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Investor InformationAnalyst Communications/PresentationsStatement

Statement on FSA's Exposure to ACA

December 21, 2007

ACA Financial Guaranty Corporation (ACA) provides $1.1 billion of reinsurance to FSA in 9 transactions, all municipal bonds of U.S state and local governments. This ceded par amount is equivalent to less than 0.3% of FSA's total net par exposure. The transactions are performing well, with underlying internal credit ratings of Double-A (60.1%), Single-A (38.2%) and Triple-B (1.3%).

Additionally, FSA has second-to-pay insurance in force on U.S. municipal bonds that carry primary ACA insurance, totaling $25.7 million of net par insured, of which $16.2 million have been called for redemption on January 1, 2008. Of the remaining $9.5 million, none of the individual exposures exceeds $2.4 million.

FSA has no direct primary corporate exposure to ACA in its insurance company and Financial Products investment portfolios or in the reported underlying names in FSA-insured pooled corporate obligations.