MBI - MBIA Inc

[Leebert]

MBIA Inc., through its subsidiaries, is a leading financial guarantor and provider of specialized financial services. MBIA's innovative and cost-effective products and services meet the credit enhancement, financial and investment needs of its public and private sector clients, domestically and internationally. Please visit MBIA's Web site at www.mbia.com.

[LuckyOne]

Yeah, up about 15% on that news.

[Leebert]

Just have to look at the valuations here..... these are the kinds of businesses that cant afford to go under and wont be allowed to go under

[rossiTK]

down 22%


BIX S&P Bank Index-Bix (INDEX)

[Doublrs]

Holy crap!

S&P affirms MBIA unit's AAA rating; outlook negative
2:17a ET December 20, 2007 (MarketWatch)
TEL AVIV (MarketWatch) -- MBIA Inc., the Armonk, N.Y., financial guarantor, said that the credit-rating concern Standard & Poor's affirmed the AAA financial-strength rating for MBIA Insurance Corp. S&P cut the outlook on parent MBIA Inc. and MBIA Insurance to negative from stable. The parent's chairman and chief executive officer, Gary Dunton, said in a statement on Wednesday that the firm continues to "progress towards the implementation of a capital-management plan during the first quarter of 2008," including closing the Warburg Pincus commitment to invest as much as $1 billion.

[rossiTK]

MBI MBIA bond risk soars on $8.1 billion CDO disclosure - Bloomberg.com (20.95 -6.07) -Update-

Bloomberg.com reports the co's shares plunged, and the risk of default soared after the world's biggest bond insurer revealed that it guarantees $8.1 bln of collateralized debt obligations repackaging other CDOs and securities linked to subprime mortgages. Credit-default swaps tied to MBIA's bonds climbed 115 basis points to 595 basis points, the widest on record, according to CMA Datavision in London. MBIA posted a document on its Web site late yesterday showing it insured the so-called CDOs-squared, a potentially riskier form of security than what the co typically guarantees. Rising defaults on subprime mortgages packaged into securities have led to bond downgrades and threatened MBIA's AAA guaranty rating. Credit-default swaps tied to MBIA's bond insurer, MBIA Insurance, climbed the most in at least a year. The five-year contracts, used to speculate on the company's ability to repay its debt or hedge against the risk it doesn't, rose 95 basis points to 340 basis points, CMA prices show. That means it would cost $340,000 a year to protect $10 million in MBIA Insurance bonds from default for five years. Contracts tied to Ambac rose 30 basis points to 595 basis points, according to CMA. "We are shocked management withheld this information for as long as it did,'' Ken Zerbe, an analyst with Morgan Stanley in New York, wrote in a report yesterday. "MBIA simply did not disclose arguably the riskiest parts of its CDO portfolio to investors.'' "How is confidence expected to return to the capital markets when these types of surprises continue to pop up?'' said Peter Plaut, an analyst at New York-based hedge fund manager Sanno Point Capital Management"... MBIA's disclosure explains why S&P and Moody's Investors Service turned more negative on the industry in recent weeks, Zerbe said. Last month, Moody's said MBIA was "unlikely'' to fall below its target capital level for an AAA bond insurer despite downgrades of securities backed by subprime mortgages. Ambac had been flagged as "moderately'' likely to need more capital. "This disclosure completely changes our view of MBIA being a more conservative underwriter relative to Ambac,'' Zerbe wrote. (Briefing Note: This story hit before the latest headline from Bloomberg indicating that CDO exposure was reflected in S&Ps analysis. Wanted to put the story in context, because it does appear that some institutional investors/analysts are feeling blindsided by this latest disclosure.)

[LuckyOne]

Up 14% AH after it announces it will issue $750 million in stock.

[Hyper]

lol I thought it didn't have a capital issue?

They better contain this crap quick. I know they are trying to fast track Buffet's insurer, but damn, they better drop the AAA rating on these AFTER Buffet is in place.

[mmm...Jaz]

MBIA, Ambac fall on concern about plans to start new units
3:00 PM ET 7/28/08 | Marketwatch

SAN FRANCISCO (MarketWatch) -- Shares of MBIA Inc. and Ambac Financial fell Monday on concern the bond insurers may struggle to get crucial top ratings for new municipal bond units they're planning.

MBIA (MBI) was downgraded to in line from outperform by Gary Ransom and Amit Kumar, analysts at Fox-Pitt, Kelton Cochran Caronia.

MBIA shares fell 7.6% to $4.50 during afternoon trading on Monday, while Ambac dropped 8.8% to $1.96.

MBIA and Ambac have lost their triple-A credit ratings this year as guarantees they sold on mortgage-backed securities and more complex mortgage-related securities called collateralized debt obligations, or CDOs, soured. Without top ratings, bond insurers struggle to sell new policies.

Ambac (ABK) is now hoping to pump capital into a subsidiary called Connie Lee and launch it as a new bond insurance business focused on guaranteeing municipal debt and global infrastructure deals. See full story.

