NYSE Regulation Inc. suspended trading in the company's shares, registered under the ticker symbol "ACA," the morning of Dec. 18. In a statement, the exchange noted ACA had fallen below the continued listing standard that requires average global market capitalization and total stockholders' equity both remain above $75 million.
Although exchange rules provide ACA with 45 days to offer a plan that would bring it into compliance with listing standards within the next 18 months, the company already has provided notice that it doesn't intend to submit such a plan.
"ACA Capital does not believe that it can take steps which will permit it to satisfy the financial continued listing criteria of the NYSE within the 18-month cure period provided for under the NYSE rules and regulations," the company said in a statement. "ACA Capital has been informed by the NYSE that it will commence suspension and delisting procedures as a result of the failure to submit a plan."
A New York-based writer of financial guaranty coverage, ACA went public with a Nov. 9, 2006 offering of 6.9 million shares of common stock, providing an initial capitalization of $89.4 million. However, a string of collateral write-downs related to the subprime mortgage industry — including $1.7 billion in third-quarter pretax mark-to-market losses on a book of structured credit transactions — led the company's share price to plummet.
Shares of ACA closed trading Dec. 17 at 34 cents a share, down 97.9% from the 52-week high of $16.55.
ACA also is currently the subject of a number of putative shareholder class actions filed last month in U.S. District in New York — including suits brought by the firms Abraham Fruchter & Twersky LLP and Coughlin Stoia Geller Rudman & Robbins LLP — charging that the company's IPO registration statement failed to adequately disclose material risks related to ACA's underwriting of collateralized debt obligations.