Syncora Holdings Ltd. (fka SYCRF)

[DennyCrane550]

Snowball


Syncora publishes its reserve and Puerto Rico Exposure.


//
Operating Supplements here - study Puerto Rico (Public Finance) Reserve + Exposure trends:
http://scafg.gcs-web.com/financial-information

Transcript found here... read thru them
http://scafg.gcs-web.com/investor-events/past-events

Stince at least Q2 2016 -- SYNCORA has among the highest if not THE highest reserve for any monoline:

===== Q2 2016 transcript


Thank you, Susan. Now for the questions I mentioned at the beginning of the
call starting with three from Andrew Gadlin of Odeon Capital. His first
question was, the company previously discussed reserve levels on PREPA.
Can you discuss reserves on GO’s? Claude?

Syncora Holdings Ltd. Q2 2016 GAAP Financial Results
Moderator: Michael Corbally
09-22-16/8:30 a.m. ET
Confirmation # 82582212
Page 10

Claude LeBlanc: Sure. As you know, for GAAP reserving purposes, we use a scenario
approach which includes the commonwealth’s offer to creditors back in April.
Based on our approach as of June 30,
the reserves for PREPA stood at
approximately $54 million or a loss given default of 26 percent.

And for GO’s, total reserve of $58 million or a loss given default of 25 percent.



==== Syncora has continued to commute/buyback bonds/reduce exposure to both PREPA + PR GOs



Puerto Rico Gross Par Outstanding Exposure (m$)

Q4 2016 Puerto Rico $ 339
Q3 2016 Puerto Rico $ 362
Q2 2016 Puerto Rico $ 387
Q1 2016 Puerto Rico $ 389
Q4 2015 Puerto Rico $ 396
Q3 2015 Puerto Rico $ 436


Puerto Rico Bond Purchases (m$)

Q4 2016 Puerto Rico $ 74.6
Q3 2016 Puerto Rico $ ^
Q2 2016 Puerto Rico $ ^
Q1 2016 Puerto Rico $ 53.2


just look at the Puerto Rico supplements --- watch how the Bonds trade (have friends that own the Syncora Wraps)


PREPA (~$200m exp of the above) Deal Framework already in place as of Friday Filings~

Syncora

agreed to take 0-5% hit on PREPA on $150m

agreed to take a 15% hit on ~$50m of the 2025-2027s Syncora agree to take the Full exchange which translates to 15% haircut on those 50m (ergo something like $7.5m to dole out the year 2025, not before... no big deal, we already have too much money set aside)

Now need to get thru the July 1st 2017 payments and roll + execute final agree but that is on teh way.



==== PR GOs ($150m or so in exposure.. rounding for simplicity)


Puerto Rico Oversight Board + Gov + Rothschild offered as disclosure this morning

70c bonds + 20c Growth bonds -- which translates into 10-20c haircut depending on present value + growth assumptions

regardless, GOs sit high in capital structure (G'teed by Constitution / of course Cofinas have security so that battle wages)... will be long and litigious... but EVEN if Syncora has to end up in the long run paying 30c they have already set aside 30% as of recent reserve JUST for GOs -and frankly will be releasing some PREPA in due time


super manageable... you can cry a river about Puerto Rico if you want.

By the time this shakes out... Exposure will be a lot lower and Syncora will not even take a meaningful loss, in many scenarios - will release a good guy back to the P&L