ARMONK, N.Y.--(BUSINESS WIRE)--
MBIA Inc. (the “Company” or “MBIA”) (NYSE: MBI) today announced that it
recommends rejection of the unsolicited tender offer by Bank of America
Corporation (“BOA”) on November 13, 2012 to purchase all of MBIA’s
outstanding 5.70% Senior Notes due 2034 (the “Notes”). MBIA Inc. is the
parent of MBIA Insurance Corporation (“MBIA Corp.”).
MBIA arrived at this position after considering all of the facts and
circumstances surrounding BOA’s unsolicited note tender offer. In
particular, MBIA believes that BOA’s tender offer is not in the best
interest of the holders of our Notes because:
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As reflected in BOA’s own public statements, we believe the purpose of
BOA’s tender offer is not to make an economic investment in MBIA
Inc.'s debt securities, but rather to affect the outcome of MBIA
Corp.'s RMBS-related put-back claims against BOA and obtain a
preferential settlement of those claims and its other MBIA Corp.
exposure. Such an outcome would be detrimental to all policyholders
other than BOA; and, in combination with BOA’s stated intention that
the consent solicitation amending the bond indentures fail,
detrimental to all MBIA Inc. bondholders. MBIA is evaluating its legal
options with respect to BOA’s tender offer, including whether it
violates any applicable laws, and may take such actions as it believes
are available to it and necessary to protect the interests of its
insurance subsidiaries' policyholders and its security holders. There
can be no assurance that MBIA will prevail in any such action if it
commences an action or that MBIA will successfully contest BOA’s
tender offer on these or other grounds.
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BOA has retained a right to terminate the tender offer under a number
of specified circumstances, significantly reducing the likelihood that
the transaction will be completed.
The announcements contained in this press release were made pursuant to
MBIA’s obligations under Rule 14e-2 under the Securities Exchange Act of
1934.
Holders of our Notes with questions about the Notes, the Consent
Solicitation, MBIA’s position with respect to the BOA tender offer or
other matters should consult his or her financial advisor or MBIA’s
Investor Relations Department at 914-765-3190.
About MBIA
MBIA Inc., headquartered in Armonk, New York is a holding company whose
subsidiaries provide financial guarantee insurance, as well as related
reinsurance, advisory and portfolio services, for the public and
structured finance markets, and asset management advisory services. The
Company services its clients around the globe with offices in New York,
Denver, San Francisco, Paris, London, Madrid and Mexico City. Please
visit MBIA's website at www.mbia.com.
Forward-Looking Statements
The information contained in this press release should be read in
conjunction with our filings made with the Securities and Exchange
Commission. This release includes statements that are not historical or
current facts and are "forward-looking statements" made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. The words "believe," "anticipate," "project," "plan," "expect,"
"intend," "will likely result," "looking forward" or "will continue,"
and similar expressions identify forward-looking statements. These
statements are subject to certain risks and uncertainties that could
affect BOA’s tender offer or the Company’s operations, including, among
other risks and uncertainties, whether the Company will realize, or will
be delayed in realizing, insurance loss recoveries expected in disputes
with sellers/servicers of RMBS transactions at the levels recorded in
its financial statements, the possibility that the Company will
experience severe losses or liquidity needs due to increased
deterioration in its insurance portfolios and in particular, due to the
performance of CDOs including multi-sector, CMBS and CRE CDOs and RMBS,
the failure to obtain regulatory approval to implement our risk
reduction and liquidity strategies, the possibility that loss reserve
estimates are not adequate to cover potential claims, the possibility
that the Company's obligations will be accelerated if MBIA Corp. becomes
subject to a rehabilitation or liquidation proceeding, the Company's
ability to access capital and the Company's exposure to significant
fluctuations in liquidity and asset values within the global credit
markets, in particular in the ALM business, the Company's ability to
fully implement its strategic plan, including its ability to achieve
high stable ratings for National Public Finance Guarantee Corporation or
any other insurance subsidiaries, and the Company's ability to commute
certain of its insured exposures, including as a result of limited
available liquidity, the Company's ability to favorably resolve
litigation claims against the Company, and changes in general economic
and competitive conditions. These and other factors that could affect
the Company’s operations are discussed under the "Risk Factors" section
in MBIA Inc.'s most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q, which may be updated or amended in the Company's
subsequent filings with the Securities and Exchange Commission. The
Company cautions readers not to place undue reliance on any such
forward-looking statements, which speak only to their respective dates.
The Company undertakes no obligation to publicly correct or update any
forward-looking statement if it later becomes aware that such result is
not likely to be achieved.
MBIA Inc.
Media:
Kevin Brown, +1-914-765-3648
or
Investor
Relations:
Greg Diamond, +1-914-765-3190
www.mbia.com
Source: MBIA Inc.