Fitch likely to cut FGIC soon-CreditSights analyst

NEW YORK, Jan 28 (Reuters) - Ratings agency Fitch is likely to downgrade bond insurer FGIC Corp soon, CreditSights analyst Rob Haines said on Monday, in a sign the woes of bond insurers are widening.

Fitch said on Dec. 17 that FGIC's main bond insurance unit had too little capital for its top ratings. Without a plan to secure more than $1 billion of capital in four to six weeks, Fitch said in mid-December, FGIC would likely be downgraded.

Jan. 28 is six weeks after that announcement. So far, privately held FGIC, whose owners include private equity group Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz), has not disclosed a plan to secure capital.

Raising capital is difficult now for bond insurers, which have large exposure to repackaged subprime mortgage debt.

Ambac Financial Group Inc (ABK.N: Quote, Profile, Research, Stock Buzz) said on Jan. 18 it was no longer seeking to issue stock or convertibles because of difficult market conditions. MBIA Inc (MBI.N: Quote, Profile, Research, Stock Buzz) successfully sold $1 billion of surplus notes earlier this month, but those bonds have already fallen dramatically in price since then.

New York State insurance regulator Eric Dinallo has been talking to banks about putting together a bailout package for the industry.

"FGIC was supposed to come up with a firm capital plan by today and they are unlikely to. Fitch will likely cut their ratings," Haines said in an interview.

A spokesman for Fitch said the rating agency does not comment on pending rating actions.

FGIC, which as of the end of September had insured $314.8 billion of outstanding bonds, said on Dec 17 it has developed and is actively pursuing a plan to boost its capital. A spokesman for FGIC was not immediately available for comment on Monday.

FGIC is owned by a consortium including mortgage insurer PMI Group Inc (PMI.N: Quote, Profile, Research, Stock Buzz) and private equity firms Blackstone, Cypress Group, and CIVC Partners LP. (Reporting by Dan Wilchins; Editing by Andre Grenon)