission and Department of Justice. The applicable waiting period expired on July 26, 2024, at 11:59 p.m.

The Sale is conditioned on the receipt of required regulatory approvals from (or notification to, as applicable) regulatory authorities including, but not limited to, (i) approval by the Wisconsin Office of the Commissioner of Insurance (“OCI”) of the Form A filing, which was submitted by Buyer to OCI on June 28, 2024; (ii) any applicable state insurance departments to which pre-acquisition notifications on Form E or similar market share notification forms or exemptions need to be filed; and (iii) approval by the U.K. Prudential Regulation Authority (the “PRA”) of the notification under s178 under the U.K. Financial Services and Markets Act 2000, as amended (the “FSMA”), which was filed with the PRA on June 28, 2024.

Material U.S. Federal Income Tax Consequences of the Sale

The following is a general summary of the anticipated material U.S. federal income tax consequences of the Sale. This summary is based upon the Code, existing, proposed and temporary U.S. Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof, in each case as in effect and available on the date hereof. All the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below. No ruling has been sought from the IRS with respect to any U.S. federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. In addition, this summary does not discuss any non-U.S., alternative minimum tax, state or local tax considerations.

For U.S. federal income tax purposes, the proposed Sale will be treated as a taxable sale of the stock of AAC by Ambac. The amount of gain or loss we recognize with respect to the sale of such stock will be measured by the

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difference between the amount realized by us on the sale of the stock and our tax basis in the stock. Any such gain or loss is expected to be capital in nature. Any loss arising from the sale may be reduced by certain tax elections made pursuant to the Purchase Agreement.

A portion of the cash received by Ambac will be allocable to the issuance of the Warrant. Ambac does not expect to derive taxable income or loss as a result of the issuance of the Warrant.

The proposed Sale is entirely a corporate action undertaken by Ambac. Our stockholders will not realize any taxable gain or loss on their shares of Ambac Common Stock for U.S. federal income tax purposes as a result of the Sale, as our stockholders will not receive any direct proceeds from the Sale. We do not anticipate that the Sale or the other Transactions contemplated by the Purchase Agreement will result in any U.S. federal income tax consequences to our stockholders.

This summary is not a complete description of all of the tax consequences of the Sale that may be relevant to you. Ambac stockholders are urged to consult their own tax advisors to determine the particular tax consequences to them of the Sale, including the applicability and effect of any U.S. federal, state, local, foreign or other tax laws.

Accounting Treatment of the Sale

The Sale will be accounted for as a sale of a “business” by Ambac, as that term is used under GAAP, for accounting and financial reporting purposes. Upon completion of the sale, we will remove the assets and liabilities sold from our consolidated balance sheet and we anticipate recording a loss from the Sale.

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THE PURCHASE AGREEMENT

The following is a summary of the material provisions of the Purchase Agreement, a copy of which is attached to this proxy statement as Annex A and which is incorporated by reference into this proxy statement. This summary may not contain all of the information about the Purchase Agreement that is important to you. You should refer to the full text of the Purchase Agreement for details of the transaction and the terms and conditions of the Purchase Agreement. We encourage you to read carefully the Purchase Agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the Purchase Agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Purchase Agreement

The following summary of the Purchase Agreement and the Sale and the other Transactions, and the copy of the Purchase Agreement attached as Annex A to this proxy statement, are intended to provide information regarding the terms of the Purchase Agreement and are not intended to modify or supplement any factual disclosures about Ambac in its periodic and current reports filed with the SEC. In particular, the Purchase Agreement and the related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to Ambac, AAC or Buyer, or their respective subsidiaries or affiliates. In particular, the assertions embodied in the representations and warranties in the Purchase Agreement were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Purchase Agreement are not necessarily characterizations of the actual state of facts about Ambac, AAC and Buyer at the time they were made or otherwise and should only be read in conjunction with the other information that Ambac makes publicly available in reports, statements and other documents filed with the SEC. Moreover, the below description of the Purchase Agreement, the Sale and the other Transactions is not complete and is subject to, and qualified in its entirety by reference to, the full text of such agreement, a copy of which is attached as Annex A to this proxy statement and which is incorporated herein by reference. Finally, information concerning the subject matter of the representations and warranties may have changed since the date of the Purchase Agreement or may change in the future, and these changes may not be fully reflected in the public disclosures made by Ambac, AAC or Buyer. As a result of the foregoing, you are strongly encouraged not to rely on the representations, warranties and covenants contained in the Purchase Agreement, or any descriptions thereof, as accurate characterizations of the state of facts or condition of Ambac, AAC or Buyer or any other party. You are likewise cautioned that you are not a third-party beneficiary under the Purchase Agreement and do not have any direct rights or remedies pursuant to the Purchase Agreement. Capitalized terms used in this section titled “Purchase Agreement” shall have the meaning ascribed to them in the Purchase Agreement, to the extent not otherwise defined herein.

