NEW YORK, Jan. 15 /PRNewswire-FirstCall/ -- Syncora Holdings Ltd. ("Syncora") today announced that its wholly owned New York financial guarantee subsidiary, Syncora Guarantee Inc. (the "Company"), expects, based on information available to date, to record in the fourth quarter of 2009 a material decrease in its statutory policyholders' surplus principally as a result of an increase of its statutory basis reserves for unpaid losses and loss adjustment expenses on its guarantees of residential mortgage-backed securities, partially offset by ongoing remediation efforts by the Company. The Company reported a policyholders' surplus of $181.7 million as of September 30, 2009 and expects that it will remain in compliance with the New York State Insurance Department's (the "NYID") minimum policyholders' surplus requirement of $65 million.
In addition, in July 2009 the Company completed substantially all the steps of its comprehensive restructuring, except for one remaining transaction, which resulted in the Company's return to compliance with its minimum policyholders' surplus as of September 30, 2009. When the remaining transaction is ready to close, the Company expects to make a submission to the NYID confirming that such closing is ready to proceed and that, upon closing, the policyholders' surplus will not be impaired and requesting that the claims suspension order of April 10, 2009 be lifted. Once the claims suspension order is lifted and the closing occurs, the Company expects to recommence payment of claims, including all suspended payments since April 27, 2009. The Company is currently in advanced negotiations with respect to the remaining transaction and anticipates that it may be able to close the transaction in the near future, subject to obtaining NYID approval and a waiver from certain parties. However, there can be no assurance that the transaction will close in the near future or at all. Furthermore, there can be no assurance that the NYID will accept the Company's submission and lift the claims suspension order.
Finally, Syncora announced that, effective January 19, 2010, its U.S. headquarters will be relocated to One Worldwide Plaza, 825 8th Avenue, 24th Floor, New York, New York 10019-7416. Telephone and facsimile numbers will remain the same.
About Syncora Holdings Ltd.
Syncora Holdings Ltd. is a Bermuda-domiciled holding company. Syncora Guarantee Inc. is a wholly owned subsidiary of Syncora Holdings Ltd. For more information, please visit http://www.syncora.com/.
FORWARD-LOOKING STATEMENTS
This release contains statements about future results, plans and events that may constitute "forward-looking" statements. 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: the Company's ability to maintain minimum policyholders' surplus; higher losses and adverse development of reserves on guaranteed obligations due to deterioration in the credit and mortgage markets; ability to reach agreement on remaining restructuring transaction and obtain approvals and waivers; the suspension of writing substantially all new business; higher loss reserves estimates and the adequacy of the loss reserves; uncertainty as to the fair value of credit default swap ("CDS") contracts and liabilities thereon; decision by the Company's regulators to take regulatory action such as rehabilitation or liquidation of the Company at any time; Syncora Capital Assurance Inc. being required to make mark-to-market termination payments under its CDS contracts; the Company's ability to continue as a going concern; the performance of invested assets; payment of claims on guaranteed obligations, including Jefferson County, Alabama and residential mortgage-backed securities ("RMBS"); bankruptcy events involving counterparties to CDS contracts; the potential loss of certain control rights under certain financial guarantee insurance; non-payment of premium and makewholes owed or cancellation of policies; impact of the non-payment of dividends on Syncora's series A preference shares on the composition of Syncora's Board of Directors; uncertainty in portfolio modeling which makes it difficult to estimate potential paid claims and loss reserves; reduced availability of funds due to the purchase of certain RMBS and the potential inability to convert those assets to cash at their carrying value; reduced availability of funds due to capitalization of Syncora Capital Assurance Inc.; reduced availability of funds due to consideration paid in connection with the master transaction agreement between the Company and certain financial counterparties to the Company's CDS contracts (the "2009 MTA"); potential adverse developments at Syncora Capital Assurance Inc. and recapture of business to be ceded to Syncora Capital Assurance Inc. under the 2009 MTA; the financial condition of Syncora Guarantee (U.K.) Limited and action by the Financial Services Authority; requirement of the Company to provide Syncora Guarantee (U.K.) Limited with sufficient funds to maintain its minimum solvency margin; challenges to the Master Commutation, Release and Restructuring Agreement dated July 28, 2008, as amended, and related commutations and releases and/or the 2009 MTA; ratings downgrades or the withdrawal of ratings; defaults by counterparties to reinsurance arrangements; the interconnectedness of risks that affect the Company's reinsurance and insurance portfolio and financial guarantee products; termination payments related to less traditional products, including CDS contracts, possibly in excess of current resources; nonpayment of premiums by policyholders; changes in accounting policies or practices or the application thereof; uncertainty with respect to the valuation of CDS contracts; changes in officers or key employees; further deterioration in general economic conditions, including as a result of the financial crisis as well as inflation or deflation, interest rates, foreign currency exchange rates and other factors and the effects of disruption or economic contraction due to catastrophic events or terrorist acts; the commencement of new litigation or investigations or the outcome of current and new litigation or investigations; legislative or regulatory developments, including changes in tax laws and regulation of mortgages; losses from fraudulent conduct due to unconditional and irrevocable nature of financial guarantee insurance; problems with the transaction servicers in relation to structured finance transactions; limitations on the availability of net operating loss carryforwards; uncertainty as to federal income tax treatment of CDS contracts; liquidity risks including due to undertakings with the NYID; conflicts of interests with significant shareholders of Syncora; limitations on the transferability of the common shares of Syncora and other additional factors, risks or uncertainties described in Syncora's historical filings with the Securities and Exchange Commission, including in its Annual Report on Form 10K for the fiscal year ended December 31, 2008, as amended and in Syncora's financial statements posted on its website at http://www.syncora.com/. Readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date they are made. Syncora 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.
Syncora Holdings Ltd.; Syncora Guarantee Inc.
CONTACT: Investors and Media: Michael Corbally of Syncora Holdings Ltd.,
+1-212-478-3400, michael.corbally@scafg.com
Web Site: http://www.syncora.com/
http://www.scafg.com/
