FGIC begins talks with investors about strategic alternatives

By Susanna Moon

Chicago, April 14 - FGIC Corp. said it has begun discussions with potential investors and other parties regarding strategic alternatives that would enhance its capital position and protect its policyholders.

The company said it is optimistic that within the coming weeks it would have a course of action to propose to its board of directors. As previously reported, FGIC retained Goldman Sachs to assist in these efforts.

FGIC said that strategic alternatives being explored include raising capital for a newly established triple-A guarantor dedicated exclusively to the global public finance business. This company would also assume FGIC's existing public finance and international infrastructure business.

"With a high-quality and diversified portfolio, coupled with a focused business strategy, the new company would have a unique platform to deliver superior value to its clients and investors in the securities it insures," a FGIC spokesman said in a press release. "Other alternatives include, but are not limited to, the sale of all or part of the company, and a bulk reinsurance transaction on all or parts of FGIC's in-force business to a third party."

FGIC said it believes that its strategic alternatives are consistent with the goals of the New York Insurance Department with regard to the company and its policyholders. The company said it continues to work closely with superintendent Eric Dinallo and the insurance department as it progresses with negotiations.

FGIC is an insurance holding company and the parent company of Financial Guaranty Insurance Co., a New York-based company that provides credit enhancement on public finance, structured finance and global infrastructure and utility securities.

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