Additional information regarding Ambac is contained in the documents incorporated by reference into this proxy statement and the other documents that we file with the SEC. See the section of this proxy statement entitled “Where You Can Find Additional Information” beginning on page 101.

Purchase Price and Sale of All Outstanding Shares of AAC

On June 4, 2024, AAC and Buyer entered into the Purchase Agreement providing for the Sale and the other Transactions. Subject to the terms and conditions of the Purchase Agreement and receipt of the Required Stockholder Approval, Buyer will purchase all of the issued and outstanding common stock of AAC, a wholly-owned subsidiary of Ambac, from Ambac. The Closing of the Sale is expected to occur on the Closing Date, which is the date that is the last business day of the calendar month following the satisfaction or waiver of the last of the conditions to Closing, which include that the Sale Proposal is approved at the special meeting; provided that if the satisfaction or waiver of the last of the conditions to Closing occurs fewer than ten (10) business days prior to the last business day of the calendar month, then the Closing will occur on the last business day of the calendar month immediately following the calendar month in which the last condition to Closing is satisfied or waived.

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Consideration for the Sale

Pursuant to the terms of the Purchase Agreement, the consideration for the Sale is an amount equal to $420,000,000, subject to certain adjustments. The amount of the adjustments shall be prepared in good faith by Ambac and delivered to Buyer at least five (5) business days prior to the Closing Date in a statement (the “Closing Statement”) certified by the Chief Financial Officer of Ambac, setting forth the total amount of the adjustments, including any upward adjustments for the resolution of certain litigation matters prior to the Closing and any downward adjustment for certain expenses that occur during the period between the execution of the Purchase Agreement and the Closing Date (such expenses, “Company Payments”). Following the Closing, Buyer shall have sixty (60) days to review the Closing Statement prepared by Ambac, with the Closing Statement becoming final and binding thirty (30) days after the Closing unless Buyer provides written notice of its disagreement with the Closing Statement prior to that date.

Representations and Warranties

The Purchase Agreement contains customary representations and warranties by each of Ambac and Buyer as of the date of the Purchase Agreement and as of the Closing. The statements embodied in those representations and warranties were made for purposes of the Purchase Agreement and are subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Purchase Agreement. In addition, some of those representations and warranties were made as of specified dates, may be subject to a contractual standard of materiality or material adverse effect different from that generally applicable to stockholders or may have been used for the purpose of allocating contractual risk between the parties to the Purchase Agreement rather than establishing matters as facts. Many of the representations and warranties contained in the Purchase Agreement are qualified by materiality or Material Adverse Effect, and are further modified and limited by confidential disclosure schedules delivered by Ambac to Buyer and by Buyer to Ambac, as the case may be and as may or may not be specifically indicated in the text of the Purchase Agreement.

The representations and warranties concerning AAC (including, in certain cases, with respect to its subsidiaries) made by Ambac to Buyer relate to, among other things, the following:

