Money world

MBIA Inc (MBI.N: Quote, Profile, Research, Stock Buzz) said on Monday that after selling $4 billion of assets in the second quarter, it now has enough cash and collateral to meet the extra requirements triggered by its recent downgrades.

The announcement followed a Wall Street Journal report that said the bond insurer was raising cash through municipal bond sales last week to make billions of dollars in payments triggered by its rating downgrade by Moody’s Investors Service.

Because of the sales, MBIA said will record pre-tax net realized losses on its second-quarter income statement of approximately $300 million. But this should not have a material impact because the losses “did not differ substantially” from unrealized losses already taken, MBIA said in a press release.

MBIA shares had fallen as much as 13 percent on Monday, but pared those losses after the company announcement to trade down almost 9 percent at $3.81.

“Contrary to recent statements in the media, MBIA is not in a ‘tenuous situation,’” said C faxless payday loans. Edward Chaplin, chief financial officer, in a statement.

“The holders of our insurance policies, GICs (guaranteed investment contracts), medium-term notes and other debt instruments can rest assured that MBIA will meet its obligations to them as it always has — on time and in full,” the company said in a statement describing its latest actions.

MBIA and Ambac, both bond insurance industry giants, have lost their top ratings, mainly because of ill-timed and costly expansions into subprime mortgage securities.

The U.S. municipal market last week was pressured in part by MBIA’s sales of $400 million to $500 million of tax-free debt, and traders said on Monday they feared similar selling by Ambac Financial Group (ABK.N: Quote, Profile, Research, Stock Buzz). 

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