XL Completes SCA Bailout Plan

Bermuda-based XL Capital Ltd. announced that it has closed the transactions relating to Security Capital Assurance Ltd. and “certain counterparties to credit default swaps with SCA as well as its offerings of ordinary shares and equity security units.”

The plan involves an agreement with Merrill Lynch and the raising of additional capital to shore up the ailing bond insurer (See IJ web site: https://www.insurancejournal.com/news/international/2008/07/29/92274.htm and related articles).

XL’s CEO Michael S. McGavick commented: “The support for our capital raise has been tremendous. I believe its success is a clear endorsement of the XL franchise, of our re-focused strategy and commitment to our dual insurance and reinsurance platform, and a vote of confidence in our ability to compete and win business.

“With SCA behind us and with our enhanced commitment to risk management, XL will concentrate on doing what it does best, which is underwriting the risks of our customers. I would like to personally thank our investors, old and new, and our customers, brokers and employees for helping to make XL one of the leading underwriting organizations in the world.”

XL added that it had closed the necessary transactions “pursuant to the Master Commutation, Release and Restructuring Agreement dated July 28, 2008 (the “Master Agreement”) among XL and certain of its subsidiaries, Security Capital Assurance Ltd. (now known as Syncora Holdings Ltd.) and certain of its subsidiaries and certain counterparties to credit default swap agreements with SCA.

“The offerings of ordinary shares and equity security units resulted in total gross proceeds to the Company of approximately $2.875 billion (including the proceeds from the exercise of the underwriters’ over-allotment option in full). A portion of the proceeds of the offerings were utilized by XL in connection with funding the transactions contemplated by the Master Agreement.”

Source: XL Capital – www.xlcapital.com