MBIA - AMBAC International Announces Strategic Alliance with The Yasuda Fire and Marine Insurance Co., Ltd. and Mitsui Marine and Fire Insurance Co., Ltd. to Provide Financial Guarantee Insurance in Japan

Business Wire, Sept 3, 1998

NEW YORK--(BUSINESS WIRE)--Sept. 3, 1998--

New Tokyo Office Established

MBIA - AMBAC International, the reinsurance joint venture between the world's two largest monoline financial guarantors, Ambac Assurance Corporation (NYSE:ABK) and MBIA Insurance Corporation (NYSE:MBI) has announced its intent to form a strategic alliance with two of Japan's largest non-life insurance companies, Mitsui Marine and Fire Insurance Co. Ltd. and The Yasuda Fire and Marine Insurance Co. Ltd. The alliance will provide financial guarantee insurance to Japanese issuer and investor clients. It is expected that a letter of intent will be signed within the next few months. To support this effort, MBIA - AMBAC International has opened a representative office in Tokyo.

"We are particularly pleased to have such strong partners in Yasuda and Mitsui," says Ambac's Chairman and CEO, Phillip B. Lassiter. "Their reputation and longstanding relationships complement the financial strength and technical expertise of MBIA - AMBAC International."

"The alliance strengthens MBIA - AMBAC International's commitment to Japan by providing increased underwriting capacity, high ratings and innovative structured finance technology at a critical juncture in the changing Japanese credit markets," remarks David H. Elliott, MBIA chairman and CEO.

Ambac and MBIA pioneered the U.S. financial guarantee industry in the 1970s, and today both are leaders in the field with a combined total of over $500 billion of par value of insured securities outstanding and combined claims-paying resources of over $10 billion. In 1995, the two companies formed a joint venture, MBIA - AMBAC International, and helped introduce financial guarantee insurance to world markets. From Japan alone, Ambac and MBIA have insured $6.4 billion in par value of asset-backed and structured transactions.

Ambac and MBIA have existing relationships with Yasuda and Mitsui and have previously cooperated on reinsurance transactions. The new alliance would combine the experience and capacity of MBIA - AMBAC International with the capabilities of Yasuda and Mitsui to provide financial guarantees in the domestic Japanese market.

The new Tokyo office of MBIA - AMBAC International will be managed by John Bryan and Stephen Halpert, both managing directors of MBIA - AMBAC International. Mr. Bryan and Mr. Halpert each have over 20 years of experience in Japan and have overseen the Japan activities of Ambac and MBIA over the past four years. "While there are significant changes taking place in Japan, we clearly expect appropriate opportunities that meet our traditional investment grade standards," says Mr. Bryan. "This is particularly true in the case of asset-backed and structured finance transactions," adds Mr. Halpert.

Financial guarantee insurance provides for timely payment to investors of principal and interest in the event of a default, and the securities carry the underlying financial strength rating of the guarantor. Issuers gain improved access to domestic and international capital markets, lower cost of funds and diversified funding sources. Investors gain the safety of highly rated securities, broadened portfolio diversification and mitigation of risk by purchasing insured securities. Ambac Assurance Corporation and MBIA Insurance Corporation have financial strength ratings of Triple-A by Moody's Investors Service, Inc., Standard & Poor's Ratings Services, Fitch IBCA, Inc. and Japan Rating and Investment Information, Inc.

The Yasuda Fire & Marine Insurance Co. Ltd. and Mitsui Marine & Fire Insurance Co. Ltd. are the second and third largest non-life insurance companies in Japan, respectively. With Double-A ratings from Moody's and Standard & Poor's, both property and casualty insurers hold strong market positions, have conservative capitalization, excellent financial flexibility and are well positioned to take advantage of opportunities arising from market deregulation.

MBIA - AMBAC International is an unincorporated reinsurance joint venture among Ambac Assurance Corporation, Ambac Insurance UK Limited, MBIA Insurance Corporation and MBIA Assurance S.A. MBIA - AMBAC International is not a partnership. Financial guarantee insurance policies are issued separately by the joint venture companies.

   CONTACT: MBIA Insurance Corp., Armonk
             Debra A. Descloux, 914/765 3895
             or Michael C. Ballinger, 914/765 3893
             www.mbia-ambac.com