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I would do a secondary stock offering as fast as possible, just as Montpelier Re did when it needed to replenish its capital base in Hurricane Katrina's aftermath. I would probably look to raise maybe $500 million. I would give, say, $100 million to TERI which would almost double its unrestricted reserves and ought to preserve its Moody's rating. I would use the remaining $400 million as a capital base to support an on balance sheet loan portfolio. Perhaps I would look to raise even more capital. I would not take the risk that Moody's might downgrade TERI if I could help it--I would intervene first. I also would want to reassure FM's current and potential clients that it truly was a solid business partner as quickly as possible by improving FM's and TERI's financial strength.

Me thinks you put your finger on one variant of the non-securitization measures FM management had in drafting their recent press release. Another could be private placement of restricted securities, possibly convertible in future to registered common shares.
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