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Thursday, February 21, 2008

MBIA CEO Recommends Split

by Calculated Risk on 2/21/2008 05:13:00 PM

From Bloomberg: MBIA Advocates Severing Municipal, Corporate Units

MBIA Inc.'s new Chief Executive Officer Jay Brown, under pressure to come up with a plan to rescue the troubled company, said bond insurers must separate their municipal guarantees from asset-backed securities.

...Bond insurers should also stop issuing credit-default swaps, Brown said.

Moody's Investors Service, which has AAA ratings on the insurance arms of MBIA and Ambac, has said it plans to complete a review of the ratings by the end of the month. Standard & Poor's is also considering a downgrade of the companies' ratings.
The three largest insurers all want to split their businesses.

From the WSJ Feb 17th: Ambac in Talks to Split Itself Up

From the WSJ Feb 15th: FGIC Will Request Break-Up