ARMONK, N.Y., Jun 11, 2008 (BUSINESS WIRE) -- MBIA (NYSE:MBI) today issued the following statement on the
deployment of $900 million in cash currently held at MBIA Inc., the
holding company for MBIA Insurance Corporation:
"When we reported our first quarter financial results on May 12,
2008, we said that we would downstream $900 million in proceeds from
our recent public equity offering from the holding company to our
insurance subsidiaries to support our Triple-A ratings," said C.
Edward "Chuck" Chaplin, Chief Financial Officer. "We said then that we
would complete the transfer in 30 days or sooner and this deadline is
now upon us. However, our landscape has changed.
"Last week, the actions taken and statements made by both Moody's
and Standard & Poor's made it clear that, at this point, maintaining
Triple-A ratings for MBIA Insurance Corporation would be dependent on
other factors besides the amount of capital or claims-paying resources
we have," said Mr. Chaplin. "Our capital-raising efforts since the
fourth quarter of 2007, which put us at the forefront of the industry,
were completed to meet the rating agencies' capital requirements to
maintain a Triple-A rating. Our liquidity and ability to pay claims
have never been an issue.
"In fact, we have stated from the beginning that we believe MBIA
Insurance Corporation has substantially more claims-paying resources
and liquidity than it will need to satisfy fully all policyholder
obligations on a timely basis," said Mr. Chaplin. "Now that the
landscape has changed, we will re-evaluate our business strategies and
capital deployment plans, including the deployment of the $900 million
proceeds, while balancing our obligations to policyholders with
optimizing returns to our shareholders. A high priority is pursuing
opportunities to support the bond insurance market as a whole. We are
actively pursuing such solutions in conjunction with the New York
State Insurance Department and other stakeholders."
Forward-Looking Statements
This release contains statements about future results that may
constitute "forward-looking statements" within the meaning of the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. Readers are cautioned that these statements are not guarantees
of future performance. There are a variety of factors, many of which
are beyond MBIA's control, which affect the operations, performance,
business strategy and results and could cause its actual results to
differ materially from the expectations and objectives expressed in
any forward-looking statements. Accordingly, readers are cautioned not
to place undue reliance on forward-looking statements which speak only
as of the date they are made. MBIA does not undertake to update
forward-looking statements to reflect the impact of circumstances or
events that arise after the date the forward-looking statements are
made. The reader should, however, consult any further disclosures MBIA
may make in its future filings of its reports on Form 10-K, Form 10-Q
and Form 8-K.
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. MBIA Inc.'s
principal operating subsidiary, MBIA Insurance Corporation, has
financial strength ratings of Double-A on CreditWatch Negative from
Standard & Poor's Ratings Services and Triple-A, on review for
possible downgrade, from Moody's Investors Service. Please visit
MBIA's Web site at www.mbia.com.
SOURCE: MBIA
MBIA
Media:
Kevin Brown, +1-914-765-3648
or
Elizabeth James, +1-914-765-3889
or
APCO Worldwide
Media:
Jim McCarthy, +1-202-333-8810
