S&P puts FGIC on watch

Standard & Poor's said it placed the ratings of Financial Guaranty Insurance Co. (FGIC) and its parent company, FGIC Corp., on CreditWatch with negative implications, including the BB financial strength rating. The ratings previously had a negative outlook.

The agency said the CreditWatch addresses its concern regarding the magnitude of projected RMBS and related CDO losses when compared with claims-paying resources. Furthermore, restructuring scenarios under consideration raise the concern that the surviving corporate entity, FGIC, and the remaining policyholders may be disadvantaged compared with other classes of policyholders - in particular, municipal policyholders.

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