UNITED
STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549



---







FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934



(Mark One)



| | ☒ | ANNUAL
                                         REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | -----------------------------------------------------------------------------------------------------------------------------



For the fiscal year ended December 31, 2016



or



| | ☐ | TRANSITION
                                         REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ---------------------------------------------------------------------------------------------------------------------------------



For the transition period from ________ to ________



Commission File Number of issuing entity: 001-33605
Central Index Key Number of issuing entity: 0001405198



|STRATS
                                         Trust for AMBAC Financial Group, Inc. Securities, Series 2007-1
|---------------------------------------------------------------------------------------------------------------
|(Exact name of issuing
    entity as specified in its charter)                                                 



Commission File Number of depositor and sponsor: 001-31818
Central Index Key Number of depositor and sponsor: 0001140396





|Synthetic Fixed-Income Securities, Inc.                              
|---------------------------------------------------------------------
|(Exact name of depositor
    and sponsor as specified in its charter)



|New York                                                       | 20-7474289                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation
or organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|301 South College Street, Charlotte, North Carolina            | 28288                               
|(Address of principal executive offices)                       | (Zip Code)                          



Registrant’s telephone number, including area code:
(212) 214-6277



Securities registered pursuant to Section 12(b) of the Act:



|Title of each class                |  | Name of Registered exchange on which registered
|---------------------------------- |  | -----------------------------------------------
|                                   |  |                                                
|STRATS Certificates, Series 2007-1 |  | New York Stock Exchange                        



Securities registered pursuant to Section 12(g) of the Act: None.



Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.
Yes ☐  No ☒



Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐  No ☒



Indicate by check mark whether the registrant: (1) Has filed all
reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ☒  No ☐



Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Yes ☒  No ☐



Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge,
in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K.
Not applicable.



Indicate by check mark whether the registrant is large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☐     Accelerated filer  ☐     Non- accelerated filer  ☒     Smaller reporting company  ☐



Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act).
Yes ☐  No ☒



State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal
quarter:



The registrant has no voting stock or class of common stock that is
held by non-affiliates.














DOCUMENTS INCORPORATED BY REFERENCE



None.



Introductory Note



Synthetic Fixed-Income Securities, Inc. (the “Depositor”) is the
Depositor in respect of the STRATS Trust for AMBAC Financial Group, Inc. Securities, Series 2007-1 (the “Trust”), a
common law trust formed pursuant to the Base Trust Agreement, dated as of September 8, 2006, between the Depositor and U.S. Bank
Trust National Association, as trustee (the “Trustee”), as supplemented by the STRATS Certificates Series Supplement
2007-1 (the “Series Supplement”) dated as of July 16, 2007 in respect of the Trust. The Trust’s assets consist
solely of DISCS issued by Ambac Financial Group Inc. The Certificates do not represent obligations of or interests in the Depositor
or the Trustee.











Pursuant to staff administrative positions established in Corporate Asset
Backed Corporation (available August 9, 1995), the Trust is not required to respond to various items of Form 10-K. Such items are
designated herein as “Not Applicable.” Distribution reports detailing receipts and distributions by the Trust are filed
after each distribution date on Form 10-D in lieu of reports on Form 10-Q. AMBAC Financial Group, Inc., the issuer of the underlying
securities, is subject to the information reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”).
For information on AMBAC Financial Group, Inc. please see its periodic and current reports filed with the Securities and Exchange
Commission (the “Commission”) under its Exchange Act file number, 001-10777. The Commission maintains a site on the
World Wide Web at “http://www.sec.gov” at which users can view and download copies of reports, proxy and information
statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval system, or
“EDGAR.” Periodic and current reports and other information required to be filed pursuant to the Exchange Act by AMBAC
Financial Group, Inc. may be accessed on this site. You can request copies of these documents, upon payment of a duplicating fee,
by writing to the SEC. The public may read and copy any materials filed with the Commission at the Commission’s Public Reference
Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room
by calling the Commission at 1-800-SEC-0330. Please call the SEC at 1-800-SEC-0330 for further information on the operation of
the SEC’s public reference rooms. Neither Synthetic Fixed-Income Securities, Inc. nor the Trustee has participated in the
preparation of such reporting documents, or made any due diligence investigation with respect to the information provided therein.
Neither Synthetic Fixed-Income Securities, Inc. nor the Trustee has verified the accuracy or completeness of such documents or
reports. There can be no assurance that events affecting the issuer of the underlying securities or the underlying securities themselves
have not occurred or have not yet been publicly disclosed which would affect the accuracy or completeness of the publicly available
documents described above.



2







PART I



The following Items have been omitted in accordance with General
Instruction J to Form 10-K:



Item 1. Business.



Item 1A. Risk Factors.



Item 2. Properties.



Item 3. Legal Proceedings.



Item 1B. Unresolved Staff Comments.



Not Applicable.



Item 4. Mine Safety Disclosures.



Not Applicable.



PART II



The following Items have been omitted in accordance with General
Instruction J to Form 10-K:



Item 5. Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.



Item 6. Selected Financial Data.



Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations.



Item 7A. Quantitative and Qualitative Disclosures About Market Risk.



Item 8. Financial Statements and Supplementary Data.



Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.



Item 9A. Controls and Procedures.



Item 9B. Other Information.



None.



PART III



The following Items have been omitted in accordance with General
Instruction J to Form 10-K:



Item 10. Directors, Executive Officers and Corporate Governance.



Item 11. Executive Compensation.



Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.



Item 13. Certain Relationships and Related Transactions, and Director
Independence.



