FGIC loses AAA at Moody's; Cerebus GMAC LBO Stress
Moody's Cuts Guarantor AAA Rating...
FGIC., the #4 bond insurer owned by Blackstone Group LP and PMI Group Inc., lost its Aaa insurance rating at Moody's Investors Service
FGIC's insurance units were cut six levels to A3 and may be reduced again. FGIC failed to raise enough capital to compensate for losses
and is about $4 billion short of the amount of capital needed to justify a Aaa ranking.
And well he should... Stephen Feinberg, founder of Cerebus, re: GMAC, the auto and mortgage lender, controlled by Cerberus Capital Management:
"We have detailed contingency plans in a continuing worsening environment. However, if the credit markets continue to decline
and we find ourselves in a prolonged environment of capital market shutdown, GMAC could run into substantial difficulty.
It is in the case of an extraordinary automotive collapse or an unusually deep recession that we worry."
Cerberus, led a group of investors in an LBO that bought a 51% stake in GMAC from GM in 2006 for $7.4 billion.
FGIC., the #4 bond insurer owned by Blackstone Group LP and PMI Group Inc., lost its Aaa insurance rating at Moody's Investors Service
FGIC's insurance units were cut six levels to A3 and may be reduced again. FGIC failed to raise enough capital to compensate for losses
and is about $4 billion short of the amount of capital needed to justify a Aaa ranking.
And well he should... Stephen Feinberg, founder of Cerebus, re: GMAC, the auto and mortgage lender, controlled by Cerberus Capital Management:
"We have detailed contingency plans in a continuing worsening environment. However, if the credit markets continue to decline
and we find ourselves in a prolonged environment of capital market shutdown, GMAC could run into substantial difficulty.
It is in the case of an extraordinary automotive collapse or an unusually deep recession that we worry."
Cerberus, led a group of investors in an LBO that bought a 51% stake in GMAC from GM in 2006 for $7.4 billion.
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