Security Capital Assurance Ltd Comments on Jefferson County
03 June 2008 - 9:30AM
PR Newswire (US)
SCA Subsidiary XL Capital Assurance Inc. Expects to Make $10.6
Million Payment HAMILTON, Bermuda, June 2 /PRNewswire-FirstCall/ --
Security Capital Assurance Ltd (NYSE:SCA) (the "Company" or "SCA")
commented today on the current financial crisis in Jefferson
County, Alabama ("the County"). XL Capital Assurance Inc. ("XLCA"),
SCA's primary financial guarantee insurance subsidiary, expects
that as part of an agreement entered into with the County, it will
make a $10.6 million claim payment pursuant to the terms of the
insurance policies it provides for the benefit of the holders of
Jefferson County's sewer warrants. The claim payment is expected to
be made on Tuesday, June 3, 2008. "XL Capital Assurance is
committed to honoring the terms of the financial guarantee it
provides to Jefferson County's bondholders," said Edward Hubbard,
SCA Executive Vice President and President of XLCA. "The payment we
are making supports the County's efforts to resolve its current
circumstances." XLCA insures payment of scheduled debt service on
the County's sewer warrants that are backed by a pledge of all the
County's net sewer revenues. The County is required under the
covenants of the indenture governing the warrants to set sewer
rates at a level sufficient to generate net sewer revenues that
will allow it to meet all of the County's sewer debts. The County
is required to reimburse XLCA in full for any payments made under
the policies. However, in conjunction with the payment, the County,
its bank creditors, and XLCA entered into an agreement whereby XLCA
will refrain from exercising its rights to receive reimbursement
from the County for the payment until July 31, 2008. Pursuant to
the agreement, the County is expected to continue to make good
faith efforts to resolve its current debt crisis, and XLCA's
agreement to refrain from exercising its rights is subject to,
among other things, the demonstration of good faith negotiations by
the County in this regard. "We understand that the County is
pursuing constructive solutions to its debt situation and, while
there can be no guarantee that the County will be able to reach a
successful resolution of the current situation, we look forward to
seeing additional progress made over the next 60 days," commented
Hubbard. As of June 2, 2008, the Company's exposure to Jefferson
County was $810 million, net of reinsurance. XLCA has not
established any loss reserves at this time in connection with
Jefferson County. About Security Capital Assurance Security Capital
Assurance Ltd is a Bermuda-domiciled holding company whose common
shares are listed on the New York Stock Exchange (NYSE:SCA). For
more information please visit http://www.scafg.com/ . Contact:
Investors Frank Constantinople +1 441-279-7450 Media Michael
Gormley +1 441-279-4750 Michele Loguidice +1 212-333-3810
FORWARD-LOOKING STATEMENTS This release contains statements about
future results, plans and events that may constitute
"forward-looking" statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
You are cautioned that these statements are not guarantees of
future results, plans or events and such statements involve risks
and uncertainties that may cause actual results to differ
materially from those set forth in these statements.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which are beyond the Company's control.
These factors include, but are not limited to: recent and future
rating agency statements and ratings actions; the outcome of the
Company's dispute with Merrill Lynch International concerning the
Company's termination of seven credit default swap ("CDS")
contracts; the Company's ability to successfully implement its
strategic plan; higher risk of loss in connection with obligations
guaranteed by the Company due to recent deterioration in the credit
markets stemming from the poor performance of subprime residential
mortgage loans; the suspension of writing substantially all new
business and the Company's ability to continue to operate its
business in its historic form; the development and implementation
of a strategic plan; developments in the world's financial and
capital markets that adversely affect the performance of the
Company's investments and its access to such markets; the
performance of invested assets, losses on credit derivatives or
changes in the fair value of credit derivatives; the availability
of capital and liquidity; the timing of claims payments and the
receipt of reinsurance recoverables; greater frequency or severity
of claims and loss activity including in excess of the Company's
loss reserves; changes in the Company's reinsurance agreements with
certain of its subsidiaries; the impact of provisions in business
arrangements and agreements triggered by the ratings downgrades;
the impact of other triggers in business arrangements including CDS
contracts; changes in regulation, tax laws, legislation or
accounting policies or practices; changes in officers; general
economic conditions; changes in the availability, cost or quality
of reinsurance or retrocessions; possible downgrade of the
Company's reinsurers; possible default by the counterparties to the
Company's reinsurance arrangements; the Company's ability to
compete; changes that may occur in Company operations and ownership
as the Company matures; and other additional factors, risks or
uncertainties described in Company filings with the SEC, including
in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2007, and also disclosed from time to time in
subsequent reports on Form 10-Q and Form 8-K. Readers are cautioned
not to place undue reliance on forward-looking statements, which
speak only as of the date they are made. The Company 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. DATASOURCE: Security Capital
Assurance Ltd; XL Capital Assurance Inc. CONTACT: Investors, Frank
Constantinople, Security Capital Assurance, +1-441-279-7450, ;
Media, Michael Gormley, Security Capital Assurance,
+1-441-279-4750, , or Michele Loguidice, The Brunswick Group,
+1-212-333-3810, , for Security Capital Assurance Web site:
http://www.scafg.com/
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