MBIA
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MBIA, Inc. (NYSE: MBI) is a financial services company, a member of the S&P 500 index. It was founded in 1973 and headquartered in Armonk, New York and has approximately 400 employees. MBIA is the largest bond insurer.[1]
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[edit] Functions of the company
MBIA is a monoline insurer primarily of municipal bonds and on asset-backed securities and mortgage-backed securities. Financial insurance or Financial Guarantees are a form of credit enhancement. It also provides a fixed-income asset management service with about seventy billion dollars under management.
[edit] Credit rating
MBIA has a rating of A2 from Moody's.
On April 4, 2008 Fitch Ratings cut MBIA's Insurance Corp rating to AA from AAA with a negative outlook [2]. Fitch issued the new, lower rating even though MBIA had asked the ratings company, the month before, to stop assessing its credit worthiness.
On June 4, 2008 Moody's Investors Service announced that it would review MBIA's rating for possible downgrade for the second time in the year. [3]. Four months before this announcement, on February 2008, Moody's had affirmed the AAA rating after MBIA raised $2.6 bn in capital and announced that would stop insuring structured finance securities for six months.
On June 6, 2008, despite having affirmed MBIA's AAA rating on February 2008, Standard and Poor's decided to downgrade MBIA's insurance financial strength rating from AAA to AA. [4].
On June 19, 2008 Moody's downgraded MBIA's credit rating 5 notches to A2. [5]
On November 7, 2008 Moody's further downgraded to "Baa1" from "A2" the insurance financial strength rating.
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN0737320320081107
[edit] History
A consortium of four insurance companies formed the Municipal Bond Insurance Association in 1973 to diversify their holdings in municipal bonds. The company went public in 1987.
[edit] References
- ^ Kathleen Pender (2007-12-20). "Municipal bonds hit by mortgage fallout". http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/20/BU0BU1GHR.DTL.
- ^ Bloomberg.com: Worldwide
- ^ Moody's says will likely cut MBIA, Ambac ratings | Markets | Hot Stocks | Reuters
- ^ S&P cuts top ratings for MBIA, Ambac bond insurers | Markets | Markets News | Reuters
- ^ MarketWatch. "Stocks In Focus For Friday". Fox Business. http://www.foxbusiness.com/story/markets/industries/finance/stocks-focus-friday/-1081423944.
Christine Richard. "MBIA Loses AAA Insurer Rating From Fitch Over Capital". Bloomberg.com. http://bloomberg.com/apps/news?pid=20601087&sid=a0KG6bCua6os.</ref>
[edit] External links
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