MBIA shares fall in wake of downgrade
-
- June
- 20
Shares of MBIA Inc. tumbled 13 percent today after Moody’s Investor Service stripped the struggling Armonk-based bond insurer of its prized Aaa rating, Moody’s highest.
Moody’s downgraded MBIA’s rating two notches to A2. Moody’s also downgraded the rating for MBIA rival Ambac Financial Group Inc. one step to Aa.
The move, taken late Thursday, followed similar actions by Fitch Ratings and Standard & Poor’s.
“MBIA’s insured portfolio remains vulnerable to further economic deterioration,†Moody’s said in a statement. “The outlook for the ratings is negative, reflecting the material uncertainty about the firm’s strategy and the … likelihood of further adverse developments in its insurance portfolios or operations.â€
MBIA has recorded heavy losses largely due to its exposure to the weak housing market and a troubled market for subprime mortgages to riskier borrowers.
For its part, MBIA said yesterday that it was “disappointed†by Moody’s decision, saying it was “baffled†by the ratings agency’s analysis.
“We believe the fundamentals of the company support a higher rating,†MBIA said.
MBIA shares ended the week’s trading down 86 cents to $5.59 each. The stock has fallen more than 91 percent in the last year.
This entry was posted
on Friday, June 20th, 2008 at 3:45 pm by David Schepp.
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