he was doing a pump and dump on bloomberg just few minutes ago said the money could keep the triple A
MBIA official shareholder's equity(which understates the mark to market) is $3.6B with this 40% dillution it goes to $2.19B. two billion to support some $130b in CDOs. plus all the public finance non-tax payer supported. the irony is all these guys are buying the stock on the hopes of keeping the triple A. they should be careful what they wish for, a triple A company trading on the pink sheets aint gonna make shareholders rich
``The most significant fact is that they're raising the amount of capital from what they previously announced,'' Wilbur Ross, an investor in distressed companies, said in an interview with Bloomberg TV. ``I would be astonished if they hadn't consulted with the rating agencies before they made this announcement,' he said, adding that MBIA may retain its AAA.
if the offering is a disaster(not too likely since whitman has shown that brian hunter aint got nothing on him and might average down some more) warburg is forced to step in and buy the more senior preffered stock this will screw the common stock even more, yet I bet the stock will rally some three points on the news
Fed monitoring bond insurer impacts-Bernanke Wed Feb 6, 2008 5:57pm EST WASHINGTON, Feb 6 (Reuters) - Federal Reserve Chairman Ben Bernanke said in a letter released on Wednesday that the Fed is "closely monitoring" any potential economic and banking impacts that might be felt from problems with bond insurers. "Given the adverse effects that problems of financial guarantors can have on financial markets and the economy, we are closely monitoring developments," Bernanke said in the letter dated Feb. 4 to Rep. Paul Kanjorski, chairman of a House of Representatives subcommittee that oversees capital markets and the insurance industry. Kanjorski had sought input from a range of regulators as he considers possible reforms to oversight of bond insurers. The Pennsylvania Democrat said the responses to his request have convinced him there is a need for reform and he will hold a hearing on Feb. 14 to explore the issue. In his letter, Bernanke added: "In addition, we are closely monitoring the potential effect of downgrades of financial guarantors on bank holding companies, state member banks, and other institutions supervised by the Federal Reserve. "We believe we have the appropriate tools to assess exposures to bond insurers of the banks that we supervise." As fallout from the subprime mortgage crisis spreads, lawmakers and regulators have grown concerned about the credit ratings of Ambac Financial Group Inc (ABK.N: Quote, Profile, Research), MBIA Inc (MBI.N: Quote, Profile, Research), Financial Guaranty Insurance Co. and other bond insurers. In a memo also released by Kanjorski's office, a top official at the U.S. Securities and Exchange Commission said the largest Wall Street banks are "highly aware of and actively managing their exposures" to the bond insurance industry
I'm not so sure. I think they scrapped the $500m shareholders rights offering in exchange for this $750m common stock. the rating agencies were assuming the $500 m was coming in so the increase is just $250m, and they had to adjust the expected losses by some +$100m, the decrease in market to market losses shouldn't matter since the rating agencies dont think they are important
"This is good progress," New York State Insurance Superintendent Dinallo said in a statement on Wednesday after MBIA's announcement. "It's the kind of transaction we've been discussing and encouraging."
Buffet is interested in entering the sector but not in buying the existing palyers. A huge tell if he can be confirmed to have looked at them as potential purchases...............................................