A major bond insurer, FGIC Corp, didn’t manage to raise enough capital to compensate for losses on subprime mortgage guarantees. It led to its loss of Aaa insurance rating at Moody's Investors Service. The losses are estimated at about $2 billion.
FGIC Corp has fixed on the top of rating list since at least 1991 overrunning its larger competitors MBIA Inc. and Ambac Financial Group Inc. The position was shattered by Fitch Ratings last month.
The possible reason is the company’s exposure to the U.S. residential mortgage market that weakened capitalization and business profile.