MBIA Offering $750 Million in Stock
Bond insurer MBIA Inc. said Wednesday it will issue $750 million in common stock as it struggles to try and maintain its crucial "AAA" financial strength rating.
MBIA will offer about 50.3 million shares of common stock - at about $14.91 per share - to raise the funds, which it will place in reserve to cover potential future claims.
On Tuesday, Fitch Ratings warned it might downgrade MBIA from "AAA." Standard & Poor's placed MBIA on a negative watch last week. Other bond insurers - including Ambac Financial Group Inc., Security Capital Assurance Ltd. and Financial Guaranty Insurance Co. - were downgraded in recent weeks.
Bond insurers essentially need a "AAA" rating to book new business.
Separately, MBIA said it revised certain fourth-quarter charges, resulting in a $6.5 million decrease to the company's previously announced losses of $2.3 billion.
The adjustment in charges included increasing loss reserves for exposure to home equity products to $200 million from $100 million. That increase was offset by a $110 million reduction in write-downs the company took during the quarter.
Shares of MBIA rose $1.22, or 8.5 percent, to $15.50 in aftermarket electronic trading, after shares fell 62 cents to close the regular session at $14.28.
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