Barrons: ACA a “ticking bomb”

ACA Capital Holdings (ACA)

ACA Capital Holdings, Inc., a holding company, provides financial guaranty insurance products to participants in the global credit derivative, structured finance capital, and municipal finance capital markets. It also provides asset management services to specific segments of the structured finance capital markets. The company selects, structures, and sells credit protection principally on highly rated liabilities of structured financings, including layers of risk of single tranche transactions and fully distributed CDOs, MBS and ABS transactions. … In addition, it also serves as an asset manager of collateralized debt obligations for the benefit of the third party investors.

Barrons refers to ACA as a “ticking bomb” with a 181:1 capital leverage ratio in subprime that could go either way.

Wall Street firms whose $61 Billion of securities ACA insured, would also be hurt. We are talking about Bear Stearns (BSC), Merrill Lynch (MER), Lehman Brothers (LEH), and Citigroup (C) along with some 25 other Wall Street counterparties.

ACA Capital Holdings (ACA)


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