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| Syncora Guarantee Inc. Completes Comprehensive Restructuring |
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Financial Guarantor Closes 2009 MTA and Expects to Complete Remediation of
Approximately The NYID approved the transactions relating to the restructuring and
directed that, upon the completion of each of the transactions so approved,
the Company will confirm to the NYID that such closings have occurred and the
impairment to its policyholders' surplus has been removed. The NYID will
review such submission and notify the Company when the restriction on claims
payments under the existing claims suspension order issued on "We are pleased to announce this very significant and unprecedented
restructuring in the financial guarantee industry. We expect that the
successful completion of all the various transactions will restore Syncora
Guarantee to positive policyholders' surplus," commented Acting Chief Executive Officer Following the closing of the 2009 MTA, Syncora Guarantee's financial
counterparties received 23,736,349 common shares of Additionally, Information Regarding Syncora Guarantee's Financial Position Following the Consummation of the 2009 MTA, the RMBS Tender Offer and Related Transactions As of The RMBS Tender Offer closed on On a SAP basis, after giving effect to the transactions contemplated by
the 2009 MTA, the RMBS Tender Offer and related transactions on a pro forma
basis as if they had been consummated on Set forth in the table below is certain combined projected pro forma
summary balance sheet financial information of Syncora Guarantee and Syncora
Capital Assurance, prepared in accordance with SAP, which gives effect to
transactions contemplated by the 2009 MTA, the RMBS Tender Offer and related
agreements as if they had been consummated on
SYNCORA GUARANTEE
Expected
to be
Reported Pro Forma Pro Forma
($ amounts in millions) 06/30/2009 Adjustments 06/30/2009
Assets
Cash, invested assets,
and accrued investment
income $3,228 $(542) (a) $391
(364) (b)
(1,249) (c)
(572) (d)
(111) (e)
Investment in subsidiaries
SGI-UK - 40 (f) 40
SCAI - 542 (a) 281
- (261) (b)
Other assets 211 105 (d) 316
Total Assets $3,439 $(2,412) $1,027
Liabilities and Capital
and Surplus
Liabilities:
Unpaid losses and loss
adjustment expenses $6,353 $(4,624) (c) 384
(1,293) (d)
(52) (e)
Deferred premium
revenue 711 (438) (b) 273
Mandatory contingency
reserves 296 (187) (b) 98
(2) (c)
(1) (d)
(7) (e)
Other liabilities 77 5 (c) 91
- 9 (e) -
Total liabilities 7,437 (6,590) 847
Capital and Surplus:
Surplus notes - 625 625
Preferred stock -
Series B
non-cumulative
perpetual 200 200
Common stock and
additional
paid-in-capital 2,014 2,014
Accumulated deficit (6,212) 2,747 (c) (2,659)
827 (d)
(61) (e)
- 40 (f) -
Total Capital
and Surplus (3,998) 4,178 180
Total Liabilities
and Capital and
Surplus $3,439 $(2,412) $1,027
SYNCORA CAPITAL ASSURANCE
Pro Forma
($ amounts in millions) 06/30/2009
Assets
Cash, invested assets,
and accrued investment
income $542 (a)
364 (b)
Investment in subsidiaries
SGI-UK
SCAI
Other assets -
Total Assets $905
Liabilities and Capital
and Surplus
Liabilities:
Unpaid losses and loss
adjustment expenses $-
Deferred premium
revenue 438 (b)
Mandatory contingency
reserves 187 (b)
Other liabilities -
Total liabilities 625
Capital and Surplus:
Surplus notes 350 (a)
Preferred stock -
Series B
non-cumulative
perpetual
Common stock and
additional
paid-in-capital 192
Accumulated deficit (261) (b)
-
Total Capital
and Surplus 280
Total Liabilities
and Capital and
Surplus $905
(a) To record capitalization of Syncora Capital Assurance. (b) To record reinsurance and novation of certain business to Syncora Capital Assurance from Syncora Guarantee. (c) To record the commutation of certain of Syncora Guarantee's CDS contracts and related insurance policies. (d) To record the in-substance defeasement of RMBS tendered in connection with the RMBS Transaction Agreement, resumption of RMBS claim payments and direct purchases of RMBS. (e) To record certain other transactions related to the 2009 MTA. (f) To record permitted practice to admit the carrying value of Syncora Guarantee's UK subsidiary. The table below provides a summary of combined net par outstanding and
loss estimates for Syncora Guarantee and Syncora Capital Assurance expected as
of
SYNCORA GUARANTEE AND SECURITY CAPITAL ASSURANCE
ON A COMBINED BASIS
Expected Pro Forma
Net Par Net Par
Outstanding Outstanding
Amounts in Millions 06/30/2009 Adjustments (1) 06/30/2009
Public Finance $53,065 $(477) $52,588
RMBS 8,303 (3,870) 4,433
ABS CDOs 14,117 (13,855) 262
CDOs of CDOs 1,425 (1,119) 306
All other 54,860 (379) 54,482
Total $131,771 $(19,700) $112,071
Expected Pro Forma
Loss Loss
Reserves Reserves
06/30/2009 Adjustments (1) 06/30/2009
Public Finance $34 $- $34
RMBS 1,588 (1,286) 302
ABS CDOs 4,318 (4,305) 13
CDOs of CDOs 338 (328) 10
All other 75 (50) 25
Total $6,353 $(5,969) $384
(1) Represents pro forma adjustments giving effect to the transactions
contemplated by the 2009 MTA, the RMBS Tender Offer and related agreements as
if they had been consummated on About
Investor and Media Contact:
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 Syncora Guarantee's control. These factors include,
but are not limited to: the suspension of all claims payments; Syncora
Guarantee's ability to maintain minimum policyholders' surplus following the
closing of the 2009 MTA and the RMBS Tender Offer; higher losses on guaranteed
obligations due to deterioration in the credit and mortgage markets; the
suspension of writing substantially all new business; the effect of adverse
developments in the credit and mortgage markets on Syncora Guarantee's
in-force business; higher loss reserves estimates and the adequacy of the loss
reserves; uncertainty as to the fair value of CDS contracts and liabilities
thereon; decision by Syncora Guarantee's regulators to take regulatory action
such as rehabilitation or liquidation of Syncora Guarantee at any time;
Syncora Capital Assurance being required to make mark-to-market termination
payments under its CDS contracts; Syncora Guarantee's ability to continue as a
going concern; the performance of invested assets; payment of claims on
guaranteed obligations, including Jefferson County,
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