Major FGIC Bondholder Applauds Unique Global $950 Million Settlement With Bank Of America

Fir Tree Partners Says Settlement Provides Excellent Value For Bondholders

Apr 16, 2014, 07:17 ET from Fir Tree Partners

NEW YORK, April 16, 2014 /PRNewswire/ -- Fir Tree Partners, a $12 billion private investment firm that has been a major bondholder of RMBS insured by Financial Guaranty Insurance Company ("FGIC") since 2008, praised today's announcement of a unique, global settlement between an ad hoc group of bondholders (the "Ad Hoc Group") of nine FGIC insured Countrywide RMBS Trusts (the "RMBS Trusts"), Bank of America, FGIC, Freddie Mac and BNY Mellon as Trustee, that will provide $950 million in cash payments to the RMBS Trusts and FGIC to settle mortgage repurchase claims.

The global settlement, the first of its kind involving a monoline insurer and bondholders working together to resolve mortgage repurchase claims, provides for more than $365 million in direct cash payments from Bank of America to the RMBS Trusts (the "Trust Settlement"), while FGIC received approximately $584 million (the "FGIC Settlement").

Bondholders also will recover, along with all other FGIC policyholders, their pro rata share of the FGIC Settlement when it makes future distributions to policyholders pursuant to its Plan of Rehabilitation, which was submitted and confirmed last year.  Fir Tree also played an instrumental role in the successful outcome of FGIC's restructuring and confirmation of its Plan of Rehabilitation. 

The global settlement, which was structured and negotiated by Fir Tree, one of the largest bondholders and the only steering committee member of the Ad Hoc Group, does not require any court approval and has already become effective and been funded by Bank of America for seven of the nine RMBS Trusts with the remaining expected to close and be paid within 45 days. The FGIC Settlement also has gone effective and been funded by Bank of America.

"This global settlement represents the culmination of complex and extensive negotiations, as well as the cooperation and support of FGIC, Bank of America, Freddie Mac and the Ad Hoc Group, to provide a very successful outcome," said Evan Lederman, Associate General Counsel at Fir Tree.  "We applaud John Dubel and the FGIC management team for their efforts throughout this process."

David Proman, Director of Structured Products at Fir Tree, who, along with Lederman, negotiated the global settlement on behalf of bondholders, said, "This unique global settlement provides both significant direct cash payments to the RMBS Trusts and increased long-term value to all FGIC policyholders."

About Fir Tree Partners
Fir Tree Partners, founded in 1994 and located in New York, NY (HQ) and Miami, FL, is a value-oriented investment manager that manages private investment funds for endowments, charitable and philanthropic foundations, pension funds and other institutional and private investors.  Fir Tree manages approximately $12 billion, invested worldwide in public and private companies and real estate across a wide variety of sectors and security types.

SOURCE Fir Tree Partners