SEC Form 3
FORM 3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person*
Fortress Investment Holdings LLC

(Last) (First) (Middle)
1345 AVENUE OF THE AMERICAS, 46TH FLOOR

(Street)
NEW YORK NY 10105

(City) (State) (Zip)
2. Date of Event Requiring Statement (Month/Day/Year)
11/09/2006
3. Issuer Name and Ticker or Trading Symbol
ACA Capital Holdings Inc [ ACA ]
4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director 10% Owner
Officer (give title below) X Other (specify below)
See "Remarks"
5. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
Form filed by One Reporting Person
X Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4) 2. Amount of Securities Beneficially Owned (Instr. 4) 3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5) 4. Nature of Indirect Beneficial Ownership (Instr. 5)
Table II - Derivative Securities Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4) 2. Date Exercisable and Expiration Date (Month/Day/Year) 3. Title and Amount of Securities Underlying Derivative Security (Instr. 4) 4. Conversion or Exercise Price of Derivative Security 5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5) 6. Nature of Indirect Beneficial Ownership (Instr. 5)
Date Exercisable Expiration Date Title Amount or Number of Shares
Series B Senior Convertible Preferred Stock (1) (1) Common Stock 963,236.47 (1) I By Drawbridge Special Opportunities Fund (2)
1. Name and Address of Reporting Person*
Fortress Investment Holdings LLC

(Last) (First) (Middle)
1345 AVENUE OF THE AMERICAS, 46TH FLOOR

(Street)
NEW YORK NY 10105

(City) (State) (Zip)
1. Name and Address of Reporting Person*
FORTRESS INVESTMENT GROUP LLC

(Last) (First) (Middle)
1345 AVENUE OF THE AMERICAS
46TH FLOOR

(Street)
NEW YORK NY 10105

(City) (State) (Zip)
1. Name and Address of Reporting Person*
DRAWBRIDGE SPECIAL OPPORTUNITIES ADVISORS LLC

(Last) (First) (Middle)
C/O FORTRESS INVESTMENT GROUP LLC
1345 AVENUE OF THE AMERICAS, 46TH FLOOR

(Street)
NEW YORK NY 10105

(City) (State) (Zip)
Explanation of Responses:
1. The convertible preferred stock has no expiration date and, upon the closing of the initial public offering of the issuer will convert into shares of the issuer's common stock on a six-for-one basis.
2. Drawbridge Special Opportunities GP LLC ("Special Opportunities GP") is the general partner of Drawbridge Special Opportunities Fund LP ("Special Opportunities LP"). Fortress Principal Investment Holdings IV LLC ("FPIH IV") is the sole managing member of Special Opportunities GP. Pursuant to management agreements, Drawbridge Special Opportunities Advisors LLC ("Special Opportunities Advisors") is the manager of Special Opportunities LP. Fortress Investment Group LLC ("FIG") is the sole managing member of Special Opportunities Advisors. FIG is 100% owned by Fortress Investment Holdings LLC. Each reporting person disclaims beneficial ownership of all reported shares except to the extent of its pecuniary interest therein and the inclusion of the shares in this report shall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or otherwise.
Remarks:
The reporting persons may be deemed a member of a Section 13(d) "group" pursuant to the issuer's stockholders agreement. The reporting persons disclaim membership in a "group" and disclaim beneficial ownership of the shares beneficially owned by such other persons.
See signatures included in Exhibit 99.1 11/09/2006
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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