ARMONK, N.Y.--(BUSINESS WIRE)--
MBIA Inc. (NYSE: MBI) (the Company) today announced that its
wholly-owned subsidiary, MBIA Insurance Corporation (MBIA Corp.) has
entered into an agreement (the Settlement Agreement) to settle the
lawsuit filed by MBIA Corp. on January 11, 2013 against Flagstar Bank
and certain affiliated entities (Flagstar). The lawsuit related to
approximately $1.1 billion of securitization transactions backed by
second-lien mortgages which were insured by MBIA Corp. in 2006 and 2007.
Under the terms of the Settlement Agreement, MBIA Corp. will terminate
its pending lawsuit against Flagstar and in exchange will receive $110.0
million in cash and other consideration. MBIA Corp. will use the cash
received to repay a portion of its secured loan from National Public
Finance Guarantee Corp. in accordance with its terms.
“We are pleased to have reached a settlement with Flagstar that brings
an end to our litigation without further delay and expense and results
in cash and other consideration to MBIA Insurance Corp. in an amount
consistent with our recovery expectations,” said Jay Brown, MBIA CEO.
“We will continue to focus on resolving our remaining litigation with
other parties so that National Public Finance Guarantee Corp., our U.S.
muni-only insurer, can resume its role as a leader in the U.S. public
finance insurance market.”
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
cause actual results to differ materially from historical earnings and
those presently anticipated or projected, 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 risk that MBIA Insurance Corporation will
be placed in a rehabilitation or liquidation proceeding by the NYSDFS,
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 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 financial performance or could cause actual
results to differ materially from estimates contained in or underlying
the Company’s forward-looking statements 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., 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.
MBIA Inc.
Media:
Kevin Brown, +1-914-765-3648
or
Investor
Relations:
Greg Diamond, +1-914-765-3190
Source: MBIA Inc.