Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Pool
On November 30, 2006, a series of certificates, entitled ACE Securities Corp. Home Equity Loan Trust, Series 2006-SD3, Asset Backed Pass-Through Certificates (the “Certificates”), were issued pursuant to a pooling and servicing agreement, dated as of October 31, 2006 (the “Agreement”), attached hereto as Exhibit 4.1, among ACE Securities Corp. as depositor (the “Depositor”), Ocwen Loan Servicing, LLC as a servicer, Wells Fargo Bank, N.A. as master servicer and securities administrator and HSBC Bank USA, National Association as trustee (the “Trustee”). The Certificates consist of ten classes of certificates (collectively, the “Certificates”), designated as the “Class A Certificates”, “Class M-1 Certificates”, “Class M-2 Certificates”, “Class M-3 Certificates”, “Class M-4 Certificates”, “Class M-5 Certificates”, “Class CE-1 Certificates”, “Class CE-2 Certificates”, “Class P Certificates” and “Class R Certificates”. The Certificates evidence in the aggregate the entire beneficial ownership interest in a trust fund (the “Trust Fund”), consisting of a pool of mortgage loans (the “Mortgage Pool’”) of conventional, one- to four- family, adjustable-rate and fixed-rate, first lien and second lien mortgage loans having original terms to maturity up to 40 years (the “Mortgage Loans”). The Mortgage Pool consists of Mortgage Loans having an aggregate principal balance of approximately $153,654,981 as of the Cut-off Date. The Mortgage Loans were purchased pursuant to the Mortgage Loan Purchase Agreement, dated November 30, 2006, between DB Structured Products, Inc. as seller and the Depositor (the “Mortgage Loan Purchase Agreement”). The Class A Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates and Class M-5 Certificates were sold by Depositor pursuant to the Second Amended and Restated Underwriting Agreement, dated June 24, 1999, as amended and restated to and including January 25, 2006, between the Depositor and Deutsche Bank Securities Inc., and the Terms Agreement, dated November 29, 2006 between the Depositor and Deutsche Bank Securities Inc. (collectively, the “Underwriting Agreement”).
The Certificates, other than the Class CE-1 Certificates, Class CE-2 Certificates, Class P Certificates and Class R Certificates, have the following initial Certificate Principal Balances and Pass-Through Rates:
Class | | Initial Certificate Principal Balance(1) | | Pass-Through Rate |
| A | | $ 113,090,000 | | One-Month LIBOR + 0.30%(2)(3) |
| M-1 | | $ 14,981,000 | | One-Month LIBOR + 0.70%(2)(3) |
| M-2 | | $ 9,219,000 | | One-Month LIBOR + 1.40%(2)(3) |
| M-3 | | $ 3,841,000 | | One-Month LIBOR + 2.00% (2)(3 |
| M-4 | | $ 2,151,000 | | One-Month LIBOR + 2.00%(2)(3) |
| M-5 | | $ 1,998,000 | | One-Month LIBOR + 2.00%(2)(3) |
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(1) Approximate.
(2) The pass-through rate for each class of Offered Certificates will be subject to the Net WAC Pass-Through Rate as described in the prospectus supplement under “Description of the Certificates-Pass-Through Rates.”
(3) After the optional termination date, the margin applicable to the Class A Certificates will increase by 100% and the margins applicable to the Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates will increase by the lesser of (i) the product of the applicable margin and 50% and (ii) 0.50%.
The Certificates, other than the Class CE-1 Certificates, Class CE-2 Certificates, Class P Certificates and Class R Certificates, and the Mortgage Loans are more particularly described in the Prospectus Supplement, dated November 29, 2006 (the “Prospectus Supplement”), and the Prospectus, dated April 18, 2006, as previously filed with the Securities and Exchange Commission pursuant to Rule 424(b). The Class CE-1 Certificates, Class CE-2 Certificates, Class P Certificates and Class R Certificates have not been and will not be publicly offered by the Depositor. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Prospectus Supplement.
