After announcing earlier this week that it would raise $750 million in a common stock offering, as part of an attempt to build capital and protect its AAA rating, monoline insurer MBIA Inc. said late Thursday that it had bumped up its offer to $1 billion and priced the offering at $12.15 per share. According to a press statement, private equity investor Warburg Pincus will purchase $300 million in common stock as part of the offering; MBIA also said the offering was oversubscribed, meaning that the private equity firm’s ‘backstop’ — it’s offer to purchase any outstanding shares not purchased by other investors — will likely not be needed. Warburg Pincus has already invested $500 million into the ailing bond insurer. MBIA has been scrambling to build a capital base as the rating agencies have begun downgrading some monoline bond insurers and warning on others, over concerns that exposure to mortgage-related bonds, including CDOs, will strain the capital resources of most insurers. Moody’s Investors Service was the latest to downgrade an insurer, hacking the ratings of former AAA-rated XL Capital Insurance down six notches. With the current common stock offer, MBIA will have raised $2.5 billion since November of last year. For more information, visit http://www.mbia.com.
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