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Article: MBIA hurt by competition, subprime issues
- Article from:
- Deseret News (Salt Lake City)
- Article date:
- July 13, 2008
- Author:
CopyrightCopyright 2008 Deseret News (Salt Lake City). Provided by ProQuest LLC. (Hide copyright information)
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Question: I am very concerned about my shares of MBIA Inc. What
are the prospects? -- V.R., via the Internet
Answer: The world's largest bond insurer has taken charges on
billions of dollars of exposure to bonds tied to subprime mortgages
and derivatives.
It also faces new competition for bond insurance from Berkshire
Hathaway Assurance, which has a stronger balance sheet.
It suffered a blow when Moody's Investors Service dropped MBIA's
longtime AAA rating by five notches. Moody's also gave it a negative
outlook based on limited financial flexibility and weakened
businesses. Standard & Poor's Corp. and Fitch Ratings had reduced
their ratings for MBIA by two notches.
MBIA insurance provides ...