SCA Stellus Capital Investment Corporation

SCA Subsidiary XL Capital Assurance Inc. Expects to Make $10.6 Million Payment HAMILTON, Bermuda, June 2 /PRNewswire-FirstCall/ -- Security Capital Assurance Ltd (NYSE:SCA) (the "Company" or "SCA") commented today on the current financial crisis in Jefferson County, Alabama ("the County"). XL Capital Assurance Inc. ("XLCA"), SCA's primary financial guarantee insurance subsidiary, expects that as part of an agreement entered into with the County, it will make a $10.6 million claim payment pursuant to the terms of the insurance policies it provides for the benefit of the holders of Jefferson County's sewer warrants. The claim payment is expected to be made on Tuesday, June 3, 2008. "XL Capital Assurance is committed to honoring the terms of the financial guarantee it provides to Jefferson County's bondholders," said Edward Hubbard, SCA Executive Vice President and President of XLCA. "The payment we are making supports the County's efforts to resolve its current circumstances." XLCA insures payment of scheduled debt service on the County's sewer warrants that are backed by a pledge of all the County's net sewer revenues. The County is required under the covenants of the indenture governing the warrants to set sewer rates at a level sufficient to generate net sewer revenues that will allow it to meet all of the County's sewer debts. The County is required to reimburse XLCA in full for any payments made under the policies. However, in conjunction with the payment, the County, its bank creditors, and XLCA entered into an agreement whereby XLCA will refrain from exercising its rights to receive reimbursement from the County for the payment until July 31, 2008. Pursuant to the agreement, the County is expected to continue to make good faith efforts to resolve its current debt crisis, and XLCA's agreement to refrain from exercising its rights is subject to, among other things, the demonstration of good faith negotiations by the County in this regard. "We understand that the County is pursuing constructive solutions to its debt situation and, while there can be no guarantee that the County will be able to reach a successful resolution of the current situation, we look forward to seeing additional progress made over the next 60 days," commented Hubbard. As of June 2, 2008, the Company's exposure to Jefferson County was $810 million, net of reinsurance. XLCA has not established any loss reserves at this time in connection with Jefferson County. About Security Capital Assurance Security Capital Assurance Ltd is a Bermuda-domiciled holding company whose common shares are listed on the New York Stock Exchange (NYSE:SCA). For more information please visit http://www.scafg.com/ . Contact: Investors Frank Constantinople +1 441-279-7450 Media Michael Gormley +1 441-279-4750 Michele Loguidice +1 212-333-3810 FORWARD-LOOKING STATEMENTS This release contains statements about future results, plans and events that may constitute "forward-looking" statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned that these statements are not guarantees of future results, plans or events and such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's control. These factors include, but are not limited to: recent and future rating agency statements and ratings actions; the outcome of the Company's dispute with Merrill Lynch International concerning the Company's termination of seven credit default swap ("CDS") contracts; the Company's ability to successfully implement its strategic plan; higher risk of loss in connection with obligations guaranteed by the Company due to recent deterioration in the credit markets stemming from the poor performance of subprime residential mortgage loans; the suspension of writing substantially all new business and the Company's ability to continue to operate its business in its historic form; the development and implementation of a strategic plan; developments in the world's financial and capital markets that adversely affect the performance of the Company's investments and its access to such markets; the performance of invested assets, losses on credit derivatives or changes in the fair value of credit derivatives; the availability of capital and liquidity; the timing of claims payments and the receipt of reinsurance recoverables; greater frequency or severity of claims and loss activity including in excess of the Company's loss reserves; changes in the Company's reinsurance agreements with certain of its subsidiaries; the impact of provisions in business arrangements and agreements triggered by the ratings downgrades; the impact of other triggers in business arrangements including CDS contracts; changes in regulation, tax laws, legislation or accounting policies or practices; changes in officers; general economic conditions; changes in the availability, cost or quality of reinsurance or retrocessions; possible downgrade of the Company's reinsurers; possible default by the counterparties to the Company's reinsurance arrangements; the Company's ability to compete; changes that may occur in Company operations and ownership as the Company matures; and other additional factors, risks or uncertainties described in Company filings with the SEC, including in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and also disclosed from time to time in subsequent reports on Form 10-Q and Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company does not undertake to update forward- looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made. DATASOURCE: Security Capital Assurance Ltd; XL Capital Assurance Inc. CONTACT: Investors, Frank Constantinople, Security Capital Assurance, +1-441-279-7450, ; Media, Michael Gormley, Security Capital Assurance, +1-441-279-4750, , or Michele Loguidice, The Brunswick Group, +1-212-333-3810, , for Security Capital Assurance Web site: http://www.scafg.com/

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