Edgar Filing: ACA Capital Holdings Inc

Ownership Submission

FORM 4

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL

OMB Number:

3235-0287

Expires:

January 31, 2005

Estimated average burden hours per response...

0.5

(Print or Type Responses)

1. Name and Address of Reporting Person ^*

BSMB/ACA LLC

2. Issuer Name and Ticker or Trading Symbol
ACA Capital Holdings Inc [ACA]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

_____ Director	__X__ 10% Owner
_____ Officer (give title below)	_____ Other (specify below)

(Last)

(First)

(Middle)

C/O BEAR, STEARNS & CO. INC., 383 MADISON AVENUE, 40TH FLOOR

3. Date of Earliest Transaction (Month/Day/Year)
11/15/2006

(Street)

NEW YORK, NY 10179

4. If Amendment, Date 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

(City)

(State)

(Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	11/15/2006		C		10,113,982.98	A	⁽¹⁾	10,113,982.98	D

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
	Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.		SEC 1474 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security
(Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code
(Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date
(Month/Day/Year)

7. Title and Amount of Underlying Securities
(Instr. 3 and 4)

8. Price of Derivative Security
(Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)

11. Nature of Indirect Beneficial Ownership
(Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Series B Senior Convertible Preferred Stock

$ 0

11/15/2006

1,685,663.83

⁽¹⁾

Common Stock

10,113,982.98

$ 0

Reporting Owners

Reporting Owner Name / Address	Relationships
Reporting Owner Name / Address	Director	10% Owner	Officer	Other
BSMB/ACA LLC C/O BEAR, STEARNS & CO. INC. 383 MADISON AVENUE, 40TH FLOOR NEW YORK, NY 10179		X
HOWARD JOHN 80 IRVING PL. NEW YORK, NY 10003		X

Signatures

Stacy Tyson, by power of attorney		11/16/2006
^**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(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).
(1)	The Series B Convertible Preferred Stock converted into the issuer's common stock on a 6-for-1 basis upon the closing of the initial public offering of the issuer's common stock and had no expiration date.
Remarks: The reported securities are directly owned by BSMB/ACA LLC. This report is also being filed by John D. Howard, a senior managing director of Bear, Stearns & Co. Inc., a subsidiary of The Bear Stearns Companies Inc. Through his ownership of JDH Management LLC ("JDH"), Mr. Howard exercises investment discretion over the reported securities held by the several investment limited partnerships controlled by Bear Stearns Merchant Capital II, L.P. (collectively, "BSMBP II") and BSMB/ACA LLC. JDH is the manager of Bear Stearns Merchant Manager II, LLC, which is the manager of BSMB/ACA LLC and the special limited partner of Bear Stearns Merchant Capital II, L.P. The Bear Stearns Companies Inc. is the managing member of Bear Stearns Merchant GP II, LLC, which is the general partner of Bear Stearns Merchant Capital II, L.P., the general partner of each of the several investment partnerships that comprise BSMBP II. Mr. Howard and The Bear Stearns Companies Inc. share investment and voting power with respect to shares owned by BSMBP II and BSMB/ACA LLC, but disclaim beneficial ownership of such shares, except to the extent of their pecuniary interests therein. The reporting persons may be deemed members of a Section 13(d) "group" pursuant to the issuer's stockholders agreement. This filing shall not be deemed an admission that any reporting person is, for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended or otherwise, a member of a group or the beneficial owner of any securities in excess of the amount in which the reporting person has a pecuniary interest. Exhibit 99: Joint Filer Information.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.