Without the Fed and its emergency measures, MBIA would have been toast long ago.
There are almost certain to be billion-dollar settlements from lawsuits by MBIA Inc.
In 2007, 47% of municipal bonds were insured, with MBIA taking 22% of the market.
It cut the other portion of MBIA's business to "B-three, " which is junk status.
Because of default on two of seven deals, MBIA had to pay tens of millions of dollars.
He and his firm are the guys representing MBIA in all their cases against Countrywide and Merrill Lynch.
Standard and Poor's affirmed the financial strength of MBIA and Ambac shortly before the market closed on Monday.
Moody's Investors Service said it is considering raising the ratings on MBIA's public finance operation, but sees risks.
In spite of this, municipal bond insurers such as Ambac Financial (ABK) and MBIA (MBI) are somehow still solvent.
In the MBIA case, the judge has ruled that the suit can proceed even though BAC has denied responsibility.
If MBIA wins a ruling declaring BofA liable for Countrywide loans, that settlement could be rejected as too low.
The firm also represents MBIA in its big lawsuit against Bank of America.
Fitch Ratings, which affirmed MBIA's triple-A rating on Wednesday, is still reviewing Ambac.
Shares of Ambac swooned 60% in trading Thursday, and rival MBIA fell 40%.
The two biggest companies in the bond insurance business are MBIA (30, MBI) and Ambac Financial Group (22, ABK) .
Back then, Joseph Brown , MBIA's chief executive, said he was moving the capital to quiet the company's critics.
Not long after Brown took the helm, in 2008, MBIA sued BofA and gained access to the Countrywide loan files.
In mortgages, Morgan Stanley has a thorn in its side as MBIA recently announced a lawsuit on its mortgage portfolio.
Speculation was that it was MBIA (nyse: MBE - news - people ) that rejected the offer.
In a sign investors took the ruling seriously, MBIA shares rose 18% today, almost twice as much as Assured Guaranty.
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By pushing forward the insurance case, BoA is applying leverage to MBIA to settle the mortgage litigation on more favorable terms.
Empty cubicles with Aeron chairs and elegant brass desk lamps fill the brown granite headquarters of MBIA in Armonk, N.
While MBIA was removed from credit watch, Ambac was not and will continue to be carefully monitored for a possible downgrade.
The challenge for MBIA and other bond insurers will be to convince the public finance sector that insurance is still necessary.
BofA enters the picture this way: It issued the MBS that MBIA insured, and MBIA maintains that many were horribly shoddy issues.
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The report got him into hot water, but Ackman was eventually proven right as MBIA began to crumble amid the financial crisis.
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This legal impasse is something Brown never expected when he agreed to come back as chief executive of MBIA in February 2008.
And MBIA will no longer use credit derivatives to guarantee new transactions.
With several critical court rulings expected in the next few months, MBIA versus BofA is likely to come to a close this year.
Meanwhile, Ackman was making another big bet, this time against bond insurer MBIA, whose triple A rating he questioned in a research report.
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