The fund purchasing residential mortgage-backed securities insured by Syncora Guarantee Inc. has once again extended the early consideration period in which it will offer sellers a premium for their assets, Syncora Holdings Ltd. announced last week.
Holders of Syncora-backed RMBS now have until 11:59 p.m. eastern time April 14 to receive a premium and 11:59 p.m. April 28 to meet the expiration date of the offer. The BCP Voyager Master Funds SPC Ltd., acting on behalf of and for the account of the Distressed Opportunities Master Segregated Portfolio, originally set deadlines of 5:00 p.m. March 24 for a premium and midnight April 7 for expiration.
Syncora has offered financing of up to $385 million to fund purchases with an aggregate notional value of $5.9 billion. If New York insurance regulators allow Syncora to de-recognize reserves for unpaid loss and loss adjustments expenses, the purchases could increase shareholders' surplus to $667.3 million, Syncora said.
The purchases are part of a broader plan Syncora is undertaking to reduce its structured finance exposures.
Syncora Holdings recently reported a net loss of $1.4 billion in 2008. It also warned Syncora Guarantee may have to suspend claims payments because of its $2.4 billion policyholders' deficit and anticipated near-term claims payments.
If Syncora suspended claims payments, Standard & Poor's would revise the counterparty and financial enhancement ratings to selective default and then remove the financial enhancement rating, the rating agency said earlier this month. Syncora's financial strength rating would remain at CC, "reflecting the potential of regulatory intervention following the nonpayment of a claim and the company's weak financial position," Standard & Poor's said.
Also last week, Syncora director Edward J. Muhl said he was resigning from the board, the company disclosed in a filing with the Securities and Exchange Commission. Muhl, a former top insurance regulator in New York and Maryland, had joined the board in November.