ACA ABS 2004-1, Limited Rated 'AAA/AA/BBB' by Fitch Ratings.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 28, 2004

Fitch Ratings has rated the following notes issued by ACA ABS 2004-1, Limited and co-issuer ACA ABS 2004-1, L.L.C. (collectively referred to as the co-issuers):

-- U.S. $315,000,000 Class A-1 Senior Secured Floating Rate Notes

due July 2039 are rated 'AAA';

-- U.S. $49,500,000 Class A-2 Senior Secured Floating Rate Notes

due July 2039 are rated 'AAA';

-- U.S. $47,250,000 Class B Senior Secured Floating Rate Notes due

July 2039 are rated 'AA';

-- U.S. $18,375,000 Class C-1 Mezzanine Secured Floating Rate

Notes due July 2039 are rated 'BBB';

-- U.S. $3,000,000 Class C-2 Mezzanine Secured Fixed Rate Notes

due July 2039 are rated 'BBB'.

The ratings on the class A-1, A-2 and B notes address the timely payment of interest and ultimate payment of principal as outlined in the governing documents. The ratings on the class C-1 and C-2 notes address the ultimate payment of interest and principal as outlined in the governing documents.

The ratings are based upon the capital structure of the transaction, the quality of the collateral, and the overcollateralization and interest coverage tests provided for within the indenture. A notable feature of the structure includes the use of an equity cap which will redirect interest distributions to the equity in excess of 15% to pay down the class C notes pro rata.

The proceeds of the notes will be used to purchase a static investment portfolio consisting of approximately 67% residential mortgage-backed securities (RMBS), 13% commercial mortgage-backed securities (CMBS), 10% asset-backed securities (ABS), 6% collateralized debt obligations (CDOs), and 4% real estate investment trusts (REITs). The portfolio will be approximately 75% ramped at closing. The maximum Fitch weighted average rating factor (WARF) of the collateral is 4.5 (BBB/BBB-).

ACA Management is a Delaware limited liability company formed in May 2001 that provides asset management services to affiliated and non-affiliated investors and will act as the collateral manager for this transaction. It is a wholly owned subsidiary of ACA Risk Solutions, L.L.C., which in turn is a wholly owned subsidiary of ACA Holding, L.L.C. ACA Management's objective is to preserve capital, mitigate unexpected volatility, and develop operating strategies that target a sustainable mid-teens return on equity supported by annuity income and consistent growth in adjusted book value. Currently, the team manages $6.0 billion in assets through three synthetic CDOs and five cash flow CDOs including this one.

For more information on the structure and the collateral manager, please refer to the presale report titled 'ACA ABS 2004-1, Limited and ACA ABS 2004-1, L.L.C.', available on the Fitch Ratings web site at 'www.fitchratings.com'. Additional information about the collateral manager is also available on the Fitch Ratings web site at 'www.fitchratings.com' under insurance companies.