# MBIA > Mediated Wiki article. Canonical URL: https://mediated.wiki/source/MBIA > Markdown URL: https://mediated.wiki/source/MBIA.md > Source: https://en.wikipedia.org/wiki/MBIA > Source revision: 1336329228 > License: Creative Commons Attribution-ShareAlike 4.0 International (https://creativecommons.org/licenses/by-sa/4.0/) {{Short description|American financial services company}} {{for multi|the Cameroonian footballer|Stéphane Mbia|other uses|Mbiá (disambiguation)}} {{Infobox company | name = MBIA Inc. | logo = | type = [Public company](/source/Public_company) | traded_as = {{ubl|{{NYSE|MBI}}|[Russell 2000](/source/Russell_2000) component}} | foundation = | location = {{nowrap|[Purchase, New York](/source/Purchase%2C_New_York), U.S.}} | key_people = | industry = [Finance](/source/Finance) | products = | revenue = {{nowrap|{{decrease}} {{US$|154 million|link=yes}} (2022)}} | operating_income = {{nowrap|{{increase}} {{US$|−148}} million (2022)}} | net_income = {{nowrap|{{increase}} {{US$|−195}} million (2022)}} | assets = {{decrease}} {{US$|3.38 billion}} (2022) | equity = {{decrease}} {{US$|−876 million}} (2022) | num_employees = 75 (2022) | parent = | subsid = MBIA Insurance
MBIA Capital | website = {{url|mbia.com}} | footnotes = {{cite web |url=https://www.sec.gov/ix?doc=/Archives/edgar/data/814585/000119312523054064/d387374d10k.htm |title=MBIA Inc. 2022 Annual Report (Form 10-K) |date=February 28, 2022 |publisher=[U.S. Securities and Exchange Commission](/source/U.S._Securities_and_Exchange_Commission)}}{{Cite web|url=https://www.sec.gov/Archives/edgar/data/814585/000119312504039476/dex21.htm|title = Subsidiaries of MBIA Inc}} }} '''MBIA Inc.''' is an American financial services company. It was founded in 1973 as the '''Municipal Bond Insurance Association'''. It is headquartered in [Purchase, New York](/source/Purchase%2C_New_York), and as of January 1, 2015 had approximately 180 employees.{{cite web | url=http://investor.mbia.com/file.aspx?iid=103405&fid=1001196298|title=MBIA 2014 Annual Report}} MBIA is the largest [bond insurer](/source/bond_insurance). {{cite news |url=https://www.sfgate.com/business/article/Kathleen-Pender-Municipal-bonds-hit-by-mortgage-3299735.php |title=Municipal bonds hit by mortgage fallout |author=Kathleen Pender |date=2007-12-20 | work=The San Francisco Chronicle }}[http://www.mbia.com/investor/history.html History] {{webarchive|url=https://web.archive.org/web/20100422211445/http://www.mbia.com/investor/history.html |date=2010-04-22 }}, MBIA website, accessed 2010 4 15 ==Functions of the company== MBIA is a [monoline insurer](/source/Monoline_insurance) primarily of [municipal bonds](/source/municipal_bonds) and on asset-backed securities and [mortgage-backed securities](/source/Mortgage-backed_security). Financial insurance or Financial Guarantees are a form of [credit enhancement](/source/credit_enhancement). It also provides a [fixed-income](/source/fixed-income) [asset management](/source/asset_management) service with about US$40 billion under management. ==History== A consortium of insurance companies ([Aetna](/source/Aetna), [Fireman's Fund](/source/Fireman's_Fund_Insurance_Company), [Travelers](/source/The_Travelers_Companies), [Cigna](/source/Cigna), and [Continental](/source/CNA_Financial)) formed the Municipal Bond Insurance Association in 1973 to diversify their holdings in municipal bonds. The company went public in 1987. In 2002, [Bill Ackman](/source/Bill_Ackman), a hedge fund manager, began research which concentrated on challenging MBIA's AAA rating, despite an ongoing probe of his trading by [New York State](/source/New_York_(state)) and federal authorities. He was charged copying fees for copying 725,000 pages of statements regarding the financial services company, in his law firm's compliance with a subpoena.{{cite news|url=https://www.bloomberg.com/apps/news?pid=20601109&sid=a7.NpGwa19TY&refer=home|title= Ackman Devoured 140,000 Pages Challenging MBIA Rating|first=Christine|last=Richard|author2=Katherine Burton |work=[Bloomberg](/source/Bloomberg_L.P.)