Housing two ways…

wilton.jpegLast month, XL Capital (XL) spun off Security Capital Assurance (SCA) in a $460 million IPO. On Friday, Security Capital filed its first Q which had this interesting disclosure about the housing market in Wilton, Ct. where its CEO, Paul Giordano, lives.

In the contract, the company agrees to provide Giordano with "loss protection" — something we’re starting to see with increasing frequency as I first reported in Slate last month — on his Connecticut home through June 2010. The clause basically protects Giordano from having to sell his house at a loss and even includes a tax gross-up on whatever that loss works out to be.

The contract also provides Giordano with a $10,000 a month "housing allowance" for the next two years, though it’s not immediately clear from the contract — despite it stretching on for 21 pages — whether that money is being used to pay for the house in Wilton or for a corporate apartment in Bermuda — a common perk offered to many insurance executives. The perk, which started at $15K a month, drops to $5K a month for the final two years of the agreement.

So at least at first blush, SCA is paying for the Wilton house and guaranteeing that the house won’t decline in value. Not a bad deal, if you can get it.