Fitch Rates ACAS Business Loan Trust 2006-1.

NEW YORK -- Fitch assigns the following ratings to ACAS Business Loan Trust 2006-1:

--$291,000,000 Class A floating-rate asset backed notes, due 2019 'AAA';

--$37,000,000 Class B floating-rate deferrable asset backed notes, due 2019 'AA';

--$72,500,000 Class C floating-rate deferrable asset backed notes, due 2019 'A';

--$35,500,000 Class D floating-rate deferrable asset backed notes, due 2019 'BBB'.

ACAS Business Loan Trust 2006-1 is a middle market CLO (collateralized loan obligation). The ratings are based upon the credit quality of the underlying assets, the credit enhancement provided to the capital structure through subordination and excess spread, and the strength of American Capital Strategies, Ltd. as originator and servicer of the portfolio assets.

The rating of the class A notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the class B, C and D notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date.

The notes are supported by the cash flows of an asset portfolio consisting of high-yield loans to privately owned middle market U.S. businesses. The loans were made for the purpose of working capital, growth, acquisitions, and recapitalizations and the obligors primarily operate in business services, computers and electronics, and automobile sectors. The expected portfolio consists of 58.2% subordinated loans, 10.9% senior secured loans, 27.3% qualified second lien loans, with the remaining 3.6% consisting of second lien loans. The portfolio, which is 90% ramped up as of closing, has a maximum Fitch weighted average rating factor of 30.0 ('B/B-'). The expected pool will have 37 loan obligors representing 58 loans, with no single obligor representing more than 5% of the total portfolio value.

During the replenishment period, which lasts for three years, principal collections may be used to reinvest in additional collateral within a 90 day period. Any amount in the principal collections not invested within the 90 day period will be applied as principal proceeds. The replenishment collateral must meet minimum standards outlined in the portfolio criteria, including: the maximum weighted average rating factor, maximum weighted average life, minimum weighted average spread and coupon tests. Furthermore, the originator may substitute or repurchase loans to improve the portfolio up to a limit of 20% of the initial collateral balance. After the replenishment period the notes will be redeemed pro rata on each pro rata payment date until a sequential payment date is triggered. A sequential payment date is triggered following a servicer default, event of default, a downgrade event, the existence of any class D accrued payable, the occurrence of the sequential pool condition (aggregate outstanding loan balance is less than 50% of expected aggregate outstanding loan balance) or a ratings confirmation failure, or when the 'CCC' excess condition ('CCC' excess amount is less than 12.8% of aggregate outstanding loan balance) is not satisfied.

This transaction also features an additional principal amount, which serves as a zero tolerance overcollateralization test that diverts interest to pay down notes to the extent that the aggregate principal balance of the notes exceeds the outstanding balance of the performing loans. For the first payment period, $1 million will be placed in the reserve fund, which will be applied as interest collection under the priority of payments.

As part of the rating process for this transaction, Fitch stressed the underlying asset portfolio with a variety of default and interest rate scenarios, designed to simulate varying economic conditions. In addition, to address the revolving feature of this transaction Fitch stressed the portfolio to certain worst case parameters including WARF, weighted average spread, weighted average coupon and weighted average life.

For further details on the stress tests Fitch employed rating ACAS Business Loan Trust 2006-1, see the presale report, 'ACAS Business Loan Trust 2006-1,' dated July 18, 2006, available on the Fitch Ratings web site at www.fitchratings.com.

For more information on the Fitch vector model, see 'Global Rating Criteria for Collateralized Debt Obligations,' dated Sept. 14, 2003 and also available on the Fitch Ratings web site www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.