Syncora Holdings Ltd. (SYCRF), a bond insurer seeking to restructure guarantees on mortgage-backed securities, avoided falling short of a capital requirement after New York regulators allowed the company to change its accounting to use other reserves.
Syncora's third-quarter net loss widened to $1.3 billion, or $29.28 a share, from $89.9 million, or $1.40, a year earlier, the Hamilton, Bermuda-based company said in a statement today. Syncora fell to 12 cents, or 22 percent, to 41 cents after the close of New York Stock Exchange composite trading.
Syncora would have been ``unable to maintain'' compliance with a New York state insurance department target for a minimum $65 million policyholder surplus without approval of an accounting change. The company, one of five bond insurers to lose AAA credit ratings because of losses related to guarantees on U.S. mortgage securities, said the surplus would have fallen to $19.1 million without the revision.
``Syncora's senior management remains focused on the company's strategic plan to reach agreements with our financial counterparties,'' Acting Chief Executive Officer Susan Comparato said in the statement.
The company said in a separate statement that Chief Financial Officer Elizabeth Keys resigned to ``pursue another employment opportunity within the financial services industry.''
Syncora, which paid $500 million to Merrill Lynch & Co. to cancel $3.7 billion of default protection on collateralized debt obligations, remains in discussions with a group of additional banks over mortgage-related contracts, the statement said. The company didn't extend an Oct. 31 deadline for the negotiations, which had been pushed back from Oct. 15, the statement.
New York's insurance department allowed the insurer to release reserves related to canceled contracts, the statement said.
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