XL is fighting to come back

As XL Capital stock plunged to its lowest share price in more than a decade earlier this week the stock had a small rebound when it closed yesterday at $20.43 on the New York Stock Exchange. The increase is an 11 per cent rise. Helping to drive the stock down earlier this week was the S&P and Fitch agencies giving the company a negative outlook.

XL Capital has been struggling trying to handle its problems related to its bond insurer Security Capital Assurance, or SCA. Speaking to The Royal Gazette, Neal Enriquez who is the senior financial analyst covering SCA for XL said that “If they can put the SCA issue to rest and I think it’s reasonable to expect that they will be able to do that then they could come back stronger.” When asked about a timeframe for the rebound of XL Enriquez said “It depends on how aggressive the company is in dealing with it. It could take a conservative approach and negotiate further, or it could take a full charge now.”

Michael McGavick who took over as the Chief Executive Officer for XL in May has said it is his number one issue to resolve the problems they are faced with in regard to SCA.

Bermuda based SCA is being impacted by the securities that they insure which are back by the value of mortgages which are plummeting in the midst of the credit and sup prime crisis. XL was forced last year to declare a loss of over a billion dollars due to market conditions.