ACA Financial Guaranty Corporation, a subsidiary of ACA Capital Holdings, Inc. (OTC BB: ACAH.PK), announced today that it has entered into a letter of intent with FSI Capital, LLC (“FSI Capital”) to sell its U.S. ABS and Corporate Credit CDO asset management business. FSI Capital, through its affiliates and subsidiaries, manages 17 CDOs totaling approximately $7.5 billion.
The Company also announced today that it has entered into a letter of intent with Resource Financial Fund Management, Inc. (“RFFM”), a wholly-owned subsidiary of Resource America, Inc., and the parent company of Apidos Capital Management, LLC, to sell its U.S. CLO asset management business. Apidos Capital Management has closed 8 CLOs with approximately $2.8 billion of assets under management.
Each of the transactions is subject to final due diligence, the negotiation and execution of a definitive agreement and other standard conditions.
About FSI Capital
FSI Capital is a leading alternative fixed income asset management company focused on financial services, structured finance and real estate. Together with its affiliated companies, FSI Capital has over 40 employees in four offices in the United States. FSI Capital is affiliated with a registered investment adviser.
About Resource America, Inc.
Resource America, Inc. is a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in the commercial finance, real estate and financial fund management sectors. As of November 30, 2007, the company had assets under management of $17.3 billion. RFFM is a registered investment adviser.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains 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 statements regarding certain business strategies and objectives, specifically its comments with regard to the conditions precedent to closing the transactions described above, could be affected by many events. These events include difficulties with the execution of the Company's business strategy or changes in 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 in which 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 ACA Capital Holdings Inc.’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.