Author Topic: SYCRF (OTC) - Syncora Holdings  (Read 2960 times)

Capitalist World

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SYCRF (OTC) - Syncora Holdings
« on: December 17, 2016, 04:33:00 PM »
Nice to see some discussion on Syncora Holdings so I thought I would start it as a new Investment Idea as well.

For value hunters watch the earnings release on Dec 20th to see the unveiling of the new Syncora:  New directors, new direction, post refinancing of some Notes, Book value around $6.25 or higher, the last eight years they have been in rehab and runoff after the 2008 blow up (al la "the Big Short)  Similar to the story behind AGO, MBI, AMBC

A lot of  great work by Susan Comparato and  CFO Claude LeBlanc as CFO (who just recently moved to CEO rile at Ambac after a masterful job at Syncora).  Syncora will begin a new life with more disclosure, regular financials and conf calls.  Whole slew of possible catalysts for 2017 including:
Possible uplisting;
More transparency;
Regular conference calls;
Continued litigation settlements from Lehman, Greenpoint, Macquaire;
Continued loss mitigation and commutations, (PR and Reliance Rail);
Planned use of NOL's at holding co level and op level;
More disclosure on value of American Roads sub and possible move into infrastructure space,
New business lines and possible divestitures of assets

Target price for 2017 is $3.75 or approx. 50% of Book Value  Upside 150% from aver of last 30 days price
« Last Edit: December 21, 2016, 03:18:46 PM by Parsad »


wachtwoord

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Re: Syncora Holdings SYCRF (OTC)
« Reply #1 on: December 18, 2016, 06:04:52 AM »
What do they own? Any short summary what kind of company this is? They're share price history shows they completely collapsed after 2007.
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Capitalist World

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Re: Syncora Holdings SYCRF (OTC)
« Reply #2 on: December 18, 2016, 07:53:37 AM »
Syncora Holdings Ltd. through its subsidiary, Syncora Guarantee  Inc., a monoline financial guarantee insurance provider, provides credit enhancement for the obligations of debt issuers worldwide.

They are similar to, but smaller than, Assured Guaranty, MBIA and Ambac.  They are currently in runoff after the financial crisis on 2008 and have been rehabilitating their business through commutations, lawsuits, negotiations and runoff.  They have Shareholder Equity of $550M against 86.6 million shares outstanding (June 30th 2016). Most of the restructuring has been done with the exception of a few large potential liabilities in Puerto Rico, Reliance Rail and others but they have almost closed the 2019 large funding gap and I expect it to fully closed in 2017 with further commutations and large litigation settlements or court cases.  A rising interest rate environment is beneficial to their $1.4B bond portfolio.

see www.syncora.com


lemsinge

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Re: SYCRF (OTC) - Syncora Holdings
« Reply #3 on: January 02, 2018, 12:53:25 PM »
Is anyone still following this? It has been on and off my radar for a few months now. Every time I look at it I just throw it in the too hard pile. I would think that it would be up more today after this news:

1) Litigation resolution for $335mm on a company with a market cap of $290mm
https://www.bloomberg.com/press-releases/2018-01-02/syncora-guarantee-announces-resolution-of-greenpoint-litigation

2) Merger of runoff account into SGI
https://www.bloomberg.com/press-releases/2018-01-02/syncora-announces-the-merger-of-scai-with-and-into-sgi

Is it possible they will begin writing new muni insurance sooner rather than later?

mrholty

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Re: SYCRF (OTC) - Syncora Holdings
« Reply #4 on: January 02, 2018, 08:04:32 PM »
I have owned them for a while.  They cannot write new business until NY State regulators will allow them to.  My assumption is that they never will.

If anyone is interested in them I would recommend that they go and listen to their last conference call.  They were very open and forthcoming of what the next 3-6-9 months would hold.  The Greenpoint litigation was discussed but a timeframe was not given.

1.  Reliance Rail (Australia) has been completed.
2.  The consolidation of entities should allow them to make payments to preferreds. 
3.  Expectation that they will sell their American Roads division (on the books for $125M IIRC).  Have seen estimates that it will go for $150-$250M. 
4.  Use of NOLs.  Several Billion of NOLs which I cannot see them being able to used.  I expect them to sell out in 18-24 months if not for the NOL's alone.

Foreign Tuffett

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Re: SYCRF (OTC) - Syncora Holdings
« Reply #5 on: January 03, 2018, 07:43:15 AM »
I have owned them for a while.  They cannot write new business until NY State regulators will allow them to.  My assumption is that they never will.

If anyone is interested in them I would recommend that they go and listen to their last conference call.  They were very open and forthcoming of what the next 3-6-9 months would hold.  The Greenpoint litigation was discussed but a timeframe was not given.

