Capmark Financial Group, Horsham, Pa., has a preliminary pre-tax loss of $800 million in the fourth quarter of 2008.

The company said it is still reviewing certain accounts, including deferred tax assets, intangibles and certain investment securities for recoverability or impairment.

Depending upon the outcome of this review, the fourth quarter net loss could be higher than the pre-tax loss mentioned above, which could cause its leverage ratio to exceed the maximum level permitted which, absent an amendment or waiver, would constitute an event of default.

Capmark has already borrowed substantially all of the amounts available under its revolving credit facility; as of Feb. 24 it has $1.4 billion on hand to fund its operations. The commercial real estate company has commenced discussions with the lenders under its senior credit facility, and has hired Lazard Frères & Co. as its financial adviser.

Capmark is withdrawing its application with the Federal Reserve Board to become a bank holding company after evaluating the financial and other requirements for becoming a bank holding company. Fitch Ratings, New York, cut Capmark's long-term issuer default rating to 'B-' from 'BBB-' in reaction to the statement.

"If these additional impairments are required, these could put the company in violation of its leverage covenant in the company's bank credit facility. Fitch is concerned that should this occur, and the company does not successfully obtain a waiver or amendment, Capmark's auditors may not give the company a 'going concern' opinion," the rating agency said.

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