Securities Act of 1933
Section 3(a)(10)

April 8, 2011

Response of the Office of Chief Counsel
Division of Corporation Finance

Re:	Segregated Account of Ambac Assurance Corporation Incoming letter dated April 8, 2011

Based on the facts presented, the Division’s views are as follows. Capitalized terms have the same meanings as defined in your letter.

The Division will not recommend enforcement action to the Commission if the Segregated Account, in reliance on your opinion of counsel that the exemption under Section 3(a)(10) of the Securities Act is available, issues Surplus Notes to the Trustee, on behalf of the LVM Bondholders, pursuant to the Settlement Agreement without registration under the Securities Act. In reaching this position, we have noted that:

• the Court will conduct a hearing on the fairness of the terms and conditions of the Settlement Agreement, including the issuance of Surplus Notes, to holders of Claims;
• the Court will approve the fairness of the terms and conditions of the Issuance to the LVM Bondholders before the Segregated Account issues Surplus Notes pursuant to the Settlement Agreement;
• in your opinion of counsel, all registered LVM Bondholders have been provided with notice of the hearing regarding the Settlement Agreement and will have the opportunity to be heard at the hearing, with no improper impediments; and
• the Rehabilitator will advise the Court before the hearing that, if the Court approves the terms and conditions of the Settlement Agreement, its approval of the Settlement Agreement will constitute the basis for the issuance of the Surplus Notes under the Settlement Agreement without registration under the Securities Act, in reliance on the exemption from registration provided by Securities Act Section 3(a)(10).

This position is based upon the representations made in your letter to the Division and your opinions of counsel. Any different facts or conditions might require a different conclusion. This response expresses the Division’s position on enforcement action only and does not express any legal conclusions on the question presented.

Incoming Letter:

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/corpfin/cf-noaction/2011/ambacassurance040811-3a10.htm