Syncora Guarantee Inc.'s ratings are under threat of being revised to selective default (SD) by Standard & Poor's Ratings Services if the bond insurer fails to honour a claim on its insured obligations.

S&P said the insurer's counterparty credit rating and financial enhancement rating would be changed to SD, with the financial enhancement rating then being withdrawn if it suspended claim payments, as per the company's 10-K disclosure on December 31, 2008.

But the ratings agency said that the company's financial strength rating would remain at 'CC', reflecting the potential of regulatory intervention following the non-payment of a claim and the company's weak financial position.