FGIC Eyeing Strategic Options

FGIC Corp., the New York-based parent of Financial Guaranty Insurance Co., is in negotiations with potential investors about "strategic alternatives" for the troubled financial guaranty unit. The company disclosed that raising capital for a new triple-A rated insurer dedicated exclusively to the global public finance business is one of the options being explored. The new company would also assume FGIC's public finance and international infrastructure business. The PMI Group, Walnut Creek, Calif., owns 42% of FGIC. "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," an FGIC spokesman said in a statement. "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's statement also said the alternatives are consistent with the goals of New York state insurance regulators in regard to the company and its policyholders.