Syncora Holdings US Inc. Announces Successful Completion of Tender Offer and Proxy Solicitation

NEW YORK, New York, Aug. 8, 2016 /PRNewswire/ -- Syncora Holdings US Inc. ("SHI"), a wholly owned subsidiary of Syncora Holdings Ltd. ("SHL" and, together with its subsidiaries, "Syncora"), announced today the successful completion of its surplus note exchange offer and proxy solicitation for the Variation (as defined below), which are part of its restructuring transactions.  The closing date for the transactions (including the settlement date for the Exchange Offers and Variation) and the $55 million payment on the Existing SGI Surplus Notes (excluding those Existing SGI Surplus Notes held by Syncora) is expected to occur on August 12, 2016.

Upon closing of the transaction:

• Syncora's overall platform will be de-levered by $280 million (including approximately $195 million from third parties) consisting of the elimination of $250 million of the Existing SHL Preferred Shares (including approximately $165 million held by third parties) and a $70 million discount from holders of Existing SGI Surplus Notes, including a $30 million reduction in Existing SGI Surplus Notes outstanding (including accrued and unapproved interest) and $40 million reallocation to holders of Existing SHL Preferred Shares;
• SHL will have increased its common shares outstanding to 87 million shares from 56 million shares, with such shares being distributed to holders of Existing SHL Preferred Shares and holders of Existing SGI Surplus Notes who participated in the restructuring transactions, representing 35% of the total common shares outstanding;
• Syncora will have enhanced, preserved and protected one of its most valuable assets, its net operating losses. Pursuant to the amended tax sharing agreement, Syncora will reallocate $1.75 billion of excess net operating losses from SGI to SHI, where these net operating losses may be used more broadly; and
• SGI will have received regulatory permission to make and made its first payment on the Existing SGI Surplus Notes since issuance in 2009.

Satisfaction of Conditions Precedent

Expiration of Exchange Offer with Requisite Vote.  On August 5, 2016 at 12:00 Noon, New York City time (the "Expiration Time"), SHI's previously announced private exchange offers ("Exchange Offers") for a portion of Syncora Guarantee Inc.'s ("SGI") outstanding 6% Surplus Notes due 2024 (the "Existing Long-Term Surplus Notes") and SGI's outstanding 5% Surplus Notes due 2011 (the "Existing Short-Term Surplus Notes" and together with the Existing Long-Term Surplus Notes, the "Existing SGI Surplus Notes") for common shares (the "New Securities") of SHL expired.

The settlement of the Exchange Offers remains subject to the closing of the restructuring transactions of which they are part and confirmation, which we expect, that the transaction does not result in aggregate cumulative "owner shifts" in excess of 38.5 percentage points for purposes of Section 382 of the Internal Revenue Code of 1986, as amended and to the satisfaction of other customary closing conditions.

According to Computershare Inc., the exchange agent for the Exchange Offers, an aggregate of approximately 99.83% of the Existing SGI Surplus Notes held by parties other than SGI participated in the Exchange Offers.  This exceeds the minimum participation threshold for the Exchange Offers.

MTA and Tax Sharing Agreement Amendment.  SGI also received sufficient consents from holders of Existing SGI Surplus Notes to amend its master transaction agreement to permit the restructuring transactions of which the Exchange Offers are a part and the amendment of the Syncora group's tax sharing agreement.

Sufficient Favorable Proxies for Variation of Existing SHL Preferred Shares.  The previously announced proxy solicitation by SHL to solicit proxies to vary the rights attached to the Existing SHL Preferred Shares (the "Variation") expired on August 5, 2016 at 12:00 noon, New York City time.  SHL received favorable proxies from external holders of approximately 88.85% of SHL's outstanding Fixed/Floating Series A Perpetual Non-Cumulative Preference Shares, par value US$0.01 (the "Existing SHL Preferred Shares") and no unfavorable votes, which is sufficient to establish a quorum and approve the Variation at the special general meeting of holders of Existing SHL Preferred Shares, scheduled to be held on August 8, 2016.

