The fund offering to buy residential mortgaged-backed securities insured by Syncora Guarantee Inc. said Monday that the deadline to tender securities has been extended again, to 11:59 p.m. Tuesday.
The purchases are part of Syncora's efforts to reduce structured finance exposures and meet minimum regulatory capital requirements. Last week it took a step toward remedying its nearly $2.4 billion policyholders' deficit when it announced it had executed an agreement with 25 financial counterparties to commute or restructure all the $56 billion of credit-default exposure.
BCP Voyager Master Funds SPC Ltd., acting on behalf of and for the account of the Distressed Opportunities Master Segregated Portfolio, will purchase the securities. Syncora will provide financing of up to $375 million.
Syncora needs an adequate number of securities to be tendered for its deals to close. Both the tendering and the credit-default swap deals are necessary to remedy its capital position.
An official for the New York Insurance Department said Friday that the swap deal represented "significant progress," and that regulators would review the results of the tender offer within a few days. A spokesman said Monday that the department was still evaluating the results.
The department issued an order April 10 that gave Syncora until May 29 to take "steps as may be necessary" to meet minimum surplus requirements. As part of the order, Syncora suspended claims last month. It failed to pay claims of $61.7 million on eight policies since the suspension, it said in a statutory filing.
Under the terms of the deal with its counterparties, Syncora created a drop-down insurer, Syncora Capital Assurance Inc., that will insure public finance and global infrastructure credits, as well as the $40 billion in existing CDS exposures, which have no loss reserves under statutory accounting principles. SCA would have a policyholders' surplus of $292 million if both deals were completed.
