Standard & Poor's Reports Subprime Mortgage Exposure Does Not Threaten Stability of ACA Financial Guaranty's Single "A" Financial Strength Rating

Business Wire, August 3, 2007

NEW YORK -- ACA Capital Holdings, Inc. (NYSE: ACA) today announced that Standard & Poor's has published its report entitled "U.S. Bond Insurers Withstand Subprime Stress," concluding that, in spite of the well-documented deterioration in the world of subprime mortgages, this sector is not an apparent threat to the rating stability of the bond insurers. That group includes ACA Financial Guaranty Corporation and its single "A" financial strength rating. Alan S. Roseman, ACA Capital's President and Chief Executive Officer remarked "S&P has conducted a responsible and extremely conservative analysis of ACA Capital's subprime exposure and has clearly found that ACA Financial Guaranty's financial strength rating would not be impaired. ACA Financial Guaranty's single "A" rating and Stable outlook from S&P (published by S&P on June 8, 2007) are effectively re-confirmed by this latest report."

ACA Capital is a holding company that provides asset management services and credit protection products to participants in the global credit derivatives markets, structured finance capital markets and municipal finance capital markets. ACA Capital's asset management services are provided through its asset management subsidiaries, ACA Management, L.L.C. and ACA Capital Management (U.K.) Pte. Limited, and its credit protection products are provided through its "A" rated financial guaranty insurance subsidiary, ACA Financial Guaranty Corporation. ACA Capital Management (U.K.) Pte. Limited is authorized and regulated by the Financial Services Authority.

ACA Capital's common stock is listed on the New York Stock Exchange under the symbol "ACA". More information can be found at www.aca.com. The information on our website is not included or incorporated by reference into this release.

Cautionary Statement Regarding Forward-Looking Statements

This press release, the slide presentation and the Company's Quarterly Operating Statement contain 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 President and Chief Executive Officer's remarks, statements regarding certain business strategies and objectives and projections of revenues and expenses, and ACA Capital's prospects as a whole, could be affected by many events. These events include difficulties with the execution of 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 that 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, 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.