1.  Reliance Rail (Australia) has been completed.
2.  The consolidation of entities should allow them to make payments to preferreds. 
3.  Expectation that they will sell their American Roads division (on the books for $125M IIRC).  Have seen estimates that it will go for $150-$250M. 
4.  Use of NOLs.  Several Billion of NOLs which I cannot see them being able to used.  I expect them to sell out in 18-24 months if not for the NOL's alone.

Care to share how you are valuing this?

Adjusted book value on 9/30 was $3.98. Holding everything else constant, the settlement should take it north of $6.00 ($6.24 is the exact # I'm getting). Obviously this thing shouldn't trade near book value as it's effectively in a slow liquidation, but it looks cheap trading near 50% of adjusted book.

mrholty

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Re: SYCRF (OTC) - Syncora Holdings
« Reply #6 on: January 03, 2018, 09:38:32 AM »
I have owned them for a while.  They cannot write new business until NY State regulators will allow them to.  My assumption is that they never will.

If anyone is interested in them I would recommend that they go and listen to their last conference call.  They were very open and forthcoming of what the next 3-6-9 months would hold.  The Greenpoint litigation was discussed but a timeframe was not given.

1.  Reliance Rail (Australia) has been completed.
2.  The consolidation of entities should allow them to make payments to preferreds. 
3.  Expectation that they will sell their American Roads division (on the books for $125M IIRC).  Have seen estimates that it will go for $150-$250M. 
4.  Use of NOLs.  Several Billion of NOLs which I cannot see them being able to used.  I expect them to sell out in 18-24 months if not for the NOL's alone.

Care to share how you are valuing this?

Adjusted book value on 9/30 was $3.98. Holding everything else constant, the settlement should take it north of $6.00 ($6.24 is the exact # I'm getting). Obviously this thing shouldn't trade near book value as it's effectively in a slow liquidation, but it looks cheap trading near 50% of adjusted book.

Edited:
I am fine with it selling at 50% of book as that is what MBIA and Ambac were trading at last I looked (summer).  I think they actually should be trading higher as they do not have a bad book within like those two which is the point of the haircut but that is a different argument for a different time.  I expect the business to be sold for .8-1.0 book within 2 years.  To do so they need to clean up their books.

Greenpoint - I had estimated it at $285M (100% of amount owed).  This was considerably more.  Yeah! 

American Roads - I estimate they will $350M (I've seen estimates of $400-$500M) - Last number I have is the business did $27M in revenue in a year.  On the books at $145M - Gain of $205M to book value ($2.40/share)
Maquarie lawsuit (related to American Roads) - Value $0-$200M - I used to think this would be a few years out as I assume they would want to have this done before selling American Roads.  They are fairly far down the process to sell American Roads. (They originally took a $250M loss on this)

Detroit waterfront land- I used to be more bullish - I'll say its worth $40M ($0.50/share)

Reliance Rail refinance complete + merger of SGAI will lead to them removing a liquidity mismatch in their language.  They have spoken about setting up Reinsurance which I think is a positive for if/when they sell their book.

Add in that they have steadily reduced their exposure to Puerto Rico ($110M not reserved last Q @ 100% loss)

Add it all up and I see lots of upside $7.50-$10.00 in book value and an eventual sale in the next 2 years.
« Last Edit: January 03, 2018, 10:35:48 AM by mrholty »

lathinker

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Re: SYCRF (OTC) - Syncora Holdings
« Reply #7 on: April 18, 2018, 12:55:00 PM »
I recently initiated a position.

They reported adjusted book value of 7 USD/share as of 31/12/2017. Also, they agreed a reinsurance transaction with AGO, bringing their remaining exposure to just about 1 bn USD (which  includes Puerto Rico). For the risk transfer, they will pay 336 mm USD. While this transaction will reduce their ABV per share (I would expect to 4-5 USD), the portfolio is now largely derisked and for me, there should be more upside than downside left. Also, they can continue winding up  the company. Next step is a large payment of 400 mm USD to the holders of surplus notes. They also noted that they are looking to realese some value to equityholders (I would expect to start with the preferreds).



doughishere

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Re: SYCRF (OTC) - Syncora Holdings
« Reply #8 on: April 19, 2018, 07:09:26 AM »
I recently initiated a position.

They reported adjusted book value of 7 USD/share as of 31/12/2017. Also, they agreed a reinsurance transaction with AGO, bringing their remaining exposure to just about 1 bn USD (which  includes Puerto Rico). For the risk transfer, they will pay 336 mm USD. While this transaction will reduce their ABV per share (I would expect to 4-5 USD), the portfolio is now largely derisked and for me, there should be more upside than downside left. Also, they can continue winding up  the company. Next step is a large payment of 400 mm USD to the holders of surplus notes. They also noted that they are looking to realese some value to equityholders (I would expect to start with the preferreds).

one of my largest positions...has been for some time. welcome to the klub.