|date=January 31, 2008|accessdate=February 22, 2008}} Ackman has called for a division between MBIA's bond insurers' structured finance business and their municipal [bond insurance](/source/bond_insurance) side, despite statements from the insurance companies that this would not be a viable option.{{cite news|url=https://money.cnn.com/2008/02/20/news/companies/mbia.ap/index.htm?postversion=2008022018 |title=MBIA: Call to divide not viable |work=[CNN](/source/CNN) |date=February 20, 2008 |accessdate=February 26, 2008 |url-status=dead |archiveurl=https://web.archive.org/web/20080227124826/http://money.cnn.com/2008/02/20/news/companies/mbia.ap/index.htm?postversion=2008022018 |archivedate=February 27, 2008 }} He argued that the billions of dollars of [credit default swap (CDS)](/source/credit_default_swap) protection MBIA had sold against various mortgage backed [CDO](/source/Collateralized_debt_obligation)s was going to be a problem. He also argued that it was not proper for MBIA, which was legally restricted from trading in CDS, to instead do it through a second corporation, LaCrosse Financial Products, which MBIA described as an "orphaned subsidiary". Ackman bought CDS against MBIA corporate debt as a way to bet that it would crash. When MBIA did, in fact, crash as the [2008 financial crisis](/source/2008_financial_crisis) climaxed, he sold the swaps for a large profit. Ackman reportedly attempted to warn regulators, rating agencies and investors about the bond insurers' high risk business models. The story of Ackman's battle with MBIA was turned into a book called ''Confidence Game'' (Wiley, 2010) by Bloomberg News reporter Christine Richard.[http://confidencegame.net ''Confidence Game'' by Christine S Richard, Bloomberg News, 2010] He reported covering his short position on MBIA on January 16, 2009 according to the 13D filed with the [SEC](/source/U.S._Securities_and_Exchange_Commission).http://www.marketfolly.com/2009/01/bill-ackmans-pershing-square-files-13d.html Bill Ackman's Pershing Square Files 13D on Borders, Covers MBIA Short In January 2017, MBIA [UK](/source/United_Kingdom) was acquired by Assured Guaranty Ltd together with its subsidiary Assured Guaranty Corp.{{Cite news|url=https://finance.yahoo.com/news/assured-guaranty-corp-completes-acquisition-223300147.html|title=Assured Guaranty Corp. Completes Acquisition of MBIA UK Insurance Limited|access-date=2017-09-28|language=en-US}} == Credit rating history == * April 4, 2008. [Fitch Ratings](/source/Fitch_Ratings) cut MBIA's Insurance Corp rating to AA from AAA with a negative outlook.{{cite news |url=http://bloomberg.com/apps/news?pid=20601087&sid=a0KG6bCua6os |title=MBIA Loses AAA Insurer Rating From Fitch Over Capital |author=Richard, Christine S. |publisher=Bloomberg.com |date = April 4, 2008 }} Fitch issued the new, lower rating even though MBIA had asked the ratings company, the month before, to stop assessing its credit worthiness. * June 4, 2008. [Moody's Investors Service](/source/Moody's) announced that it would review MBIA's rating for possible downgrade for the second time in the year.{{cite news| url=https://www.reuters.com/article/hotStocksNews/idUSN0425833920080604 | title=Moody's says will likely cut MBIA, Ambac ratings | date=June 4, 2008 | work=[Reuters](/source/Reuters)}} Four months before this announcement, in February 2008, Moody's had affirmed the AAA rating after MBIA raised $2.6 bn in capital and announced that would stop insuring structured finance securities for six months. * June 6, 2008. Despite having affirmed MBIA's AAA rating in February 2008, [Standard and Poor's](/source/Standard_and_Poor's) decided to downgrade MBIA's Insurance Financial Strength (IFS) rating from AAA to AA.