Blackstone facing FGIC write-down
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Blackstone Group may write down its stake in bond insurer FGIC Corp. after the collapse of the sub-prime mortgage market, President Hamilton E. James said Thursday.
The AAA credit rating of the company’s Financial Guaranty Insurance Co. unit is under review by ratings companies after a slump in the value of the mortgage securities it insures.
“We have some realizations in the pipeline but also some write-downs we are facing such as FGIC,” James said during a conference call to discuss the purchase of hedge fund firm GSO Capital Partners for $930 million. James didn’t elaborate on the possible losses.
New York-based Blackstone bought Financial Guaranty with PMI Group Inc. and Cypress Group from General Electric Co. for $1.9 billion in 2003. Brian Moore, a spokesman for FGIC, did not immediately respond to a message seeking a comment.
Blackstone rose $1.74, or 9.6%, to $19.84. The stock has dropped 36% since the company went public in June.
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