As Natixis’ main shareholders announced they would inject US$1.5 billion (EURO 1 billion) into the company's bond insurance unit, its shares soared 17 percent.
The rating of Natixis' U.S. subsidiary CIFG, along with that of other bond insurers, was recently put under review by the Fitch rating agency, causing a sharp share price decline and worries about possible losses for the parent company.
Fitch had said it tested bond insurers that deal with collateralized debt obligations backed by subprime mortgages, and that CIFG had a "high probability" of being unable to maintain the capital and therefore keep its AAA rating.
Natixis' two main shareholders, Groupe Banque Populaire and Groupe Caisse d'Epargne, said Thursday they would provide capital support of US$1.5 billion (EUR1 billion) to CIFG so that the unit could maintain its AAA credit rating with the three rating agencies.
Fitch responded by confirming its triple-A rating for CIFG. The news was welcomed by investors who pushed Natixis' share price 17.4 percent higher at EUR13.30 (US$19.72).
Analysts said the announcement was good news for Natixis' business, but that that there are still other worries for the Paris-based bank, which provides asset management, corporate and investment banking, private equity and private banking.
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