FGIC

Also found in: Acronyms.

Federal Guarantee Insurance Corporation

A private company providing financial guarantee insurance for different types of transactions. For example, an insurance policy may cover a lender from liability resulting from the failure of the borrower to repay the loan. The FGIC originally provided this insurance exclusively for municipal bonds, but expanded into different transactions, such as IPOs. Clients pay the FGIC the appropriate premium in exchange for a guarantee of repayment in case of default; this increases the bond's credit rating and, usually, decreases its interest rate. The services that the FGIC provides are similar to sureties or co-signed loans.

Financial Guaranty Insurance Corporation

A private company providing financial guarantee insurance for different types of transactions. For example, an insurance policy may cover a lender from liability resulting from the failure of the borrower to repay the loan. FGIC originally provided this insurance exclusively for municipal bonds, but expanded into different transactions such as IPOs. Clients pay FGIC the appropriate premium in exchange for a guarantee of repayment in case of default; this increases the bond's credit rating and usually decreases its interest rate. The services FGIC provides are similar to sureties or co-signed loans.

FGIC

See Financial Guaranty Insurance Corporation.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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Exhibit 2 SELECTED FINANCIAL INFORMATION FOR MAJOR MONOLINE BOND INSURERS (As of December 31, 2000) $ Millions AMBAC FGIC Net par exposure $276,252.0 $150,624.0 Net par written $65,303.0 $22,661.8 Total assets $4,473.4 $2,651.8 Statutory capital $2,735.9 $1,913.4 Net income $338.3 $168.6 Losses and loss-adjusted expense $8.6 ($0.3) Average premium rate 63b.p.

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Finally, companies like the Municipal Bond Insurance Association (MBIA), the Financial Guaranty Insurance Company (FGIC), and the American Municipal Bond Assurance Corporation (AMBAC) insure the bondholder against default.

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