Shares of Bermuda-based bond insurer Security Capital Assurance Ltd. plunged by 53 percent in trading yesterday after the company said it had hired Goldman Sachs and Rothschild Inc. to help map out options for the company's future.

The company announced yesterday that it expected to take a charge of $1.5 billion for the fourth quarter on sub-prime mortgage related obligations.

SCA also delayed filing its annual results with the US Securities and Exchange Commission and now expects to submit its report by March 17.

SCA fell 80 cents, or 53 percent, to 72 cents in New York Stock Exchange composite trading. The company has lost about 98 percent of its market value in the past year.

The shares of Bermuda business insurer XL Capital, which owns 46 percent of SCA, also suffered, falling 2.6 percent to close on $35.12, its lowest closing price in the last 12 months. Last year XL shares peaked in July at more than $85.

XL announced it would write down the fair value of the company's investment in SCA by $117 million to zero. The write-down follows an analysis of SCA's value following credit-rating downgrades since the beginning of the year, XL Capital said in a regulatory filing dated last Friday.

"Management believes this decline in value is other than temporary," according to the filing.

SCA, hobbled by the loss of its AAA credit ratings, is working with Goldman and Rothschild on "a comprehensive review of all strategic options available to the company," according to a statement yesterday.

Bond insurers have been scrambling to raise capital and reorganise following widespread downgrades of mortgage-linked securities the companies guaranteed amid the highest rates of US foreclosures and home-price declines. SCA said in January it wouldn't try to raise additional capital, citing market conditions.

Michael Gormley, a spokesman for SCA, didn't immediately return telephone calls seeking comment about the company's plans.

At the end of the third quarter, the company reported shareholders' equity — or assets minus liabilities — of $1.59 billion. The charge will shrink the company's equity to less than $100 million.

Banc of America Securities analyst Tamara Kravec wrote in a client report she expects SCA to go into "run-off", or stop writing new business and just manage its existing book of policies.

Goldman Sachs analyst James Fotheringham on Sunday said SCA's stock would be worthless with the company in run-off.

SCA expects $645 million in costs for its policies covering collateralised-debt obligations, or bundles of bonds backed by assets like mortgages. The company expects $44 million in costs for insuring home-equity mortgage debt.

Fitch Ratings cut Security Capital's XL Capital Assurance and XL Financial Assurance ratings five levels to A on January 24. Moody's Investors Service followed on February 7, cutting the rating to A3, and Standard & Poor's reduced its rating on February 25 to A-.