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But was granted a reprieve from Citibank, et. al. See the following excerpt from the 8K this morning.

Item 1.01 Entry into a Material Definitive Agreement.

On January 17, 2008, Ambac Financial Group, Inc. (“Ambac”) and Ambac Assurance Corporation (collectively, the “Borrowers”), certain lenders and Citibank, N.A., as administrative agent (the “Administrative Agent”), entered into an amendment (the “Amendment No. 1”) to the First Amended and Restated Revolving Credit Agreement, dated as of July 30, 2007 (as amended, supplemented and otherwise modified from time to time and in effect on the date hereof, the “Credit Agreement”) among the Borrowers, the Administrative Agent, The Bank of New York and KeyBank, National Association, as co-syndication agents, HSBC Bank USA, N.A. and Wachovia Bank, National Association as co-documentation agents and Citigroup Global Markets Inc. as the sole lead arranger and sole book runner, and certain other financial institutions, as lenders.

The Amendment No.1 amends Section 5.03(a) concerning minimum net assets and the definition of “Total Capital” set forth in Section 1.01 of the Credit Agreement by excluding net mark-to-market (losses) gains on credit derivative contracts with the exception of the Impairment Value with respect to such losses. In addition, the Amendment No.1 adds a definition of “Impairment Value” to Section 1.01.


Excerpt from the earnings call transcript:

"Now how about answered quality? Many of you have expressed concern over this issue. Some feel that our 1.1 billion reserves, which is incorporated in our quarterly results was a surprise and contrary to assurances expressed by the company in the past. David Wallace is going to cover this issue in detail when I am finished. He will provide you with the same analysis that he provided our board and financial advisers.

I do not want to run on here only to force listeners to hear it all again but the short answer is this. We analyzed our potential losses using several methods. Until this quarter, the methodologies in which we had the most confidence showed no losses, this quarter although one methodology in which we had previously relied continued to show no losses. An additional methodology, which is tied to the specific legal structure and radiance on the underlying securities, began to feel losses as the rating agencies accelerated downgrades of the underlying securities. Naturally, we took these results in to account setting our reserve."