Item 14. Principal Accounting Fees and Services.



3







SUBSTITUTE INFORMATION PROVIDED IN ACCORDANCE
WITH GENERAL INSTRUCTION J(2) TO FORM 10-K.



|Item 1112(b) of Regulation AB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Significant Obligors of Pool Assets (Financial Information).                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The primary asset of the issuing entity is the underlying securities, $37,500,000
        of 6.15% DISCS due February 15, 2037 issued by AMBAC Financial Group, Inc. The issuer of the underlying securities, therefore,
        may be considered a significant obligor. The issuer of the underlying securities is subject to the information reporting requirements
        of the Securities Exchange Act of 1934 (the “Exchange Act”). For information on the issuer of the underlying securities
        please see its periodic and current reports filed with the Securities and Exchange Commission (the “Commission”) under
        its Exchange Act file number, 001-10777.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Item 1114(b)(2) of Regulation AB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Credit Enhancement and Other Support, Except for Certain Derivatives
        
        Instruments (Information Regarding Significant Enhancement
        
        Providers Financial Information).
|Based on the standards set forth in Item 1114(b)(2) of Regulation AB, no information is required in response to this Item.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 1115(b) of Regulation AB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Certain Derivatives Instruments (Financial Information).                                                                                                                                           
|Based on the standards set forth in Item 1115(b) of Regulation AB, no information is required in response to this Item.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item 1117 of Regulation AB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Legal Proceedings.                                                                                                                                                                                 
|There are no legal proceedings pending, or any proceedings known to be contemplated, by governmental authorities against the depositor, the Trustee or the issuing entity, or any property thereof, that is material to the holders of the Certificates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Item 1119 of Regulation AB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Affiliations and Certain Relationships and Related Transactions.                                                                                                                                   
|Based on the standards set forth in Item 1119 of Regulation AB, no information is required in response to this Item.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Item 1122 of Regulation AB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Compliance with Applicable Servicing Criteria                                                                                                                                                      
|U.S. Bank Trust National Association has been identified
        by the registrant         as a party participating in the servicing function with respect to the pool assets held by STRATS
        Trust for AMBAC Financial Group,         Inc. Securities, Series 2007-1. U.S. Bank Trust National Association has completed a
        report on an assessment of compliance with         the servicing criteria applicable (the “Report on Assessment”)
        as of February 28, 2017 and for a period beginning January         1, 2016 through and including December 31, 2016, which
        Report on Assessment is attached as an exhibit to this Form 10-K. In addition,         U.S. Bank Trust National Association
        has provided an attestation report (the “Attestation Report”) by a registered         independent public
        accounting firm regarding its related Report on Assessment. The Attestation Report is attached as an exhibit         to this
        Form 10-K. Neither the Report on Assessment or the related Attestation Report has identified any material instances of
        noncompliance with the servicing criteria described in the Report on Assessment as being applicable to U.S. Bank Trust
        National         Association.
|Item 1123 of Regulation AB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Servicer Compliance Statement.                                                                                                                                                                     
|U.S. Bank Trust National Association has provided a statement of compliance (the “Compliance Statement”) for the period from and including January 1, 2016 through and including December 31, 2016, which has been signed by an authorized officer of U.S. Bank Trust National Association. The Compliance Statement of U.S. Bank Trust National Association is attached as an exhibit to this Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   





4







PART IV



Item 15. Exhibits, Financial Statement Schedules.



| | (a) | The following documents have been filed as part of this
report.
| | --- | ---------------------------------------------------------------



| | 1. | None.
| | -- | -----



| | 2. | None.
| | -- | -----



| | 3. | Exhibits:
| | -- | ---------



31.1 – Certification by Director of
the Registrant pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



33.1 – Report on Assessment of Compliance
with Servicing Criteria for U.S. Bank Trust National Association for the period from and including January 1, 2016 through and
including December 31, 2016.



34.1 – Attestation Report of Ernst
& Young LLP on Assessment of Compliance with Servicing Criteria relating to U.S. Bank Trust National Association.
35.1 – Servicer Compliance Statement of U.S. Bank Trust National Association for the period from and including January 1,
2016 through and including December 31, 2016.



| | (b) | See Item 15(a) above.
| | --- | ---------------------



| | (c) | Not Applicable.
| | --- | ---------------



5







SIGNATURE



Pursuant to the requirements of Section 13 or 15(d)
the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.



| |                                                                        |                          | 
| | ---------------------------------------------------------------------- | ------------------------ | 
| | Synthetic
    Fixed-Income Securities, Inc.,                          
| | as
    Depositor for the Trust                                        
| |                                                                        |                         
| | By:                                                                    | /s/
    Barbara Garafalo
| | Name:                                                                  | Barbara
    Garafalo    
| | Title:                                                                 | Vice
    President      
| |                                                                        |                         
| | (senior
    officer in charge of the securitizations of the depositor)



Dated:   March 31, 2017



6







EXHIBIT INDEX



|Exhibit 
Number in this 
Form 10-K | Description of Exhibits                                                                                                                                                                       
|---------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1                               | Certification by Director of the Registrant pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                         
|33.1                               | Report on Assessment of Compliance with Servicing Criteria for U.S. Bank Trust National Association for the period from and including January 1, 2016 through and including December 31, 2016.
|34.1                               | Attestation Report of Ernst & Young LLP on Assessment of Compliance with Servicing Criteria relating to U.S. Bank Trust National Association.                                                 
|35.1                               | Servicer Compliance Statement of U.S. Bank Trust National Association for the period from and including January 1, 2016 through and including December 31, 2016.                              





7