MBIA is considering a similar strategy. See full story.

However, for these new units to thrive, they would likely need to garner triple-A ratings from top ratings agencies including Moody's Investors Service and Standard & Poor's.

That looked less likely last week after Moody's warned it may downgrade its Aaa ratings on Assured Guaranty and Financial Security Assurance, the only two incumbent bond insurers that had been able to hang on to their top ratings. See full story.

Moody's decision to put Assured Guaranty on review wasn't just based on whether the insurer had enough spare capital to cushion it against losses in a worst-case scenario, the company noted last week.

The ratings agency was also unclear whether the creation of a separate unit to focus on guaranteeing muni bonds would help Assured Guaranty, Fox-Pitt's Ransom and Kumar said on Monday.

"Moody's appears to be on a path to remove all the triple-As from the major financial guarantors," the analysts wrote in a note to investors. "Moody's action also raises the question of whether the creation of a new municipal insurance entity, as Ambac and MBIA are attempting to do, will be a successful business model."

"Rating agency approval stands squarely on the critical path for successful restructuring at Ambac and MBIA, and Moody's recent action makes it more difficult get past that milestone," they wrote.

The analysts also downgraded RAM Holdings (RAMR) to in line from outperform on Monday.

RAM, a bond reinsurance company, fell 3.1% to 95 cents.

[mmm...Jaz]

AP
MBIA 2nd-quarter profit soars on hefty gains
Friday August 8, 2:32 pm ET
By Stephen Bernard, AP Business Writer
MBIA 2nd-quarter profit soars on gains related to credit derivatives

NEW YORK (AP) -- Bond insurer MBIA Inc. said Friday its second-quarter profit swelled due to non-cash gains on a portfolio of complex insurance contracts.

MBIA earned $1.7 billion, or $7.14 per share, during the second quarter, compared with earnings of $211.8 million, or $1.61 per share, during the same quarter last year.

Operating earnings, which exclude special non-cash gains and charges, totaled $228.9 million, or 96 cents per share, in the quarter ended June 30. Operating earnings from the year-ago quarter were $206.9 million, or $1.57 per share. MBIA had more shares outstanding during the most recent quarter, which is why earnings per share fell despite an increase in operating earnings.

Analysts polled by Thomson Financial, on average, forecast a loss of $1.37 per share for the quarter. Analysts do not always include special gains and losses when making estimates.

MBIA's second-quarter profit included $3.36 billion in non-cash pretax gains on its derivatives portfolio because of factors including the bond insurer's own credit risk.

Competitor Ambac Financial Group Inc. took a similar gain on its derivatives portfolio during the second quarter as well, which helped boost its net income.

Also like Ambac, MBIA struggled to generate new business after its critical financial strength ratings were cut by major ratings agencies. Ratings agencies have worried since late last year that rising defaults on mortgages would lead to a rise in defaults among bonds backed by the troubled loans. Uncertainty surrounding total potential losses on those bonds and other complex insurance contracts led ratings agencies to cut the financial strength ratings of nearly all bond insurers.

The lower ratings have cut into insurers abilities to generate new business.

"Our biggest disappointments this quarter were the downgrades by Standard & Poor's and Moody's (Investors Service), which had a significant impact on our asset management business and our ability to write new insurance business," Jay Brown, MBIA's chairman and chief executive, said in a statement.

Net premiums written during the second quarter at MBIA totaled $109 million, a decline of 42 percent from the $187.7 million written during the year-ago quarter.

During the second quarter, S&P cut MBIA's financial strength rating to "AA" from "AAA." Moody's cut the rating to "A2" from "AAA."

Aside from affecting MBIA's ability to write new business, the downgrades also triggered requirements that MBIA sell certain assets from its asset and liability management business at a loss and take impairment charges on other assets. MBIA recorded a $742 million pretax loss from the asset sales and impairments.

MBIA said deterioration in the housing and credit markets was consistent with its earlier projections, so it did not have to set aside as much cash for potential losses as it had in recent quarters.

"While the deterioration in the housing and mortgage markets continued over the past three months, it has been consistent with what we projected when we established reserves and impairments for our housing-related portfolio in the first quarter," Brown said in the statement.

Questions surrounding those eventual losses has led some bond insurers to reduce their exposure to the riskiest debt by paying a premium to cancel insurance contracts.

During a conference call with analysts and investors, Brown said MBIA has been in "active negotiations" for about six months with some of its counterparties to reduce its exposure to certain risky bonds.

Brown said he was unsure if any deals would eventually be struck.

Late last week, Ambac agreed to pay $850 million to end an insurance agreement covering a $1.4 billion collateralized debt obligation. So-called CDOs are complex financial instruments that combine various slices of debt.

Syncora Holdings Ltd. -- which until earlier this week was known as Security Capital Assurance Ltd. -- has also reached deals recently to end its exposure to certain debt.

Shares of MBIA rose 62 cents, or 7.5 percent, to $8.90 in afternoon trading. The stock has ranged from $3.62 to $68.98 over the past year.