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NEW FITCH REPORT SPOTLIGHTS BOND INSURERS' OWNERS -- FITCH FINANCIAL WIRE --

 NEW FITCH REPORT SPOTLIGHTS BOND INSURERS' OWNERS
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Feb. 7 /PRNewswire/ -- Public shareholders will own over $2 billion or 43 percent of the bond insurance industry's equity upon completion of the most recent public offerings, according to a report being published next week by Fitch. This percentage is up from only 3 percent at the end of 1986.
 The report, "Who's Backing Bond Insurers?", describes the explosion of public ownership, the exodus of institutional owners from the bond insurance industry, and discusses the impact of public ownership on claims-paying ability. The report comes on the heels of filings for public offerings by primary insurers MBIA Inc. and AMBAC Inc. and reinsurers Capital Re Corp. and Enhance Financial Services Group Inc., expected to raise over $1 billion.
 Bond insurance is an extremely capital-intensive business and public equity has proven to be an excellent source of growth capital for large, established bond insurers, Fitch says. At the same time, many institutional owners are using the current bull market as an opportunity to unload their stakes in the bond insurers and allocate capital to core business lines.
 Strategic institutional owners are potential sources of capital for insurers facing large unexpected losses, when the public equity market may be unavailable, says Fitch. It is important for bond insurers which lose their strategic institutional owners to plan their capital needs more carefully and establish other means of accessing emergency capital. GE Capital, with $800 million invested in FGIC, and US West, with $500 million invested in FSA, will be the only remaining institutional owners with majority stakes in bond insurance companies.
 Fitch expects additional public equity offerings and predicts that public ownership in the industry will soon exceed 50 percent. Fitch also expects the bond insurers to issue more public debt -- the current industry total is only $350 million -- given the current low interest rate environment.
 -0- 2/7/92
 /CONTACT: David Litvack, 212-908-0593 or Mark H.S. Cohen, 212-908-0512, both of Fitch/ CO: Fitch Investors Service ST: New York IN: FIN SU: ECO


JT -- NY048 -- 7786 02/07/92 12:56 EST
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Publication:PR Newswire
Date:Feb 7, 1992
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