REG - Syncora Guarantee Severn Trent Utlties Yorkshire Wtr Fin Ld - Financial Statements as of March 31, 2021

Assured GuarantyAnnouncement

17/05/2021 08:05

RNS Number : 7520Y
  
Syncora Guarantee Inc.
  
17 May 2021
  
 




NEWS RELEASE


 


 www.syncoraguarantee.com




 
17 May 2021 


 


 




SYNCORA GUARANTEE INC.
 
LEI 5493005UM1WMYHSO3P68
 
STATUTORY BASIS FINANCIAL STATEMENTS AS OF MARCH 31, 2021
(the "March 2021 Financial Statements")



Syncora Guarantee Inc. ("Syncora Guarantee" or the "Company"), an insurance company domiciled in the State of New York, announced its results for the quarter ended March 31, 2021. The statutory financial statements of Syncora Guarantee comprise the statutory statements of admitted assets, liabilities and capital and surplus as of March 31, 2021, and the related statutory statements of operations and changes in capital and surplus, and of cash flows for the quarter then ended. 
Strategy
The March 2021 Financial Statements set out a "Description of Significant Risks and Uncertainties, and Description of Syncora Guarantee's On-Going Strategic Plan".  Such descriptions include but are not limited to the following -
Risks related to Sale of the Company and Strategy
On December 30, 2019, Syncora Holdings Ltd. ("Syncora Holdings") and its subsidiary, Syncora Holdings US Inc., sold their entire ownership interest in Syncora Guarantee to Syncora FinanceCo LLC., formerly known as Star Insurance Holdings LLC ("Syncora FinanceCo"), an entity organized by GoldenTree Asset Management LP ("GoldenTree") on behalf of GoldenTree's managed funds and accounts.  Upon sale, the Company retained certain of its employees in an effort to provide a smooth transition to its new ownership structure.  
Syncora Guarantee's parent, Syncora FinanceCo, is a holding company with no independent operations or assets and is dependent on dividends from Syncora Guarantee, if any, to fund its liquidity needs.  Syncora FinanceCo has advised Syncora Guarantee that it may request that Syncora Guarantee pay one or more dividends for this purpose in the future.  Syncora Guarantee's ability to pay any dividend would be subject to compliance with applicable legal and other requirements, including any required approval of the New York Department of Financial Services (the "NYDFS").
Furthermore, Syncora Guarantee continues to pursue certain key strategic initiatives in order to continue to deliver enhanced value to stakeholders. These initiatives include (i) actively and continuously focusing on reducing the Company's retained insured exposures (through their purchase on the open market or otherwise, commutation, defeasance, reinsurance or other restructuring) to minimize potential claim payments, maximize recoveries and mitigate potential losses, some of which may result in a material decrease in our retained exposure, if consummated, including one reinsurance transaction that was executed in January 2021, which further reduced the Company's  net par outstanding significantly,  (ii) seeking to realize the maximum value of its assets, and from any other rights and remedies the Company may have, (iii) seeking to novate or, itself or its affiliates, purchase with a view towards novating to Assured Guaranty Corp. ("Assured Guaranty"), the policies reinsured to Assured Guaranty that have not yet been novated to Assured Guaranty as of March 31, 2021(1), which novation may lead to a change in the credit ratings of the related securities, (iv) further reducing operating expenses and improving operational efficiencies, and (v) transitioning services to Assured Guaranty in respect of the reinsurance agreement and the administrative services agreement.
Any or all of these actions may be outside the ordinary course of the Company's operations or its control and may require consents, approvals or cooperation of third parties, including the NYDFS, and there can be no assurance that any such consents, approvals or cooperation will be obtained on a timely basis or at all.  In addition, while the parties in the reinsurance transaction agreed to use commercially reasonable efforts to cooperate on novations for three years after the closing date, such three-year period ends on June 1, 2021.
 
Notes:



(1)


On June 1, 2018, Syncora Guarantee closed the reinsurance transaction with Assured Guaranty pursuant to which Assured Guaranty agreed to provide reinsurance, general on a 100% quota share basis, to Syncora Guarantee of approximately $12.1 billion of net par outstanding of Syncora Guarantee insured financial guaranty insurance policies, representing approximately 92% of Syncora Guarantee's outstanding insured exposure as of June 30, 2018. 
See Notes 1 and 21 of the March 2021 Financial Statements for further discussion.  Reinsurance does not relieve a primary insurance company of its obligations under an insurance policy.  While Assured Guaranty has a contractual obligation to Syncora Guarantee pursuant to the reinsurance agreement and administrative services agreement to administer and pay claims on the financial guaranty insurance policy, Assured Guaranty has no direct obligations to any beneficiary or holder of the financial guaranty insurance policy. Accordingly, Assured Guaranty's financial strength ratings will not be conferred on such policy.













The March 2021 Financial Statements, certain other financial information of Syncora Guarantee, and a list of bonds that are listed on stock exchanges in the United Kingdom or European Economic Area in respect of which Syncora Guarantee has provided a primary or secondary financial guarantee or insurance policy and may apply its strategic initiatives, are available on Syncora Guarantee's website www.syncoraguarantee.com.
 
For further information, please contact:
 
Syncora Guarantee Inc.
Mary Jane Constant
+1.212.478.3456
Maryjane.constant@scafg.com
 
Important Information and Forward Looking Statements
This press release contains statements about future results, plans and events that may constitute "forward-looking" statements.  We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release.  In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "comfortable with," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology.  Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Syncora Guarantee's control. Readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date they are made. Syncora Guarantee does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made.
 

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