Syncora Holdings Ltd., whose stock price has fallen more than 99.5% since hitting a high of $34.58 last year, officially began trading over the counter yesterday after the New York Stock Exchange suspended trading of its shares.
The NYSE sent a notice to the bond insurer last week saying it planned to delist the stock, which no longer met two of its standards for listing. Syncora's stock fell out of compliance with the NYSE's rules on maintaining an average market capitalization of $75 million or more over a 30-day trading period and a stockholders' equity of no less than $75 million, as well as maintaining an average closing price of $1 or higher over a consecutive 30-day trading period.
Syncora said last week it did not plan to appeal the decision. The company said the change will not impact its strategic plans or its negotiations with financial counterparties to commute billions in exposure.
Like most other bond insurers plagued by structured finance exposures, Syncora's stock price has plummeted over the past year. Its stock price fell to $0.17 yesterday, down from a high of $34.58 per share it hit last May.
Accordingly, Syncora's market capitalization has plunged to about $10 million. It stood at more than $2 billion at the end of second quarter of 2007.
Syncora's sinking stock price is not alone. The shares of nearly every bond insurer have been pounded amid their own troubles and the broader financial crisis.
Year to date, shares of Assured Guaranty Ltd. have fallen about 55%, shares of Ambac Financial Group Inc. have dropped about 95% and shares of MBIA Inc. have fallen about 70%. Combined, the market capitalization of the three have dropped an "astounding" $17.9 billion since the end of 2006, CreditSights analyst Rob Haines wrote in a recent report.
"In terms of equity performance, shareholder wealth has essentially evaporated," Haines wrote.
