MBIA pulls the plug on its insurance arm

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In the wake of downgrades from AAA to AA status, MBIA has pulled support for its bond insurance subsidiary. In a letter to shareholders, CEO Jay Brown said:

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“We confirmed to the market today that we will not be making capital contributions to MBIA Insurance Corporation given the changes in ratings status last week, especially since that additional capital would not preserve its Triple-A ratings as it was originally intended.”

Read the full text of the letter at FT Alphaville.

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