In a move that aims to shore up the parent of one the most active insurers in the municipal bond market, three countries and existing shareholders yesterday propped up Franco-Belgian bank Dexia SA by injecting about $9.2 billion of capital into the company. Meanwhile, Pierre Richard, chairman of the board of directors, and Alex Miller, chief executive officer, both resigned, the company announced.
Dexia also yesterday finalized the terms and conditions of its plans to support Financial Security Assurance Inc.'s financial products unit, or FP. It has converted the unused $5 billion line of credit it provided in June into an equally sized repo facility. In addition, Dexia said it will limit its injections to $500 million of capital into the unit to cover any economic losses beyond the $316 million recognized at the end of June.