ACA Capital Files Registration Statement with SEC.

NEW YORK -- ACA Capital Holdings, Inc. (NYSE: ACA) today announced that it filed with the Securities and Exchange Commission a registration statement relating to a proposed underwritten public offering of its common stock by certain selling stockholders including SF Holding Corp., Third Avenue Trust, Banc of America and Drawbridge Special Opportunities Fund LP.

Under the registration statement, selling stockholders will initially offer approximately 3,944,473 shares, and the company will grant the underwriters an option to purchase up to an additional 591,670 shares to cover over-allotments. The company will not receive any of the proceeds from the sale of shares by the selling stockholders. If the underwriters exercise their over-allotment option in full, we intend to use the net proceeds of this offering for general corporate purposes.

J.P. Morgan Securities Inc. and Keefe, Bruyette & Woods, Inc. will act as joint book-running managers for the offering. In addition, Piper Jaffray & Co. will act as co-manager for this offering. Copies of the written prospectus, when available, may be obtained by writing to the joint book-runners at: J.P. Morgan Securities Inc., Prospectus Library, One Chase Metrotech Center, CS Level, Brooklyn, New York 11245; or Keefe, Bruyette & Woods, Inc., 787 Seventh Avenue, 4th Floor, New York, New York 10019.

The aforementioned registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

ACA Capital is a holding company that provides asset management services and credit protection products to participants in the global credit derivatives markets, structured finance capital markets and municipal finance capital markets. ACA Capital's asset management services are provided through its asset management subsidiaries, ACA Management, L.L.C. and ACA Capital Management (U.K.) Pte. Limited, and its credit protection products are provided through its "A" rated financial guaranty insurance subsidiary, ACA Financial Guaranty Corporation. ACA Capital Management (U.K.) Pte. Limited is authorized and regulated by the Financial Services Authority.