NEW YORK, Dec. 4, 2013 /PRNewswire/ -- Syncora Holdings Ltd. ("Syncora") today announced that its wholly owned, New York financial guarantee insurance subsidiary, Syncora Guarantee Inc. (the "Company"), has settled all litigation and claims and that it has commuted all its insurance policies issued in connection with the Jefferson County, Alabama ("Jefferson County") Sewer Warrants (the "Warrants") pursuant to the consensual plan of debt adjustment of Jefferson County (the "Plan"). As provided by the Plan, the Company also received a partial recovery on claims totaling $246 million, including claims with respect to certain Warrants it owned as a result of past payments under its insurance policies. Going forward, the Company will have no insurance exposure to, and expects to hold no warrants or other debt instruments issued by, Jefferson County. In connection with the Plan, the Company was released by all relevant parties from any legal claims against it in connection with its insurance of the Warrants.
In exchange for the commutation of its insurance policies and partial payment in respect of the Warrants it owned, the Company released Jefferson County and JP Morgan Chase Bank N.A. and JP Morgan Securities from all legal claims held by the Company against them in connection with the Warrants.
The Company's losses with respect to Jefferson County are within its established loss reserves. While the combined effects of the foregoing positively affect the Company's cash position, it is not expected to mitigate the potential "liquidity mismatch" between the Company's expected future medium to long-term claim payments and recoveries relating to such claims and the other significant risks and uncertainties, as described in the Company's most recent financial statements.
About Syncora Holdings Ltd.
Syncora Holdings Ltd. (OTC: SYCRF) is a Bermuda-domiciled holding company. Syncora Guarantee Inc. and Syncora Capital Assurance Inc. are wholly owned subsidiaries of Syncora Holdings Ltd.
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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 performance of invested assets; payment of claims on guaranteed obligations, including residential mortgage-backed securities ("RMBS"); and actions that may be required in order to meet anticipated liquidity and surplus needs; the Company's ability to maintain minimum policyholders' surplus; higher losses and adverse development of reserves on guaranteed obligations due to continued deterioration in the credit and mortgage markets; reduced availability of funds due to the purchase of certain insured bonds 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"); the suspension of writing all new business; 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; bankruptcy events involving counterparties to CDS contracts; the potential loss of certain control rights under certain financial guarantee insurance; non-payment of premium and make wholes 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; 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 Prudential Regulation Authority and the Financial Conduct Authority; requirement of the Company to provide Syncora Guarantee (U.K.) Limited with sufficient funds to maintain its minimum solvency margin; challenges related to 2009 MTA and any commutations and releases; 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; exposure to large refinancing risks; nonpayment of premiums by policyholders; changes in accounting policies or practices or the application thereof; 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 carry forwards; uncertainty as to federal income tax treatment of CDS contracts; liquidity risks including due to timing of claims payments and reduced availability of funds undertakings with the New York State Department of Financial Services ("NYDFS"); 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 NYDFS or 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, the Company's and Syncora Capital Assurance Inc.'s financial statements posted on its website at 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.
SOURCE Syncora Holdings Ltd.