Results of Exchange Offer for Certain Securities Insured by Financial Guaranty Insurance Company (“FGIC”) as of June 28, 2

NEW YORK--(BUSINESS WIRE)-- Sharps SP I LLC (the "Offeror") today announced the results of its offer to exchange residential mortgage-backed securities and asset-backed securities insured by Financial Guaranty Insurance Company ("FGIC") (collectively, the “Eligible Insured Securities”) and the status of certain discussions with holders of Eligible Insured Securities as of June 28, 2010. As of June 28, (i) Eligible Insured Securities representing $2,080,368,905 in current unpaid principal balance measured as of April 30, 2010 have been tendered into the offer, (ii) non-binding agreements have been reached by the Offeror and/or FGIC and Eligible Insured Securities holders to tender Eligible Insured Securities totaling $192,198,237 in aggregate current unpaid principal balance measured as of April 30, 2010, and (iii) letters of transmittal have been completed, although the Eligible Insured Securities have not yet been delivered, with respect to Eligible Insured Securities totaling $535,327,204 in current unpaid principal balance measured as of April 30, 2010. The aggregate current unpaid principal balance of the Eligible Insured Securities referenced in clauses (i), (ii) and (iii) of the preceding sentence represent 30.2% of all Eligible Insured Securities subject to the exchange offer.

Extension of Expiration Date; Withdrawal Rights; Supplement to the Offer

The Offeror has extended the expiration date, which is the last time for holders to tender Eligible Insured Securities in the offer, to 11:59 p.m., New York City time, on July 15, 2010. Withdrawal rights have been granted to all holders for a limited period. Holders may withdraw tendered Eligible Insured Securities from today to 11:59 p.m., New York City time, on July 1, 2010.

The Offeror today has issued a supplement to the offer to exchange (the “Supplement”). Pricing for Eligible Insured Securities tendered subsequent to the date of the Supplement has been modified as disclosed in the Supplement. Holders of Eligible Insured Securities should refer to the Supplement for any revised terms to the offer and updated disclosure regarding FGIC.

FGIC has informed the Offeror that it has reached definitive agreements or agreements in principle relating to certain ABS CDOs and other obligations (the "Other Restructuring Transactions"). Such Other Restructuring Transactions are among those originally contemplated as contributing to FGIC having a policyholders’ surplus of at least $220 million, a condition to the offer. Pursuant to the Other Restructuring Transactions, FGIC will agree to pay approximately $233 million in aggregate to mitigate, commute or terminate its exposure with respect to such ABS CDOs and other obligations, which have an aggregate current principal balance of approximately $4.4 billion. The Other Restructuring Transactions are conditioned upon, among other things, the successful closing of the offer and, if applicable, completion of definitive documentation acceptable to the parties thereto.

The offer is being conducted only with qualified institutional buyers (“Qualified Institutional Buyers”) as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) that are also qualified purchasers (“Qualified Purchasers”) as defined in Section 2(a)(51) under the Investment Company Act of 1940, as amended. The certificates and the surplus notes that may be issued pursuant to the offer have not been and, at the time of the closing of the transaction, will not be registered under the Securities Act or any state securities laws. The certificates may not be offered, sold or transferred in or outside of the United States except in reliance on the exemption from the registration requirements of the Securities Act afforded by Rule 144A thereunder and in accordance with applicable state and foreign securities laws to Qualified Institutional Buyers that are also Qualified Purchasers. The surplus notes may not be offered, sold or transferred in or outside of the United States except in reliance on the exemption from the registration requirements of the Securities Act afforded by Rule 144A thereunder and in accordance with applicable state and foreign securities laws to Qualified Institutional Buyers.

This press release does not constitute an offer to purchase any securities or a solicitation of an offer to sell any securities. The offers are being made only pursuant to an offer to exchange and related letter of transmittal and only to such persons and in such jurisdictions as are permitted under applicable law.

About FGIC

FGIC is a wholly owned subsidiary of FGIC Corporation, an insurance holding company. Please visit www.fgic.com.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” – that is, statements related to possible future events. Forward-looking statements often address expectations and beliefs as to future performance, results and business plans. You should not place undue reliance on forward-looking statements because they speak only as of the date they are made and are necessarily subject to risks and uncertainties that could cause actual results and performance to differ materially from those expressed or implied by such forward-looking statements. Among the factors that could cause FGIC’s actual results or performance to differ are, without limitation: (1) FGIC’s ability to close the offer within the time frame and on the terms required by the New York State Insurance Department (“NYID”) or otherwise; (2) FGIC’s current negative policyholders’ surplus and FGIC’s ability to restore and maintain the statutory required minimum policyholders’ surplus even if it closes the offer and other contemplated restructuring transactions; (3) the extent to which FGIC is able to pursue and achieve other strategic alternatives, either with or without the participation of potential investors and other third parties; (4) the results of FGIC’s other loss mitigation efforts, including FGIC’s ability to consummate contemplated transactions with certain counterparties on certain credit default swaps and other obligations insured by FGIC; (5) a decision by the NYID or FGIC’s other regulators to take further regulatory action such as rehabilitation or liquidation of FGIC by the NYID at any time due to FGIC’s current failure to maintain the statutory required minimum policyholders’ surplus or otherwise; (6) legislative and regulatory developments within the United States and abroad, including the effect of new pronouncements by accounting authorities; (7) fluctuations in the economic, credit, interest rate or other environments in the United States or abroad; (8) potential consequences of FGIC’s continued suspension of claims payments or FGIC’s inability to recommence claims payments such as the risk of defaults under FGIC-insured credit default swaps, FGIC Corporation’s and FGIC’s revolving credit agreement and FGIC Corporation’s senior notes indenture, non-payment of premiums and other amounts owed to FGIC and possible limitations on FGIC’s rights under other agreements; (9) higher losses on FGIC-insured obligations due to deterioration in the performance of residential mortgage loans or otherwise; (10) possible defaults and/or additional ratings downgrades or other adverse actions with respect to mortgage-backed securities or other obligations insured by FGIC; (11) the commencement of new litigation or the outcome of current and new litigation; (12) further deterioration in general economic conditions, including as a result of the financial crisis as well as inflation, interest rates, foreign currency exchange rates and other factors and the effects of disruption or economic contraction due to catastrophic events or terrorist acts; and (13) other risks and uncertainties that have not been identified by FGIC at this time. Forward-looking statements are based upon FGIC management’s current expectations and beliefs concerning future events. FGIC undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

CONTACT:

Investor and Media:
Investor Relations:
+1 212.312.2776
or
Press Relations:
+1 212.312.2775

KEYWORDS:   United States  North America  New York

INDUSTRY KEYWORDS:   Professional Services  Banking  Finance

MEDIA: