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Wednesday, December 05, 2007

Moody's: MBIA Capital Shortfall "Somewhat Likely"

by Calculated Risk on 12/05/2007 01:40:00 PM

From Bloomberg: MBIA Capital Shortfall May Be `Likely,' Moody's Says (hat tip Mike and Brian)

MBIA Inc. is ``somewhat likely'' to face a capital shortfall, throwing its AAA credit rating in jeopardy and putting at risk the rankings of the state, municipal and corporate debt it guarantees, Moody's Investors Service said. ...

A review of MBIA, the largest bond insurer, will be completed within two weeks ...

``The guarantor is at greater risk of exhibiting a capital shortfall than previously communicated,'' Moody's said. ``We now consider this somewhat likely.''

The loss of MBIA's top ranking would cast doubt over the ratings of $652 billion of municipal and structured finance bonds that the company guarantees.