On July 29, XL Capital ("XL") announced plans to raise $2.5 billion through an offering of ordinary shares and equity security units, the proceeds of which were to be used to recapitalize Syncora Holdings, Ltd. (formerly known as Security Capital Assurance) ("Syncora"), a bond insurance company that XL spun off in 2006.
As part of the agreement, XL agreed to pay $1.78 billion to Syncora to end all agreements between the parties. In addition, XL agreed to give eight million ordinary shares to Syncora subsidiaries. Further, Syncora’s litigation with Merrill Lynch regarding a series of credit derivatives it sold to Merrill Lynch was to be terminated.
On August 6, the New York State Insurance Department (the "Department") announced (http://www.ins.state.ny.us/press/2008/p0808061.htm) that the agreements between XL and Syncora, and Merrill Lynch and Syncora, had closed successfully. In announcing the closing, the Department stated that it “will continue to support and facilitate these and other efforts to enhance the financial condition of stressed bond insurers.”