ACA Capital Forbearance Extended until May 30, 2008.

NEW YORK -- ACA Capital Holdings, Inc. (OTC BB: ACAH) today announced that it has entered into a fourth forbearance agreement with its Structured Credit and other similarly situated counterparties. This agreement will remain effective through 11:59 p.m. (New York City local time) on May 30, 2008, subject to extension upon certain circumstances. Under the agreement, the counterparties will continue to waive all collateral posting requirements, termination rights and policy claims relating to the rating of ACA Financial Guaranty Corporation, ACA Capital's financial guaranty insurance subsidiary, under their respective transaction documents including any credit support annexes and similar agreements. The Company is pleased to have reached an additional agreement with its counterparties and continues to work closely with them to develop a permanent solution to stabilize its capital position.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains statements that may be considered "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements reflect management's current expectations based on its current views and assumptions regarding future events and economic performance and are subject to risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. For example, the Company's forward looking statements, including its statements regarding certain business strategies and objectives, specifically its comments with regard to events during the forbearance period, the development of a solution and the closing of a transaction described above, could be affected by many events. These events include difficulties with the execution of the Company's business strategy or changes in the Company's business strategy, changes in the economic, credit spread or interest rate environment in the United States and overseas, rating actions with respect to the financial strength rating of ACA Financial Guaranty Corporation, prolonged disruptions of the markets in which the Company participates, the failure of the Company to accurately estimate the potential severity of defaults or downgrades in the pool of assets referenced by its insured credit default swaps, decreased demand for the Company's insurance products or asset management services, or increased competition in the Company's markets, loss of key personnel, discussions with counterparties, changes in regulation or tax laws, governmental action, changes in accounting policies or practices, other risks and uncertainties not identified at this time, management's response to these factors, and other risk factors identified in the Company's filings with the Securities and Exchange Commission. The Company cautions that forward-looking statements made by the Company speak only as of the date on which they are made, and, except as required by law, the Company does not undertake any obligation to update or revise such statements if the Company's expectations change or the Company becomes aware that any forward-looking statement is not likely to be achieved.