Investor Group Acquires Financial Guaranty Insurance Company for $2.18 Billion from General Electric Capital Corporation

New York, NY, December 18, 2003 - An investor group consisting of The PMI Group, Inc. (“PMI”), The Blackstone Group (“Blackstone”), The Cypress Group (“Cypress”) and CIVC Partners L.P. (“CIVC”), collectively the “Investor Group”, announced that it has completed the acquisition of Financial Guaranty Insurance Company (“FGIC”) from General Electric Capital Corporation (“GE”) in a transaction valued at approximately $2.18 billion. PMI is the largest shareholder in FGIC with 42% ownership. Blackstone and Cypress each own 23%. CIVC owns 7% of the new company and GE has maintained a 5% stake. The acquisition was first announced on August 4, 2003. It is anticipated that shortly following closing, FGIC’s holding company, FGIC Corporation, will issue approximately $245 million of senior debt as part of its permanent capital structure.

Commenting on the transaction, Frank J. Bivona, FGIC’s new Chief Executive Officer, noted, “We’re very excited about FGIC’s future. This is our first step in becoming a true global provider of credit enhancement. As a result of our new ownership and direction, FGIC will be able to offer the marketplace a wider array of credit enhancement products and to take advantage of synergistic opportunities with PMI. Though expanding, FGIC will continue to maintain the disciplined risk management and credit standards that investors have come to expect. And, as always, FGIC will be supported by a strong capital base and a talented staff.”

Established in 1983, FGIC is a leading monoline financial guaranty insurance company, primarily engaged in the business of providing credit enhancement on public finance and structured finance securities. FGIC typically guarantees the scheduled payments of principal and interest on an issuer’s obligation. FGIC’s financial strength is rated triple-A by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.

The PMI Group, Inc. (NYSE:PMI), headquartered in Walnut Creek, California is an international provider of credit enhancement products and lender services that promote home ownership and facilitate mortgage transactions in the capital markets. Through its wholly owned subsidiaries and unconsolidated strategic investments, PMI offers residential mortgage insurance and credit enhancement products domestically and internationally, residential lender services and financial guaranty reinsurance.

The Blackstone Group, a private investment bank with offices in New York and London, was founded in 1985. The firm has raised a total of approximately $24 billion for alternative asset investing since its formation. Over $14 billion of that has been for private equity investing, including Blackstone Capital Partners IV, the largest international private equity fund ever raised at $6.45 billion. In addition to Private Equity Investing, The Blackstone Group’s core businesses are Private Real Estate Investing, Corporate Debt Investing, Marketable Alternative Asset Management, Mergers and Acquisitions Advisory, and Restructuring and Reorganization Advisory.

The Cypress Group manages two private equity funds with more than $3.5 billion in commitments. Cypress invests in privately negotiated transactions, targeting operating businesses and investing with management to foster continued growth. Investments made by Cypress include: AMTROL, Inc., Catlin Group Ltd., Cinemark USA, Inc., ClubCorp, Inc., Danka Business Systems PLC, MedPointe Inc., The Meow Mix Company, Montpelier Re Holdings Ltd., Republic National Cabinet Corporation, WESCO International, Inc. and Williams Scotsman, Inc.

CIVC Partners manages $1.3 billion in capital on behalf of its limited partners, including Bank of America. CIVC Partners focuses on leveraged buyouts and growth equity investments in the financial services, business services, media and communications, and industrial growth sectors. CIVC’s investment in FGIC is a continuation of its financial services investment focus, and in particular the financial guaranty experience gained from its investment, together with PMI, in Ram Reinsurance Company, Ltd. a leading financial guaranty reinsurer. Other financial services investments made by CIVC Partners include AF&L Insurance, Inc., Factual Data Corporation, First Franklin Financial Companies, Inc., Management Compensation Group, Northwest, Inc., Sunbelt National Mortgage Corporation, and Wintrust Financial Corporation.

Banc of America Securities LLC originated the transaction and served as exclusive financial advisor to the Investor Group. Simpson Thacher & Bartlett LLP served as legal advisors to the investor group.

Statements in this press release that are not historical facts or that relate to future plans, events or performance are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including conditions affecting the financial guarantee industry and general economic conditions. Other risks that could affect PMI are discussed in various Securities and Exchange Commission filings, including its report on Form 10-K for the year ended December 31, 2002, and its report for the quarter ended September 30, 2003. PMI undertakes no responsibility to update forward-looking statements.

NOTE TO EDITORS: For additional information about this transaction, please see the press release issued by The PMI Group today.


At PMI At Blackstone
Matt Nichols John Ford
925-658-6618 212-583-5559

At Cypress At CIVC
David Lilly Michael Miller
212-521-4878 312-828-7950

At Banc of America Securities At FGIC
Tara Burke Brian Moore
212-847-6488 212-312-2776