MBIA shares rally again
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- June
- 13
Shares of struggling Armonk-based bond insurer MBIA Inc. rose for a second straight day today after the company said it might pay out a special dividend, buy back shares or start a new insurance company.
MBIA shares closed at $5.87, up 56 cents, or 10.56 percent. On Thursday, MBIA shares rose 46 cents, or 9.48 percent.
The company is looking for a way to use $900 million in a way that increases shareholder value. MBIA said in February that it would contribute the money to its insurance subsidiary.
But Standard & Poors this week took away the insurer’s top rating. That action came less than a week after Moody’s Investors Service indicated it might cut the rating.
The rating agencies’ announcements prompted MBIA chief executive Jay Brown to say Thursday in a letter to shareholders that the company might use the money for a new insurance company.
Brown added: “Most of you have correctly identified that we can significantly increase shareholder value by either a special dividend or a share buy-back, in addition to buying back a variety of debt instruments.
“And we intend to pursue all strategies to maximize shareholder value, while executing against our objective to maintain financial flexibility,” he wrote.
Shares of MBIA have dropped 90.92 percent the last year, mainly due to the company’s exposure to subprime mortgage loans.
This entry was posted
on Friday, June 13th, 2008 at 4:04 pm by Allan Drury.
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