Financial Guaranty Insurance Company (FGIC) is an American
monoline Bond insurance, also known as "financial guaranty insurance", is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond (finance), bond or other security in the event of a payment default b ...
bond insurer established in 1983. It faced significant financial difficulties in 2008 which affected its ability to write new business.
The firm was acquired in December 2003 by a consortium of investors including
PMI Group
The PMI Group is a holding company whose primary subsidiary is the PMI Mortgage Insurance Co. (PMI). The company was founded in 1972 by Preston Martin and is headquartered in Walnut Creek, California
Walnut Creek is a city in Contra Costa Co ...
,
The Blackstone Group
Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate bu ...
,
The Cypress Group
The Cypress Group is a private equity company focused on leveraged buyout investments in companies across a range of industry sectors. At its peak in the late 1990s and early 2000s, Cypress was among the largest US private equity firms, although ...
and
CIVC Partners
CIVC Partners, previously known as Continental Illinois Venture Corporation, is a Chicago-based private equity firm that presently has over $1.8 billion of equity capital under management. The firm's predecessor was established in 1970 as a subs ...
.
As of March 24, 2009, it was rated "CC" by
Standard & Poor's
S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an American credit rating agency (CRA) and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities. S&P is con ...
(S&P) and "Caa3" by
Moody's
Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides international ...
Investors Service.
Fitch Ratings
Fitch Ratings Inc. is an American credit rating agency and is one of the " Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations (NRSRO) ...
had already withdrawn its rating, while Moody's announced it would remove its rating. The ratings are negative from both Moody's and Standard & Poor's.
On November 24, 2009, it was released that the
New York Insurance Department
The New York State Insurance Department (NYSID) was the state agency responsible for supervising and regulating all insurance business in New York State.
City of Detroit
Detroit ( , ; , ) is the largest city in the U.S. state of Michigan. It is also the largest U.S. city on the United States–Canada border, and the seat of government of Wayne County. The City of Detroit had a population of 639,111 at th ...
or court involvement had solicited bids for the Detroit Institute of Arts collection. The city had previously hired Christie's to estimate the value and worked out a plan with philanthropic groups in Michigan to preserve one of the nation's best art collections.
Six months later, on October 16, lawyers for FGIC and Detroit disclosed in court that they had reached a settlement of FGIC's claims against the city. Under the deal, which must still be approved by
the court
A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance w ...
along with other issues in the
Detroit bankruptcy
The city of Detroit, Michigan, filed for Chapter 9 bankruptcy on July 18, 2013. It is the largest municipal bankruptcy filing in U.S. history by debt, estimated at $18–20 billion, exceeding Jefferson County, Alabama's $4-billion filing in 201 ...
, the city and the state of Michigan would pay for the demolition of
Joe Louis Arena
Joe Louis Arena was an arena in Downtown Detroit. Completed in 1979 at a cost of US$57 million as a replacement for Olympia Stadium, it sat adjacent to TCF Center, Cobo Center on the bank of the Detroit River and was accessible by the Joe Lou ...
, currently home to the
Detroit Red Wings
The Detroit Red Wings (colloquially referred to as the Wings) are a professional ice hockey team based in Detroit. The Red Wings compete in the National Hockey League (NHL) as a member of the Atlantic Division (NHL), Atlantic Division in the East ...
of the
NHL
The National Hockey League (NHL; french: Ligue nationale de hockey—LNH, ) is a professional ice hockey league in North America comprising 32 teams—25 in the United States and 7 in Canada. It is considered to be the top ranked professional ...
. The arena site is planned to be available for transfer in 2017 when the Red Wings move into
Little Caesars Arena
Little Caesars Arena is a multi-purpose arena in Midtown Detroit. Opened on September 5, 2017, the arena, which cost $862.9 million to construct, replaced Joe Louis Arena and The Palace of Auburn Hills as the home of the Detroit Red Wings of th ...
. FGIC would then receive the arena site and an adjacent parking lot, giving the company nearly 9 acres (3.6 ha) that it would then redevelop.