Fitch Ratings Affirms ACA ABS 2004-1 Ltd.

NEW YORK -- Fitch Ratings affirms five classes of notes issued by ACA ABS 2004-1 Ltd, (ACA ABS 2004-1). These affirmations are the result of Fitch's review process and are effective immediately:

--$306,041,220 class A-1 notes affirm at 'AAA';

--$49,500,000 class A-2 notes affirm at 'AAA';

--$47,250,000 class B notes affirm at 'AA';

--$17,120,742 class C-1 notes affirm at 'BBB';

--$2,795,223 class C-2 notes affirm at 'BBB'.

ACA ABS 2004-1 is a static collateralized debt obligation (CDO) which closed May 27, 2004. The collateral was selected by ACA Management, LLC. ACA ABS 2004-1 is composed of primarily residential mortgage-backed securities (RMBS), and also contains commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), real estate investment trusts (REIT) and CDO assets.

Since the closing, the collateral has continued to perform. There has been little rating migration in the collateral pool, as the weighted average rating factor has improved slightly from 3.70 ('BBB+/BBB') to 3.63 ('BBB+/BBB'). The overcollateralization ratios have remained stable from deal close to the most recent trustee report dated Sept. 30, 2005. As of the most recent trustee report available, there have been no defaulted assets. There are no assets rated below 'BBB-'.

The ratings on the class A-1, A-2 and B notes address the timely payment of interest and ultimate payment of principal by the legal final maturity date 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 docs.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at (www.fitchratings.com). For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004, available on the Fitch Ratings web site at 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.