Financial Security Assurance
{{Infobox company
| name = Financial Security Assurance
| logo =
| logo_caption =
| logo_alt =
| type = Public company
| industry = Insurance
| founded =
| founder =
| defunct = {{End date|2009}}
| fate = Acquired
| successor = Assured Guaranty Corporation
| hq_location_city = New York City
| hq_location_country = United States
| area_served = United States
| key_people =
| products = Monoline insurance
| owner = Dexia
| num_employees =
| num_employees_year =
| parent =
| website = {{URL|http://www.fsa.com/}}
}}
Financial Security Assurance (FSA) was an American financial guaranty (or monoline) insurance company. FSA was bought in 2000 for EUR€2.7 billion by the Franco-Belgian bank Dexia.{{cite web|url=http://www.edubourse.com/finance/actualites.php?actu=2798 |title=Dexia ache FSA (Press Release) |date=14 March 2000 |work=edubourse.com}} In 2007, before the 2008 financial crisis, FSA was ranked number four among global monoline credit insurers.{{cite news |last1= Pellecuer |first1=David |url=http://www.lefigaro.fr/societes/2008/09/29/04015-20080929ARTFIG00523-dexia-victime-de-la-speculation-.php |date=29 September 2008 |title=Dexia, nouvelle victime de la crise bancaire |newspaper=Le Figaro }} In 2009, it was acquired by Assured Guaranty Corporation.
FSA insured primarily municipal bonds, asset-backed securities, and mortgage-backed securities. Before insuring a municipal bond, monolines would request a pledge of local tax revenues or revenues from essential public services such as municipal water charges.
History
=The subprime mortgage crisis=
On 4 February 2008, Dexia announced that it was investing $500 million (~${{Format price|{{Inflation|index=US-GDP|value=500000000|start_year=2008}}}} in {{Inflation/year|US-GDP}}) in FSA to "take advantage" of "increasing opportunities that have recently emerged" in the field of financing of US communities and public infrastructure.{{cite web|url=http://marches.lefigaro.fr/stocks/actualites.html?ID_NOTATION=29298&ID_NEWS=68321862|title=Le Figaro Bourse|work=lefigaro.fr|access-date=2015-11-10|archive-url=https://web.archive.org/web/20081003082924/http://marches.lefigaro.fr/stocks/actualites.html?ID_NOTATION=29298|archive-date=2008-10-03|url-status=dead}}
On 20 June 2008, the US hedge fund manager Bill Ackman announced publicly that he bet on an FSA bankruptcy.{{cite news |last1=Benner |first1=Katie |url=https://money.cnn.com/2008/06/18/news/newsmakers/benner_ackman.fortune/index.htm|title=Ackman has FSA in his sights |date=June 18, 2008 |newspaper=Fortune Magazine }} Four days later, on 24 June 2008, Dexia provided FSA with a credit line of 5 billion euros with an initial term of 5 years but renewable "as needed."{{cite news |last1=Boksenbaum |first1=Alexandre |url=http://www.agefi.fr/articles/Dexia-croise-le-fer-avec-les-hedge-funds-sur-FSA-1046838.html |title=Dexia croise le fer avec les hedge funds sur FSA (Dexia duels with hedge funds over FSA) |date=24 June 2008 |work=agefi.fr |archive-url=https://web.archive.org/web/20080629010206/http://www.agefi.fr/articles/Dexia-croise-le-fer-avec-les-hedge-funds-sur-FSA-1046838.html |archive-date=29 June 2008 }}
FSA posted for the first quarter of 2008 a $421.6 million (~${{Format price|{{Inflation|index=US-GDP|value=421600000|start_year=2008}}}} in {{Inflation/year|US-GDP}}) net loss. This was due to impairment losses recorded on credit default swaps and losses on its portfolio of US mortgage bonds.
On 21 July 2008, Moody's placed FSA's Aaa credit rating on review for possible downgrade.{{cite web |url=https://www.moodys.com/research/Moodys-downgrades-FSA-to-Aa3-from-Aaa-with-developing-outlook--PR_167935 |title=Moody's downgrades FSA to Aa3 from Aaa, with developing outlook |publisher=Moody's Investors Service }} On 7 August 2008, Dexia announced that FSA would exit the activity of ABS and devote its resources to public sector finance.
On 1 July 2009, the FSA group, excluding its structured finance liabilities, was sold to Assured Guaranty Corporation. Assured Guaranty changed FSA's name to Assured Guaranty Municipal Corp. in July 2009.{{cite web |title = Bloomberg snapshot on Assured Guaranty |url=https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4259062|work = |date = |access-date=19 February 2015 }}
References
{{reflist}}
External links
- [http://www.fsa.com/ Site du rehausseur de credit FSA]
- [https://web.archive.org/web/20080324180519/http://www.dexia.com/f/discover/risks_insurance_more.php Site de Dexia]