One of the last triple-A-rated bond insurers also faces potential problems from backing guaranteed-investment contracts, Morgan Stanley analysts said. Managers of GIC funds invest in highly rated securities, but often those are securitised bundles of subprime mortgages that had been given high ratings. FSA avoided the trouble plaguing Ambac and MBIA by not writing policies for collateralised-debt obligations. FSA's parent company last week provided FSA's GIC business with a $5 billion credit line to make sure it could meet its liabilities.
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