Financial Guaranty Insurance parent gets proposals for strategic transactions from potential investors

By Angela McDaniels

Tacoma, Wash., May 5 - FGIC Corp. said it has received a significant number of indications of interest from a range of strategic partners, reinsurers and private equity providers.

The indications of interest were received in response to FGIC's request for proposals to enhance its capital position and protect its policyholders, according to a company news release.

On April 14, FGIC said it was exploring strategic alternatives, including 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.

On Monday, the company said it will discuss the proposals with the potential investors over the next several weeks while they complete their due diligence. Definitive proposals are expected to be submitted at the end of this period.

"We are encouraged to see the high degree of interest that has been expressed in FGIC," an FGIC spokesman said in the release. "We plan to work expeditiously to finalize a transaction that is in the best interests of all of our constituents, including our policyholders."

The company will continue to work closely with the New York Insurance Department and superintendent Eric Dinallo throughout this process, the release stated.

FGIC is a New York-based insurance holding company whose subsidiary, Financial Guaranty Insurance Co., provides credit enhancement on infrastructure finance and structured finance securities.

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