Canyon Capital Continues to Press for Change at Ambac, Announcing Proxy Contest to Elect Frederick Arnold as an Independent Director

LOS ANGELES, April 8, 2016

• Canyon Capital seeks to replace current director Jeffrey Stein with Frederick Arnold to improve oversight by Ambac Board.
• Canyon Capital believes that, as Chairman of Ambac's Board, Mr. Stein oversaw substantial deterioration in the Company's stock price and helped to reward CEO Nader Tavakoli with an exorbitant compensation package.
• Canyon Capital backs recent Support Agreements between Ambac and certain stockholders to replace two of Ambac's directors.
• Canyon Capital believes concerns that led to the Support Agreements and appointment of two new directors confirm that the ongoing issues raised by Canyon Capital are of concern to all stockholders.
• Canyon Capital urges stockholders to support Mr. Arnold's candidacy in order to elect a board that can fairly and legitimately assess and oversee the Company's direction and managerial leadership.

Canyon Capital Advisors LLC ("Canyon Capital"), a leading alternative asset manager serving institutional clients worldwide, and manager of funds and accounts that own almost 5% of the outstanding shares of Ambac Financial Group, Inc. (Nasdaq: AMBC) ("Ambac" or the "Company"), today filed preliminary proxy materials in support of its proposal that Frederick Arnold be elected to the Board of Directors of Ambac ("Ambac's Board") in replacement of current board member and Chairman, Jeffrey Stein, at Ambac's May 18, 2016 annual meeting of stockholders.

Canyon Capital supports the recent agreement between Ambac and a number of stockholders (collectively, the "Support Agreements") to replace two of Ambac's directors with nominees approved by those stockholders:  Ian Haft, a nominee proposed by stockholders, and David Herzog, proposed by the current Ambac Board.  The Support Agreements were announced in the wake of extensive criticism by Canyon Capital of the Company's direction under the leadership of Nader Tavakoli, and reflect that other stockholders want change to the Ambac Board – which is responsible for the oversight and supervision of Company management.

While these new directors are a welcome addition, Canyon Capital is skeptical that true change will be possible as long as the board contains only one director affirmatively proposed by stockholders and continues to be chaired by Mr. Stein, who has presided over Ambac's Board since the inception of Mr. Tavakoli's serving as Ambac's President and Chief Executive Officer and throughout the deterioration of the Company's stock price during that time. 

Ambac has criticized the concerns expressed by Canyon Capital because it is purportedly "conflicted" by virtue of its holdings in policies issued by Ambac's wholly owned subsidiary, Ambac Assurance Corporation ("Ambac Assurance").  However, Canyon Capital – which owns almost 5% of Ambac's stock – believes that the stockholder concerns that led to the Support Agreements and the appointment of two new directors confirm that the ongoing issues raised by Canyon Capital are of concern to all stockholders. 

Mr. Arnold is the Chief Financial Officer and a member of the Executive Committee of ConvergEx Group, LLC, an agency-focused global brokerage and trading related services provider.  He also serves as a member of the post-emergence board of directors of Lehman Brothers Holdings Inc.  Mr. Arnold has served on a number of other boards of directors, including ones that have provided him with significant experience across various types of structured products.  He has held a series of senior financial positions as well, including having been hired to play an integral leadership role in guiding Capmark Financial Group Inc., a commercial real estate finance company, through its reorganization and emergence from bankruptcy. 

In nominating Mr. Arnold as an independent director to replace Mr. Stein, Canyon Capital is deliberately not asking stockholders to elect him in lieu of Ambac Board director, and President and Chief Executive Officer, Nader Tavakoli, whose stewardship Canyon Capital has criticized.  Canyon Capital recognizes that asking stockholders to remove Mr. Tavakoli from the Ambac Board while he continues to serve as Ambac's President and Chief Executive Officer would create complications, but is confident that a truly independent board with at least two directors affirmatively proposed by stockholders would carefully review Ambac's current situation and make the right decision with respect to whether Mr. Tavakoli's tenure as President and Chief Executive Officer of Ambac should continue.