NEW YORK (Bloomberg) - XL Capital shares rose the most in six years after a Citigroup analyst said concern about a bond insurance affiliate's solvency is overblown.

XL jumped $4.51, or 8.9 percent, to $55.44 in New York Stock Exchange composite trading. The company lost about a third of its value in two months on concern it might have to bail out Security Capital Assurance.

SCA is a former wholly owned subsidiary in which XL still holds a 46 percent stake. SCA climbed 26 percent to $6.69, the biggest one-day gain since it was split off from XL two years ago.

SCA and rivals including MBIA and Ambac Financial Group are seeking to ward off credit-rating downgrades by Moody's Investors Service, Fitch Ratings and Standard & Poor's. Lower ratings in turn would cast doubt on $2.4 trillion of debt that the companies guarantee. A failure by SCA might leave XL on the hook for $78.4 billion, Citigroup's report said.

"Even if SCA's solvency is challenged, the timely payment of principal and interest would continue," said Citigroup analyst Joshua Shanker in a note to investors. He said it would be "a long time" before XL might be liable for any SCA losses.

Mr. Shanker rates XL shares "Buy/High Risk." He does not cover SCA.

"That $78 billion steamroller still looms," he wrote. "Still, every day it gets smaller, and, if SCA runs out of its claims-paying abilities, perhaps three to five years down the line, the $78 billion will likely be a fraction of its current size."