SCA Stellus Capital Investment Corporation

NEW YORK, Sept. 16 /PRNewswire-FirstCall/ -- Syncora Guarantee Inc., a wholly owned subsidiary of Syncora Holdings Ltd. (NYSE:SCA); Financial Guaranty Insurance Company (collectively the "Bond Insurers"); and The Bank of New York Mellon, as Trustee for $3.2 billion of Jefferson County Sewer Revenue Warrants acting at the direction of the Bond Insurers, today filed suit against Jefferson County Alabama (the "County") and the County's Commissioners. The Bond Insurers insure approximately $2.8 billion in Jefferson County Sewer Revenue Warrants. The suit, which was filed in the United States District Court for the Northern District of Alabama, includes a request to the Court to appoint an independent and qualified receiver to: manage the Jefferson County Sewer System; consider and implement any appropriate rate modifications and other sources of revenue; ensure compliance with applicable laws; assist in achieving an appropriate financial resolution; and pursue any bona fide claims. "After many months of efforts by the Bond Insurers, other creditors and interested parties to work with Jefferson County to resolve this financial crisis, we are disappointed to have to take this action," commented Edward Hubbard, President of Syncora Guarantee Inc. "However, the County Commission's failure to meet its obligations has left us with no other alternative. We are hopeful that the appointment of an independent party will provide a solution that fairly accommodates the needs of the County, its citizens and its creditors." "Despite the current state of affairs, we believe the County still has an opportunity available to move forward and achieve a mutually satisfactory outcome for all parties. If the County is willing to take this path, we look forward to working together in a constructive manner," said Hubbard. About Syncora Guarantee Inc. Syncora Guarantee Inc. is a wholly owned subsidiary of Syncora Holdings Ltd. About Financial Guaranty Insurance Company Financial Guaranty Insurance Company is a wholly owned subsidiary of FGIC Corporation. Media and Investors Contact: Michael Gormley Syncora Guarantee Inc. +1 212-478-3463 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 Syncora's control. These factors include, but are not limited to: higher risk of loss in connection with obligations guaranteed by Syncora due to deterioration in the credit markets stemming from the poor performance of subprime residential mortgage loans; the outcome of our negotiations with the Financial Counterparties concerning the commutation, termination, amendment or otherwise restructuring of their credit default swap contracts; the decision by our regulators to take regulatory action with respect to Syncora Holdings' operating subsidiaries at any time; the availability of capital and liquidity; our assumptions concerning the tax treatment of the transactions contemplated by the Agreements and related transactions; the outcome of the efforts to refund Jefferson County, Alabama's outstanding sewer system debt; the performance of invested assets, losses on credit derivatives or changes in the fair value of credit derivatives; recent and future rating agency statements and ratings actions; the suspension of writing substantially all new business and Syncora's ability to continue to operate its business in its historic form; the outcome of litigation; the timing of claims payments and the receipt of reinsurance recoverables; greater frequency or severity of claims and loss activity including in excess of Syncora's loss reserves; the impact of provisions in business arrangements and agreements triggered by the ratings downgrades; the impact of other triggers in business arrangements including credit default swap contracts; developments in the world's financial and capital markets that adversely affect the performance of Syncora's investments and its access to such markets; changes in regulation, tax laws, legislation or accounting policies or practices; changes in officers and key employees; general economic conditions; changes in the availability, cost or quality of reinsurance or retrocessions; possible downgrade of Syncora's reinsurers; possible default by the counterparties to Syncora's reinsurance arrangements; Syncora's ability to compete; changes that may occur in Company operations and ownership as Syncora matures; and other additional factors, risks or uncertainties described in Company filings with the Securities and Exchange Commission, including in Syncora'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. Syncora 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: Syncora Guarantee Inc.; Financial Guaranty Insurance Company CONTACT: Michael Gormley, Syncora Guarantee, +1-212-478-3463, Web site: http://www.scafg.com/

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