Business: Ambac Financial Group Inc., 9.50% Equity Units, stated amount $50 per unit, initially consisting of Corporate Units which include a stock purchase contract and a 1/20th interest in a 9.50% Senior Note with a principal amount of $1000. The stock purchase contract requires the holder to purchase for $50 a variable number of shares of Ambac Financial Group Inc. (NYSE: ABK) common stock no later than 5/17/2011 and pays a contract adjustment rate of 0% per annum. The stock purchase settlement rate will be 6.2775 shares per unit if the then current market price is equal to or greater than $7.97 and 7.4074 shares per unit if the market price is equal to or less than $6.75. For market prices between those values the settlement rate will be $50 divided by the market value. Prior to the IPO of this security, the last reported sale price of the common stock on 3/6/2008 was $7.42 per share. The Senior Note is due 2/15/2021 which may be changed to 5/17/2013 and is subject to reset and remarketing on the third business day prior to 2/15/2011. The Corporate Units pay quarterly distributions of 9.50% ($4.75) per annum on 2/15, 5/15, 8/15 & 11/15 to holders of record on the record date that is the first day of the month in which the payment is due (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Distributions paid by these securities are derived from interest paid on the underlying debt securities and therefore are NOT eligible for the 15% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. The Senior are pledged as collateral to secure the holder's obligations under the stock purchase contract. The holder has the right at any time to convert the Corporate Units to Treasury Units by the substitution of a specified zero-coupon U.S. Treasury security for the Senior Notes and to later recreate Corporate Units. The Senior Notes are unsecured and rank equally with the company's other unsecured senior indebtedness. See the IPO prospectus for extensive additional information on the equity units and their mandatory conversion provisions by clicking on the ‘Link to IPO Prospectus’ provided below.