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FGIC Loses AAA Rating
Financial Guaranty Insurance Co., the world's fourth-largest bond insurer, lost its AAA credit rating at Fitch Ratings after missing a deadline to raise capital.
The bond insurer was cut two levels, to AA, Fitch said. The company had been AAA since at least 1991. Moody's Investors Service and Standard & Poor's are also reevaluating their ratings.
FGIC guaranteed $21 billion of home-equity securities, $8.8 billion of subprime mortgage debt, and $10.3 billion of collateralized debt obligations backed by subprime mortgages and other loans, the Web site shows.
S&P May Cut More Ratings
Standard & Poor's said it cut or may reduce ratings of $534 billion of subprime-mortgage securities and collateralized debt obligations as home loan defaults rise. The downgrades may extend losses at the world's banks to more than $265 billion, S&P said.
The securities represent $270.1 billion, or 47 percent, of subprime mortgage bonds rated from January 2006 to June 2007, S&P said. The ratings company also said it may cut 572 CDOs valued at $263.9 billion.
PHARMACEUTICALS
Eli Lilly Subpoenaed
Eli Lilly said it received a subpoena in November from a U.S. grand jury in Pennsylvania seeking documents involving the marketing of the company's best-selling drug, the antipsychotic Zyprexa. It is cooperating in state and U.S. investigations into its marketing practices, according to spokeswoman Marni Lemons.
Lemons's statement also cited "many speculative statements" in a New York Times article that said the drugmaker may pay more than $1 billion to settle the investigation. "We regularly have discussions with the government," Lemons said. She didn't comment further on the Times article.
CONSUMER SAFETY
Lawmakers Press Mattel on Lead
Dozens of federal lawmakers are demanding that Mattel stop selling toys that contain any amount of lead. The demand was contained in a letter released by Rep. Elijah E. Cummings (D-Md.). It was signed by more than 50 fellow lawmakers and sent to Mattel on Tuesday.
WALL STREET
