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Ambac Financial responds to Canyon Capital bid to replace chairman

Ambac FinancialGroup Inc. has urged stockholders to vote for its board nominees asCanyon Capital Advisors LLCcampaigns to replace Chairman Jeffrey Stein.

Ambac said Canyon's efforts to install its nominee to the boarddespite two new directorswho are supported by stockholders show that their agenda is not aligned with stockholderinterests. Ambac noted that Canyon has a position in debt securities either issuedor insured by Ambac that is more than 10x larger than its equity position.

Ambac also noted that Canyon has been aggressive in its bid toreplace Stein as chairman. The company listed Stein's accomplishments, includingdeveloping a constructive relationship with the company's chief regulator, establishinga strong governance framework, attracting four independent directors, and deliveringreduced risk and operational outperformance.

The company also reiterated that more than 20% of its shareholdershave already rejected Canyon's campaign and publiclysupported Stein and the board.

Canyon recently releaseda comparative analysis of the compensation of Ambac President and CEO Nader Tavakoliand its board versus corresponding compensation at Ambac Financial's peers. Canyonalso urged stockholders to elect Frederick Arnold to serve on the Ambac board, insteadof Stein.