Financial Guaranty Insurance Co. yesterday announced a "long-term cooperation agreement" with the Sumitomo Marine and Fire Insurance Co. to jointly develop enhancement business for Japanese asset-backed securities.
The 15-year agreement is also aimed at helping the two companies share knowledge about the structured finance industry worldwide, an FGIC spokesman said.
"We are pleased to now be associated with one of the largest insurers in the Far East," Ann C. Stern, president and chief executive officer of FGIC, said in a statement announcing the deal.
"Sumitomo is interested in learning more about FGIC's successful approach to the structured finance business, and FGIC, in turn, is interested in learning more about the developing Japanese securitization market," Stern said.
Under the terms of the agreement, Sumitomo acquired a 1% share of FGIC's common stock from GE Capital, FGIC's parent company. GE Capital still retains 99% ownership in FGIC.
Financial Security Assurance also has a long-term cooperation agreement with a Japanese financial institution, Tokio Marine and Fire Insurance Co., which owns almost 10% of FSA. Tokio Marine bought that share in late 1991, with an eye toward developing financial guaranty products in Japan.
