Bloomberg News

Syncora Ends Fitch Contract After Rating Cut to CCC (Update1)

September 03, 2008

Syncora Holdings, a bond insurer downgraded to CCC by Fitch Ratings, said it canceled contracts to be graded by the credit rating company.

Ratings on Syncora's bond insurance and reinsurance units were terminated in August and the holding company's ranking was discontinued on Sept. 2, Syncora said in a regulatory filing (SCA:US) today.

``Since the company has ceased writing substantially all new business, management believes ratings from two rating agencies, Moody's Investors Services Inc. and Standard and Poor's Ratings Services, are sufficient,'' according to the filing.

Five of seven formerly AAA rated bond insurers lost all their top ratings this year after straying from the business of backing the debts of cities and states into guaranteeing securities backed by subprime mortgages. Since stripping the companies of top ratings, which backed more than $2 trillion of debt, the credit rating companies have been unable to agree on how to rank the insurers.

Fitch rates Syncora CCC or two grades above its lowest rating. Moody's assigns a rating of B2, three grades higher, while Standard & Poor's ranks Syncora at BBB- or eight grades above Fitch.

Syncora becomes the fourth bond insurer to this year to reject Fitch's ratings. The credit rating company withdrew its ratings on MBIA Inc. (MBI:US) and Ambac Financial Group Inc. (ABKFQ:US), the two largest bond insurers, in June after the companies stopped providing non-public information to the credit-rating company. CIFG Holdings Ltd. requested the rating on its bond insurance unit be withdrawn in March, though Fitch continues to assign CIFG Assurance North America a grade of CCC.

To contact the reporter on this story: Christine Richard in New York at crichard5@bloomberg.net

To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net


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