NYDFS Approval of Transaction, including Payment on Existing SGI Surplus Notes.  SHI is also pleased to announce that the New York Department of Financial Services (the "NYDFS") approved the restructuring transactions, including the Exchange Offers, all other transaction related approvals and payment on the Existing SGI Surplus Notes.  More specifically, the NYDFS approved the amendment to the Syncora group's tax sharing agreement, certain intercompany transfers and the restatement of paid in and contributed and earned surplus for each of SGI and Syncora Capital Assurance Inc. (removing (or lessening in the case of Syncora Capital Assurance Inc.) certain regulatory prohibitions to the payment of dividends by these entities).  In addition, the NYDFS approved a net cash payment to third party holders of $55 million on the Existing SGI Surplus Notes.

Investor Call to Provide Further Details on Transaction

To provide more information about the transaction and our future plans, the Company will host an investor conference call at 8:30 a.m. ET on August 12, 2016.  On the date of the call, management's discussion will be accessible via webcast on the Investor Events page of the Investor Relations section of www.syncora.com or by dialing (877) 512-9165 (U.S. toll-free), or +1 (706) 679-5795 outside the U.S., Puerto Rico and Canada, approximately 10 minutes prior to the scheduled start time and providing conference ID # 626-47-515. Following conclusion of the call, the Company will post a copy of the prepared remarks on its website alongside a replay of the webcast.  The replay will also be available via telephone by dialing (855) 859-2056 (U.S. toll-free), or +1 (404) 537-3406 outside the U.S., Puerto Rico and Canada, and providing conference ID # 626-47-515.

About Syncora Holdings Ltd.

Syncora Holdings Ltd. (OTC: SYCRF) is a Bermuda-domiciled holding company.  Syncora Holdings U.S. Inc., Syncora Guarantee Inc. and Syncora Capital Assurance Inc. are wholly-owned subsidiaries of Syncora Holdings Ltd.  For additional information, please visit www.syncora.com.

Contacts
Michael Corbally
Syncora Holdings Ltd.
(212) 478-3400
[email protected]

Kimberly Kriger
Kekst
(212) 521-4800
[email protected]

Important Information

This press release is for informational purposes only and is not an offer to exchange or a solicitation or acceptance of an offer to exchange, which may be made only pursuant to the terms and conditions of the Confidential Offering Memorandum and Confidential Information Statement, dated July 8, 2016 (as may be amended or supplemented from time to time, the "Offering Memorandum").  In addition, this press release is not a proxy statement or a solicitation of proxies from the holders of SHL's preferred shares.

The Exchange Offers were made and the New Securities are being offered and issued only (a) in the United States, to holders of  Existing SGI Surplus Notes who are "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) or institutional "accredited investors" within the meaning of subsection (1), (2), (3), or (7) of Rule 501(a) under the Securities Act and (b) outside the United States, to holders of Existing SGI Surplus Notes who are not "U.S. persons" (as defined in Rule 902 under the Securities Act) in reliance on Regulation S of the Securities Act.  The New Securities have not been registered under the Securities Act or under any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act, and accordingly, are subject to significant restrictions on transfer and resale as more fully described in the Offering Memorandum and Letter of Transmittal.  The Exchange Offers are subject to the terms and conditions set forth in the Offering Memorandum and Letter of Transmittal.

This press release contains statements about future results, plans and events that may constitute "forward-looking" statements, including the settlement of the Exchange Offers, approval of the Variation, satisfaction or waiver of conditions precedent and payment on the Existing SGI Surplus Notes.  The Company cautions you that the forward-looking information presented in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release.  In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "comfortable with," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology.  Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's control. These risks and uncertainties include, but are not limited to, the factors described in the Company's historical filings with the NYDFS, and in the Company's, Syncora Guarantee Inc.'s and Syncora Capital Assurance Inc.'s GAAP and statutory financial statements, as applicable, 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. 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.

SOURCE Syncora Holdings Ltd.

Related Links

http://www.syncora.com