8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 8, 2005

AMBAC FINANCIAL GROUP, INC.

(Exact name of Registrant as specified in its charter)

Delaware	1-10777	13-3621676
(State of incorporation)	(Commission file number)	(I.R.S. employer identification no.)

One State Street Plaza, New York, New York 10004

(Address of principal executive offices) (Zip Code)

(212) 668-0340

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

Ambac Financial Group, Inc. (“Ambac”) has posted on its website information as of September 8, 2005 relating to Ambac’s exposure resulting from Hurricane Katrina.

The disclosure includes six tables. Table I is information related to Ambac’s Public Finance exposure to FEMA-designated counties within the three states – Louisiana, Mississippi and Alabama, broken out by bond type, including our exposure to the region of Greater New Orleans separately. Table II lists Ambac’s exposure to the three New Orleans parishes that make up Greater New Orleans. Table III lists Ambac’s exposure to investor-owned utilities within all counties of the three affected states. It is too early to determine the effect the storm will have on the underlying credit quality of the Public Finance and IOU exposures within these states. All of the Ambac-insured hospitals in the region are currently up and running.

Included within the Tables IV and V is information related to Ambac’s estimated current exposures to asset-backed bonds collateralized by mortgages on residential homes and manufactured housing located in the FEMA-designated counties and New Orleans. The amounts shown represent the estimated portions of larger, geographically diversified securitizations. Ambac does not have exposure to manufactured housing securitizations in Greater New Orleans. The impact on each transaction will be affected by the concentration of loans within the three states, the level of flood/hurricane or other insurance coverage on impacted homes within the pool and the amount of federal relief provided, if any. It is too early to determine the effect the storm will have on our MBS/MH exposures within these three states.

Included within Table VI are the top 20 public finance exposures in FEMA-designated counties. The Ambac internal ratings shown are prior to Hurricane Katrina. Ambac is currently assessing the impact of the storm on the underlying rating of each obligation.

The complete disclosure relating to Ambac’s Hurricane Katrina exposure is included in Exhibit 99.07 attached hereto and is posted on Ambac’s website www.ambac.com. Ambac will periodically update its website as additional information becomes available.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

Exhibit Number	Item
99.07	Disclosure on Hurricane Katrina as Posted on Ambac’s Website as of September 8, 2005

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Ambac Financial Group, Inc.
	(Registrant)
Dated: September 8, 2005
	By:	/s/ Sean T. Leonard
		Sean T. Leonard
		Senior Vice President and Chief Financial Officer

EX-99.07

Exhibit 99.07

Exposure to Hurricane Katrina (as of September 8, 2005)

Included in Table I below is information related to Ambac’s Public Finance exposure to FEMA-designated counties within the three states - - Louisiana, Mississippi and Alabama, broken out by bond type, includes our exposure to the region of Greater New Orleans separately. Table II lists Ambac’s exposure to the three New Orleans parishes that make up Greater New Orleans. Table III lists Ambac’s exposure to investor-owned utilities within all counties of the three affected states. It is too early to determine the effect the storm will have on the underlying credit quality of the Public Finance and IOU exposures within these states. All of the Ambac-insured hospitals in the region are currently up and running.

Table I

Ambac’s Public Finance Exposure in FEMA-Designated Counties

Net Par as of July 31, 2005 ($000)

Bond Type	Alabama		Greater New Orleans		Other Louisiana		Mississippi		Total
General obligation	$	404,395	$	387,212	$	353,555	$	402,064	$	1,547,226
Leases and tax backed		82,005		814,963		466,424		36,817		1,400,209
University		82,508		235,688		126,817		199,341		644,354
Utility		77,095		—		116,440		57,598		251,133
Transportation		—		176,342		—		56,997		233,339
Health care		88,554		—		105,035		24,175		217,764
Other		—		46,000		85		—		46,085
Grand Total	$	734,557	$	1,660,205	$	1,168,356	$	776,992	$	4,340,110

Counties designated by FEMA for individual and public assistance as of September 6, 2005

Table II

Ambac’s Public Finance Exposure in Greater New Orleans

Net Par as of July 31, 2005 ($000)

