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January 31st, 2008

MBIA Loses $2.3 Billion on Write-Downs

“The effect of these reserving and impairment activities on our capital position will be more than offset by the successful completion of our capital plan, which will increase our capital position by well over $2 billion”

MBIA Inc. reported write-downs of $3.5 billion on souring credit derivatives in the fourth quarter Thursday, raising the possibility that the world’s largest bond insurer could lose its top credit rating.

Continued weakness in the bond insurance market may put struggling banks in a precarious position. Banks, which have reduced portfolio values by more $140 billion during the second half of 2007 in a deteriorating mortgage market, might be forced to take further write-downs tied to bonds insured by companies like MBIA. Read more



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