Updated from 8:09 a.m. EDT
confirmed an agreement to sell its bond-insurance unit for about $2.2 billion to a group led by mortgage-backer
"This transaction is consistent with GE Insurance's strategy to focus its global operations on key segments, while allowing GE to selectively re-deploy capital in new business lines it intends to grow rapidly," GE said in a release. "Importantly for FGIC's customers, the proposed deal positions the company to maintain its triple-A ratings."
The transaction will give PMI with a little over 40% of the unit, which is called Financial Guaranty Insurance Co. Two private equity firms, Blackstone Group and Cypress Group, will each end up with 20% stakes.
Bank of America
will own about 7% of the company, which mainly insures corporate and municipal bonds.
GE will receive cash proceeds of $1.86 billion, including a pre-closing dividend of $260 million. GE will retain preferred stock of $235 million and less than 5% of the common stock.