Bond Type	Orleans		Jefferson		St. Bernard		Total
General obligation	$	333,199	$	47,712	$	6,305	$	387,216
Leases and tax backed		475,668		339,292		—		814,960
University		235,688		—		—		235,688
Utility		—		—		—		—
Transportation		176,341		—		—		176,341
Health care		—		—		—		—
Other		—		46,000		—		46,000
Grand Total	$	1,220,896	$	433,004	$	6,305	$	1,660,205

Table III

Ambac’s Investor-Owned Utility Exposure in Alabama, Louisiana and Mississippi

Net Par as of July 31, 2005 ($000)

	Alabama	Louisiana		Mississippi		Total
Investor-owned utilities	$97,955	$	233,012	$	109,030	$	439,997

Included within the Tables IV and V below is information related to Ambac’s estimated current exposures to asset-backed bonds collateralized by mortgages on residential homes and manufactured housing located in the FEMA-designated counties and New Orleans. The amounts shown represent the estimated portions of larger, geographically diversified securitizations. Ambac does not have exposure to manufactured housing securitizations in Greater New Orleans. The impact on each transaction will be affected by the concentration of loans within the three states, the level of flood/hurricane or other insurance coverage on impacted homes within the pool and the amount of federal relief provided, if any. It is too early to determine the effect the storm will have on our MBS/MH exposures within these three states.

Table IV

MBS Securitization Pools (Total Net Par 45.7B)
	Net Par ($Millions)		% Total MBS Net Par
Alabama	$	113	0.3
New Orleans		49	0.1
Other Louisiana		242	0.5
Mississippi		73	0.2

Table V

Manufactured Housing Securitization Pools (Total Net Par = $1.1B)
	Net Par ($Millions)		% Total MH Net Par
Alabama	$	5	0.5
Louisiana		13	1.1
Mississippi		6	0.5

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Included within Table VI are the top 20 public finance exposures in FEMA-designated counties. The Ambac internal ratings shown are prior to Hurricane Katrina. Ambac is currently assessing the impact of the storm on the underlying rating of each obligation.

Table VI

	Net Par ($000)		State	Ambac Rating (pre- hurricane)	Net AADS ($000)		Final Maturity
New Orleans Exhibition Hall (1)	$	360,756	Louisiana	A-	$	24,219	2033
Various Jefferson LA Sales Tax Rev (1)		319,060	Louisiana	A+/A		25,680	2025
Various New Orleans Continuing and General Oblig (1)		281,852	Louisiana	BBB+		25,947	2033
Mobile, AL School Board General Oblig		201,040	Alabama	A		13,321	2033
Tulane University (1)		181,820	Louisiana	A+/BBB		13,457	2032
University of Mississippi		151,358	Mississippi	A-		9,310	2034
Mobile AL General Obligation		126,050	Alabama	A		11,969	2020
Louisiana Transportation Authority (1)		107,578	Louisiana	A-		8,312	2030
Harrison County, MS General Obligation		92,390	Mississippi	A		5,335	2040
Louisiana Office Facility Corp Lease		89,665	Louisiana	BBB		8,493	2021
Lafayette, LA Public Power - Electric Revenue		82,310	Louisiana	A-		13,485	2012
Infirmary Health Systems		76,560	Alabama	A		5,646	2025
Louisiana State Univ A&M Revenue Bond		75,207	Louisiana	A		4,782	2034
Terrebonne, LA Gen Medical Center		73,720	Louisiana	A		5,199	2033
Baton Rouge, LA General Obligation		68,770	Louisiana	A		5,295	2030
Lafayette, LA Sales Tax Revenue		64,110	Louisiana	A+		3,875	2028
Univ of South Alabama Tuition		63,565	Alabama	A		7,480	2018
New Orleans, LA Port Revenue (1)		60,695	Louisiana	A		3,947	2033
East Baton Rouge, LA Sales Tax		58,120	Louisiana	A		5,179	2024
Jackson MS Airport Revenue		56,997	Mississippi	A-		3,277	2035
Total	$	2,591,623			$	204,208

¹ Exposures within Greater New Orleans including the parishes of Orleans, Jefferson and St. Bernard.

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