Moody's Puts MBIA on Negative Watch; Insurer 'Surprised' By Move
Moody's Investors Service yesterday placed MBIA Insurance Corp. and its affiliates on review for a possible downgrade, leading the world's largest bond insurer to say Friday that it was surprised by the action. The moves comes just after Fitch Ratings affirmed MBIA's insurer ratings earlier this week. MBIA CEO Gary Dunton said in a press statement that the firm had developed a plan to strengthen capital "in good faith reliance on Moody's stated requirements." (Read about MBIA's capital strengthening plan here.) "We have been proactive in raising a substantial amount of new capital to support our Triple-A ratings," he said. "We believe our capital plan meets or exceeds the requirements previously outlined by Moody's and the other two major rating agencies." CFO Chuck Chaplin indicated that the insurer is committed to maintaining its AAA insurer rating. Moody's similarly placed Ambac Financial on review earlier in the week, which led the insurer to withdraw its plans to raise $1 billion in equity and shore up capital. Ambac subsequently saw its AAA insurer rating downgraded today by Fitch to AA, the first AAA bond insurer to ever have its rating downgraded.