Moody's drops FGIC

Moody's Investors Service said it downgraded to Baa3 from A3 the insurance financial strength ratings of the operating subsidiaries of FGIC Corp., including Financial Guaranty Insurance Co. and FGIC UK Ltd.

Moody's said it has also downgraded the senior debt rating of the holding company, FGIC Corp., to B3 from Ba1 and the contingent capital securities ratings of Grand Central Capital Trusts I - IV to B2 from Baa3.

These rating actions reflect the company's inability to date to raise new capital, the increased likelihood of FGIC breaching minimum regulatory capital requirements and the effects of its current inability to upstream dividends without prior regulatory approval, the agency noted.

The ratings remain under review for possible downgrade, Moody's added.

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