MBIA’s credit rating cut by Moody’s
MBIA Inc., the Armonk-based bond insurer that suffered heavy losses stemming from the subprime mortgage crisis, had its credit rating lowered by Moody’s Investors Service.
MBIA’s rating was downgraded to Ba3 from Ba1, according to Moody’s. Both ratings are considered junk bond territory.
“These rating actions reflect further expected insured portfolio deterioration at MBIA Insurance Corp. and the uncertainty stemming from ongoing litigation challenging MBIAís recent restructuring,” Moodyís said in a written statement.
MBIA was hit hard last year, as the weakest housing market since the early 1970s resulted in large numbers of homebuyers defaulting or falling behind on their mortgage payments. As home foreclosures soared, MBIA took big write-downs on the mortgage bonds that it had insured.