{{cite news| url=https://www.reuters.com/article/marketsNews/idUSN0519442220080605 | title=S&P cuts top ratings for MBIA, Ambac bond insurers | date=June 5, 2008 | work=Reuters}} * June 19, 2008. Moody's downgraded MBIA's credit rating 5 notches to A2. {{cite news |url= http://www.marketwatch.com/story/moodys-downgrades-aaa-rating-of-ambac-mbia |author=MarketWatch |author-link=MarketWatch |title= Moody's downgrades Aaa rating of Ambac, MBIA |date = June 19, 2008 |publisher= Dow Jones }} * November 7, 2008. Moody's further downgraded the IFS rating to "Baa1" from "A2".{{Cite news |author= Brettell, Karen |editor= Grebler, Dan |title= Moody's cuts MBIA Insurance to "Baa1" |url= https://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN0737320320081107 |publisher= Reuters |date= November 7, 2008 |accessdate= November 2, 2010}} * June 25, 2009. Moody's downgraded MBIA from "Ba3" to "Ba1" which is a speculative grade.[http://www.minicentralesdos.com/Hechos%20Relevantes/S&P%20rating%20MBIA%2025%20Jun%2009.pdf "Rating Action: MBIA Insurance"], ''Moody's Investor Service'', 25 June 2009. * March 5, 2010. Moody's referred to MBIA's IFS rating as "B3".[http://www.mbia.com/investor/ratings/Moodys_030510.pdf "Moody's comments on MBIA's fourth quarter earnings and ongoing litigations"] {{webarchive|url=https://web.archive.org/web/20110714055702/http://www.mbia.com/investor/ratings/Moodys_030510.pdf |date=2011-07-14 }}, ''Moody's Investor Service'', March 5, 2010Cf. also later cited in Smith, Dick P., December 29, 2010, pp.13-14, inter alia. * November 19, 2012. Moody's downgraded MBIA Inc. from "B3" to "Caa1".{{Cite web|url=https://www.moodys.com/research/Moodys-downgrades-MBIA-Insurance-Corporation-to-Caa2-and-MBIA-Inc--PR_260358|title=Rating Action: Moody's downgrades MBIA Insurance Corporation to Caa2 and MBIA Inc. to Caa1|date=2012-11-19|website=[Moody's Investors Service](/source/Moody's_Investors_Service)|access-date=2017-11-27}} * May 21, 2013. Moody's upgraded MBIA Inc. from "Caa1" to "B3".{{Cite web|url=https://www.moodys.com/research/Moodys-upgrades-the-MBIA-group-National-Public-Finance-at-Baa1--PR_273722|title=Rating Action: Moody's upgrades the MBIA group; National Public Finance at Baa1 and MBIA Corp. at B3|date=2013-05-21|website=[Moody's Investors Service](/source/Moody's_Investors_Service)|access-date=2017-11-27}} * May 21, 2014. Moody's upgraded MBIA Inc. from "Ba3" to "Ba1".{{Cite web|url=https://www.moodys.com/research/Moodys-upgrades-the-ratings-of-MBIA-group-National-Public-Finance--PR_299814|title=Rating Action: Moody's upgrades the ratings of MBIA group: National Public Finance Guarantee to A3|date=2014-05-21|website=[Moody's Investors Service](/source/Moody's_Investors_Service)|access-date=2017-11-27}} ==References== {{Reflist}} * Smith, Dick P., [http://www.mbia.com/investor/ratings/StandardandPoorsReport_122910.pdf "MBIA Inc. and MBIA Insurance Corp."], ''[Standard & Poor's](/source/Standard_%26_Poor's)'', Global Credit Portal : Ratings Direct, December 29, 2010 == Further reading == * Barr, Alistair, [http://www.marketwatch.com/story/assured-guaranty-mbia-drop-on-rating-concern-2011-01-25 "Assured Guaranty, MBIA drop on rating concern : Standard & Poor’s proposes new ratings criteria for bond insurers"], ''MarketWatch'', January 25, 2011 * Richard, Christine S., [https://books.google.com/books?id=j5k85nhJQ5wC ''Confidence game : how a hedge fund manager called Wall Street’s bluff''], Hoboken, N.J. : Wiley/John Wiley & Sons, Inc., 2010. {{ISBN|978-0-470-64827-8}} ==External links== *[http://www.mbia.com Company website] {{Authority control}} Category:Companies listed on the New York Stock Exchange Category:Insurance companies of the United States Category:Companies based in New York City Category:Financial services companies established in 1973 Category:1973 establishments in New York (state) Category:Financial services companies based in New York (state) Category:American companies established in 1973 --- Adapted from the Wikipedia article [MBIA](https://en.wikipedia.org/wiki/MBIA) by Wikipedia contributors ([contributor history](https://en.wikipedia.org/wiki/MBIA?action=history)). 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