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For the purposes of the Purchase Agreement, “Material Adverse Effect” means any material adverse change in, or effect on, (i) the assets, business, financial condition or results of operations of AAC and its subsidiaries, taken as a whole or (ii) the ability of Ambac to timely perform its obligations hereunder or consummate the transactions contemplated by the Purchase Agreement or the ancillary agreements; provided that, in the case of clause (i), any such change or effect resulting from any of the following, individually or in the aggregate, shall not be considered when determining whether a Material Adverse Effect has occurred: (a) any change, development, event or occurrence after the date hereof arising out of or relating to economic conditions generally or capital and financial markets generally, including changes in interest or exchange rates and corresponding changes in the value of the Investment Assets of AAC or any of its subsidiaries, (b) any change, development, event or occurrence after the date hereof affecting the financial guaranty insurance industry in which AAC or any of its subsidiaries operates or in which products of AAC or any of its subsidiaries are used or distributed, (c) any change in Laws, GAAP, SAP or the enforcement or interpretation thereof applicable to AAC or any of its subsidiaries, (d) conditions in jurisdictions in which AAC or any of its subsidiaries operates, including political conditions generally, hostilities, acts of war (whether or not declared), sabotage, terrorism or military actions, or any escalation or worsening of any of the foregoing, (e) any change resulting from the negotiation, execution, announcement or consummation of the transactions contemplated by, or the performance of obligations under,

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the Purchase Agreement, including any such change relating to the identity of, or facts and circumstances relating to, Buyer and including any actions by customers, suppliers or personnel, (f) any action taken by Buyer and any of its affiliates or representatives, (g) any change (or threatened change) in the credit, financial strength or other ratings (other than the facts underlying any such change) of Ambac or any of its respective Affiliates, including AAC and its subsidiaries, (h) any hurricane, flood, tornado, earthquake or other natural disaster, man-made disaster or any other force majeure event or (i) the failure of AAC and its subsidiaries to achieve any earnings, premiums written, or other financial projections or forecasts (provided that this clause (i) shall not prevent a determination that any change, event, circumstance, fact or development underlying such failure to meet projections or forecasts has resulted in a Material Adverse Effect); provided, further, that any change, event, circumstance, fact or development with respect to clauses (a), (b), (c), (d) and (h) shall be taken into account in determining whether a “Material Adverse Effect” has occurred to the extent that such change, event, circumstance, fact or development has a disproportionately adverse effect on AAC and its subsidiaries, taken as a whole, relative to other participants in the financial guaranty insurance industry.

The representations and warranties made by Buyer to Ambac are similarly limited and relate to the following:

No Survival; No Indemnification

The representations and warranties of the parties contained in the Purchase Agreement terminate as of, and do not survive, the Closing, and there are no indemnification rights for another party’s breach, and the covenants and agreements of the parties contained in the Purchase Agreement do not survive on the Closing; provided that the obligation with respect to the Closing and purchase price; the acquisition of the co-investment facility; the provision of the requisite information to provide the publicly available financial information listed on Schedule C to the Settlement Agreement, dated as of June 7, 2010, by and among AAC, Ambac Credit Products LLC, and the policy beneficiaries party thereto; specified tax liabilities; and any covenants or agreements which by their terms contemplate performance (in whole or in part) after the Closing will survive to the extent required to be performed after the Closing, and provided, further, that the foregoing will not prevent or otherwise limit the rights of any party in the event of fraud or willful breach of the Purchase Agreement.

Financing

Equity Commitment Letter

In connection and concurrently with the entry into the Purchase Agreement, on June 4, 2024, Sponsor entered into the Equity Commitment Letter with Buyer, pursuant to which, subject to the terms and conditions set forth in

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the Equity Commitment Letter, Sponsor has committed to contribute, directly or indirectly, to Buyer (a) at the Closing, cash in an aggregate amount equal to $450,000,000, solely for the purpose of funding and to the extent necessary to fund the amounts required to consummate the Sale, and (b) if the Closing is not consummated due to certain qualified terminations, then Sponsor will contribute an aggregate amount equal to $42,000,000, solely for the purpose of funding and to the extent necessary to fund the payment by Buyer to Ambac of monetary damages awarded to Ambac pursuant to a final, nonappealable judgment by a court arising from Buyer’s fraud or willful breach of the Purchase Agreement. Ambac is a third-party beneficiary under the Equity Commitment Letter, subject to the terms and conditions of the Purchase Agreement, and (i) if (and only if) Ambac has obtained a final, nonappealable decision by a court entitling Ambac to specific performance of the obligations of Buyer to consummate the Closing under the Purchase Agreement, and in such case solely for the purpose of specifically enforcing Buyer’s right to cause the Sponsor to fund the amounts required to consummate the Sale and (ii) if (and only if) Ambac has obtained a final, nonappealable judgment by a court arising from Buyer’s fraud or willful breach of the Purchase Agreement, and in such case solely for the purpose of specifically enforcing Buyer’s right to cause the Sponsor to pay monetary damages. Buyer has represented and warranted in the Purchase Agreement that, subject to the terms and conditions of the Equity Commitment Letter, Buyer will have, as of the Closing, sufficient access to immediately available cash in an amount contemplated by the Equity Commitment Letter.

