Franco-Belgian Dexia SA, a lender to local governments, reiterated Tuesday that it is seeking to reduce the risks associated with its troubled New York bond insurance unit after a Belgian newspaper reported that entities backed by Warren Buffett and distressed debt investor Wilbur Ross were close to buying at least part of it.
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The Der Tijd newspaper said that a transaction with Buffett's recently established Berkshire Hathaway Assurance Corp. and Ross affiliate Assured Guaranty Ltd. over Financial Security Assurance Holdings Ltd. was in the final stages. The companies' main interest is FSA's less risky municipal bond guarantee business, the paper said.
"Dexia confirms the mandate given by its board of directors to the chief executive officer on Oct. 20 to explore the options and means which might enable the specific risk of FSA's activity to be reduced," said Dexia, responding to what it called "rumors" about the sale of FSA. "Decisions taken in this context will be the subject of a specific communication in due time." - Laura Board
