In MBIA's Own Words: Split Within 5 Years

From the Letter to Owners:

On a split:

One of the points we’ve made clear in our discussions is that we will only restructure on a timeframe and in a manner that allows us to carefully consider the needs of all of our stakeholders. First among all considerations is that we will protect the interests of all of our policyholders. That is why, as soon as it’s feasible but within a five-year period, we will restructure the company in such a way as to insure public and structured finance business from separate operating entities. We have already made the decision to cease ensuring new derivative credit contracts from our insurance companies. structured and public finance businesses, and I believe this can be accomplished by separating these two business lines and leaving the derivative market to the traders on Wall Street.

I have suspended the writing of all new structured finance business for approximately six months. Further, the flexibility and preservation of our capital remains a high priority for us. That is why today your board voted to eliminate the quarterly dividend, effective immediately.

On Ackman:

As the leading monoline, we are also a convenient and attractive target for self-interested parties such as Mr. William Ackman. Many of you have asked me in the past few days whether there is something personal between us. In actual fact we have many similarities. We are both extremely passionate in our beliefs and are persistent in overcoming all obstacles in terms of reaching our objectives. The real difference is that I am leading a regulated institution that provides security, jobs and peace of mind to tens of thousands of institutions and millions of individual investors. Mr. Ackman’s objective is less complex; he will stop at nothing to increase his already enormous personal profits as he systematically tries to destroy our franchise and our industry. His campaign against us has increased our cost of capital, but his intent to force a collapse has no chance to succeed.

More MtM writedowns coming:

The continuing uncertainty in the mortgage markets tells me that we can expect a bumpy ride over the coming months and possibly longer. I am truly thrilled to be back in the driver’s seat at MBIA, and I fully expect that together we’ll reach our goal of financial stability and long-term value in the years ahead.

Comments

[Kurtis]

Does Enron ring a bell? Both the chief executives sang the praises of their company's to the bitter end. Anyone who does their due diligence knows MBIA will not survive without a miracle. And short of some kind of divine intervention that's not likely. Even though it's currant share price is around $12 to $14, it will eventually assume it's rightful place as a penny stock. All I can say with MBIA is BUYER BEWARE!