Certain Covenants and Agreements

The Purchase Agreement also contains certain customary covenants by each of the parties during the period between signing the Purchase Agreement and the earlier of the Closing or the termination of the Purchase Agreement in accordance with its terms.

Special Meeting of Ambac Stockholders

Ambac has agreed to take all action necessary to hold the special meeting of its stockholders for the purpose of obtaining the Required Stockholder Approval, including the preparation and mailing of this proxy statement and the related proxy materials to its stockholders, as promptly as practicable following entry into the Purchase Agreement. Even if there is a change to the Recommendation of the Ambac Board, Ambac has agreed to submit the Purchase Agreement to the stockholders of Ambac for the purpose of obtaining the Required Stockholder Approval. Subject to the non-solicitation provision of the Purchase Agreement with respect to Superior Proposals, Ambac will use its reasonable best efforts to solicit proxies to obtain the Required Stockholder Approval.

Public Announcements

Upon the execution of the Purchase Agreement and the Closing Date, Buyer and Ambac will cooperate in the preparation and contents of joint public announcements. Buyer and Ambac have also agreed not to issue any public release or announcement concerning the Purchase Agreement, the Sale and the other Transactions without the prior written consent of the other party.

Intercompany Accounts and Agreements and Company Payments

Prior to the Closing, (i) Ambac shall, as may be necessary, settle, discharge, offset, pay, repay, terminate or extinguish in full all intercompany accounts except the Settlement Agreement, (ii) Ambac will terminate all intercompany agreements to which AAC or its subsidiary is a party and will discharge them without any further liability or obligation thereunder and (iii) Ambac shall notify Buyer of any payment, transaction, commitment or agreement by AAC or its subsidiaries that has occurred since the date of the Purchase Agreement which is reasonably expected to constitute a Company Payment.

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Specified Transactions

Prior to the Closing, Ambac shall (i) acquire the co-investment facility, (ii) at Ambac’s election, negotiate and enter into a loan facility with Buyer and (iii) at no cost to AAC or any of its subsidiaries, assign certain leases to Ambac.

Audited Financial Statements and Monthly Reporting

Until the Closing or termination of the Purchase Agreement, Ambac shall continue to prepare or cause to be prepared, in the ordinary course of business, and deliver to Buyer certain financial statements, including (i) quarterly and annual statements of AAC’s assets, liabilities, cash flows and capital prepared in accordance to the statutory accounting principles and practices prescribed or permitted by OCI and (ii) AAC’s quarterly and annual unaudited consolidated balance sheet and income statement, in each case prepared in accordance to GAAP.

Transition Services Agreement

Ambac and Buyer will negotiate in good faith the form of the Transition Services Agreement consistent with the Transition Services Agreement Term Sheet, and the parties will use commercially reasonable efforts to finalize the definitive Transition Services Agreement within sixty (60) days of the date of the Purchase Agreement.

Covenants Relating to the Conduct of the AAC Business Prior to Closing

Affirmative Covenants

The Purchase Agreement also contains certain customary covenants by each of the parties during the period between the signing of the Purchase Agreement and the earlier of the Closing or the termination of the Purchase Agreement in accordance with its terms, including to use reasonable best efforts to obtain the required Governmental Approvals and to manage the Investment Assets in the ordinary course of business consistent with past practice, the investment guidelines of AAC and the interim asset allocation guidelines set forth in Annex A of the Purchase Agreement (“Interim Asset Allocation Guidelines”).

Negative Covenants

Prior to the Closing, Ambac has agreed that it will not (and will cause AAC and its subsidiaries not to) take any of the following actions with respect to the AAC business, subject to specified exceptions, without the prior request or written consent of Buyer:

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