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ACA Financial Guaranty Corporation

ACA Capital, through its insurance operating subsidiary, ACA Financial Guaranty Corporation, provides A rated credit enhancement to underserved sectors of the new issue and secondary municipal markets. ACA's target market is comprised of municipal obligors pledging tax support or project based revenues that are rated BBB or BB categories or are non-rated and, in the opinion of ACA, have a credit quality that is at least equivalent to BB. Determining whether a credit qualifies for ACA insurance requires knowledgeable credit analysis and innovative structuring provided by their underwriters, averaging 20 years of industry experience.
ACA's insurance provides an A rated guaranty of full and timely principal and interest payments, which is unconditional and irrevocable. The credit enhancement benefits both the issuers of the bonds and the investors in the bonds. The issuer will realize lower borrowing costs and broader access to capital markets, while the investor enjoys greater liquidity and price protection.
ACA Financial Guaranty Corporation provides an A rated financial guaranty on the full and timely payment of regularly scheduled debt service to underserved segments of the municipal finance market. Specifically, ACA's financial guaranty business focuses on low-investment grade and non-investment grade municipal issuers. Although inherently creditworthy, these issuers have limited capital markets access and cannot obtain guaranties from the broader financial guaranty insurance market under current rating agency guidelines. The Company’s team of experienced underwriters provides the rigorous analysis and creative structuring necessary to qualify submissions for the company’s insurance.
They provide financial guaranty insurance on municipal and other public finance bonds that guarantee to the investor the timely payment of interest and the ultimate payment of principal on such obligations. Through their financial guaranty insurance subsidiary, rated A by Standard & Poor’s, they target low investment grade, non-investment grade and unrated sectors of the market. As of December 31, 2005 they had 6.1 billion dollars of net par insured in their municipal finance portfolio.

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