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Article: Secondary market's first-ever auction of bond insurance gets tepid response. (Financial Guaranty Insurance Co.)
- Article from:
- The Bond Buyer
- Article date:
- April 3, 1992
- Author:
CopyrightCOPYRIGHT 1992 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Financial Guaranty Insurance Co. this week conducted the first-ever auction for secondary market bond insurance, but market participants said they were less than enthusiastic about the Massachusetts general obligation enhancement.
Investors on Tuesday bought less than the full $25 million offered by FGIC, and the insurer had to reject certain bids as too low. The new program, FGIC-Bid, seeks to set a market valuation for secondary insurance through a variation on the dutch auction method.
Much of the tepid reaction was due to the choice of bonds being enhanced. Uninsured Massachusetts GOs have enjoyed a robust price appreciation over the last year, and ...