FGIC reqesting to split in two
Fresh off of it's Moody's downgrade yesterday, FGIC is requesting that it split its businesses into two companies, one retaining munis, and the other getting left with the crap. As the news broke, Eric Dinallo, NY's insurance commissioner was appearing on CNBC. He confirmed FGIC's request, and noted that it's not a done deal, that a cash injection bailout was still possible...
Financial Guaranty Insurance Co., a major bond insurer, has notified the New York State Insurance Department that it will request to be split into two companies, according to a person familiar with the matter.
One of the firms would likely retain much of the business of insuring structured finance bonds such as those backed by mortgages, which have come under severe pressure due to the housing market slowdown, according to the person.
The other company would likely retain most of the municipal bond insurance business, which is stronger, the person said.
FGIC Will Request Break-Up - Wall Street Journal
