Moody’s Reviews Ratings Of MBIA For Possible Downgrade

From:
http://www.rttnews.com/sp/breakingnews.asp?date=01/18/2008&item=84

Moody’s Reviews Ratings Of MBIA For Possible Downgrade [MBI]

1/18/2008 11:38:20 AM Insurance company MBIA Inc. (MBI) Friday said it found the move by Mood’s Investors Service to review the company’s ratings for a potential downgrade, surprising. Moody’s initiated a review of the Aaa financial strength ratings of MBIA Insurance Corp. and its affiliates as well as the Aa2 ranting of MBIA’s latest Surplus Notes.

The rating agency also contemplates a downward revision of the Aa3 ratings of the Junior obligations of MBIA Insurance and the senior debt of MBIA Inc. MBIA stock is currently trading nearly 23% below the previous close.

The Armonk, New York-based MBIA stated that it would address the remaining concerns of Moody’s with regard to its ratings and work towards stabilizing its Aaa ratings from all the three rating agencies.

As part of the capital strengthening plans initiated by MBIA, the Warburg Pincus committed $500 million of new equity, besides agreeing to backstop a $500 million rights offering. Additionally, the company issued $1 billion of Surplus Notes, enhancing its capital strength. The company said its capital position meets or exceeds the requirements set fourth by Mood’s for sustaining the triple-A position.

MBIA Chairman Gary Dunton commented, “Fitch yesterday affirmed our Triple-A ratings with a stable outlook and Standard & Poor’s confirmed that, even with their recently revised loss assumptions for 2006 vintage subprime exposure, MBIA exceeds their AAA capital requirements.”

MBI is currently trading at $7.06, down $2.16 or 23.43%, on a volume of 13.54 million shares.