MBIA Loses AAA Insurer Rating From Fitch Over Capital (Update2) By Emma Moody
April 4 (Bloomberg) — Fitch Ratings cut MBIA Inc.’s insurance rating to AA from AAA, saying the bond insurer no longer has enough capital to warrant the top ranking.
MBIA, the world’s largest bond insurer, would need as much as $3.8 billion more in capital to deserve an AAA, New York- based Fitch said today in a report. The outlook is negative, Fitch said.
Fitch issued the new, lower rating even though Armonk, New York-based MBIA asked the ratings company last month to stop assessing its credit worthiness. The two companies disagree over how much capital MBIA needs to absorb losses on the bonds it insures.
“It will be difficult for MBIA to stabilize its credit trend until the company can more effectively limit the downside risk” from collateralized debt obligations, Fitch said in the report.
