Syncora Fails to Renew Forbearance on CDS Contracts With Banks

Syncora Holdings Ltd. (SYCRF), a bond insurer seeking to restructure contracts on securities backed by subprime mortgages, failed to obtain an extension on a forbearance agreement with banks that expired Oct. 31.

``The extensions provided by the agreement have expired and we continue to work with the financial counterparties to extend them but there can be no assurance that any additional extensions will be obtained or that the negotiations will ultimately result in an agreement,'' New York-based Syncora said in a filing today with the U.S. Securities and Exchange Commission.

On July 28, Syncora announced a plan to cancel $3.7 billion of guarantees on collateralized debt obligations held by Merrill Lynch & Co. in exchange for a $500 million payment. Syncora also agreed to set aside $820 million to cover ``commuting, terminating, amending or restructuring existing agreements'' with counterparties.

To contact the reporter on this story: Christine Richard in New York at crichard5@bloomberg.net.

To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net

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