S&P Places ACA On Negative Watch

Standard & Poor’s today placed on watch for downgrade ACA Capital’s A rating due to the company’s $1 billion third-quarter net loss, which S&P analysts think will inhibit ACA’s ability to attract future business.

  • 12 Nov 2007
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--Aaron Johnson

Standard & Poor’s today placed on watch for downgrade ACA Capital’s A rating due to the company’s $1 billion third-quarter net loss, which S&P analysts think will inhibit ACA’s ability to attract future business. Should ACA get downgraded, the company would have to answer liquidity calls on its $1.7 billion of unrealized structured credit mark-to-market losses (TS, 11/08), Alan Roseman, ACA ceo, said during the earnings call Thursday.

An action on ACA’s rating is expected within 90 days. Of the 15 monolines rated by S&P, ACA is the only one with an A rating, and also the only one rated by one agency. AA-rated PMI Guarantee is the only other S&P-rated monoline on negative watch while CIFG and RAM Reinsurance are both on negative outlook. “They’re just [in trouble],” an official at one CDO manager said of ACA. “Their main reputation is as a CDO asset manager and a lot of their CDOs are getting [downgraded]. We never saw very many ACA-wrapped deals.”

Since 1990, 59% of all companies placed on negative watch by S&P were downgraded, 35% have been affirmed, 5% had their rating withdrawn and 1% was were upgraded.

ACA officials did not return calls for comment.

  • 12 Nov 2007

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 82,367.33 238 12.89%
2 Bank of America Merrill Lynch 71,317.58 219 11.16%
3 Wells Fargo Securities 62,984.09 198 9.86%
4 JPMorgan 45,920.23 145 7.19%
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