Summary of MBIA INC - Yahoo! Finance

Item 8.01. OTHER EVENTS.

The following information is being filed pursuant to Item 8.01 - Other Events of Form 8-K.

On June 5, 2009 National issued a press release commenting on the announcement on June 5, 2009 by Standard & Poor's Rating Services ("S&P") that it had lowered its counterparty credit, financial strength, and financial enhancement ratings on National to "A" from "AA-" and removed them from CreditWatch with developing implications. The outlook for National is developing. At the same time, S&P lowered its counterparty credit, financial strength, and financial enhancement ratings on MBIA Insurance Corporation ("MBIA Corp.") to "BBB" from "BBB+" and S&P also lowered its counterparty credit rating on MBIA Inc. to "BB" from "BB+," both with negative outlook. In addition, S&P lowered its counterparty credit and financial strength ratings on Municipal Bond Insurance Association to "A" from "AA-" and removed them from CreditWatch developing, with developing outlook, mirroring the action taken on National.

S&P noted that the downgrade of National reflects its view of both "its uncertain business and capital-raising prospects." In addition, S&P cited the following factors in its downgrade decision: "The company's capital adequacy is marginally below our 'AA' standard. Management's stated goals are to raise additional capital to bolster National's current resources and effectively ring-fence National from MBIA [Corp.] and its more volatile book of business. However, the ring-fencing actions it has taken so far have had limited impact in that we view National as no more or less ring-fenced than any typical bond insurance subsidiary operating in a consolidated group. In addition, the legal challenges the company faces as a result of its restructuring are, in our opinion, an impediment to both business prospects and capital-raising efforts."

S&P noted that it downgraded MBIA Corp. "because of increased loss assumptions on its 2005-2007 vintage direct RMBS and CDO of ABS and a change in the assumed tax benefit of tax-loss carryforwards. It is our view, based on its tax share filing status, that MBIA Inc. will not be able to fully realize the tax benefit of MBIA [Corp.]'s operating losses."

In addition, S&P stated that it believes "that there is strong incentive for MBIA [Corp.] to maintain an orderly runoff of its legacy book of business so as not to damage the franchise value of National. To this end, from a risk-management perspective, management has indicated that it will retain sufficient experienced staff to support surveillance and remediation efforts."

S&P also noted that "the outlook on National is developing" and that S&P "could raise the rating if there is a favorable resolution of the current litigation, which in turn could facilitate capital-raising efforts and lead to more tangible separation of National from MBIA [Corp.] and MBIA Inc." S&P further stated that "improving business acceptance could be an outgrowth of these developments, which could lead to a rating in the 'AA' category. Alternatively, an ongoing lack of market acceptance and continued weak financial flexibility could result in a downgrade to the 'BBB' category."

S&P noted that the negative outlook on MBIA Corp. reflects its view "that adverse loss development on the structured finance book could continue. A revision of the outlook to stable will depend on, among other factors, greater certainty of ultimate potential losses as well as the orderly runoff of the book of business."

S&P noted that lists of the ratings that have changed as a result of these actions will be posted in the coming days at www.standardandpoors.com/Ratings/Bond Insurance and that ratings information is also available on RatingsDirect (www.ratingsdirect.com). S&P stated that its analysis of the impact of these ratings actions is ongoing and that it will post any additional rating changes at the same locations.

Below is the list of ratings actions included in S&P's press release:

"Downgraded; CreditWatch/Outlook Action
                                        To              From
National Public Finance Guarantee Corp
Municipal Bond Insurance Assn.
Counterparty Credit Rating
Local Currency                          A/Developing/-- AA-/Watch Dev/--
Financial Strength Rating
Local Currency                          A/Developing/-- AA-/Watch Dev/--

National Public Finance Guarantee Corp
Financial Enhancement Rating
Local Currency                          A/--            AA-/Watch Dev/--

Downgraded
                                        To              From
Capital Markets Assurance Corp.
Counterparty Credit Rating
Local Currency                          BBB/Negative/-- BBB+/Negative/--
Financial Strength Rating
Local Currency                          BBB/Negative/-- BBB+/Negative/--

MBIA Insurance Corp.
Counterparty Credit Rating
Local Currency                          BBB/Negative/-- BBB+/Negative/--
Financial Strength Rating
Local Currency                          BBB/Negative/-- BBB+/Negative/--
Financial Enhancement Rating
Local Currency                          BBB/--/--       BBB+/--/--
Senior Unsecured                        BB+             BBB-
Preferred Stock                         BB              BB+


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MBIA Assurance S.A.
Counterparty Credit Rating
Local Currency               BBB/Negative/-- BBB+/Negative/--
Financial Strength Rating
Local Currency               BBB/Negative/-- BBB+/Negative/--
Financial Enhancement Rating
Local Currency               BBB/--/--       BBB+/--/--

MBIA U.K. Insurance Ltd.
Financial Strength Rating
Local Currency               BBB/Negative/-- BBB+/Negative/--
Financial Enhancement Rating
Local Currency               BBB/--/--       BBB+/--/--

MBIA Inc.
Counterparty Credit Rating
Local Currency               BB/Negative/--  BB+/Negative/--
Senior Unsecured             BB              BB+

MBIA Global Funding LLC
Senior Secured               BBB             BBB+
Senior Unsecured             BBB             BBB+"