Friday, February 01, 2008

It's only a paper moon

Mmm, mm, mm, mm
A bubble for a minute
Mmm, mm, mm, mm
You smile, the bubble has a rainbow in it

Say, its only a paper moon
Sailing over a cardboard sea
But it wouldn't be make-believe
If you believed in me

It's a Barnum and Bailey world
Just as phony as it can be
But it wouldn't be make-believe
If you believed in me

It's Only A Paper Moon

By Ellis Mnyandu NEW YORK, Jan 31 (Reuters) -
U.S. stocks rose in choppy
trade on Thursday as a rebound in bond insurers' shares spurred
buying in the financial sector after executives at a major bond
insurer offered reassurances about the company's outlook.
There is "reassurance from MBIA today that they have
sufficient capital to cover its needs," said Tom Sowanick,
chief investment strategist for Clearbrook Financial LLC in New
York. "Everybody was all over the CNBC report ... that there'd
be a major downgrade coming on the monolines and the market has
yet to see it."

Jan 20, 2008 NEW YORK, Jan 20 (Reuters) -
The stock of bond insurer MBIA Inc., which took a beating last week, now looks cheap, Barron's said on Sunday.

The stock, which closed down 7.3 percent at $8.55 on Friday, is trading much lower than a conservative liquidation value that some observers say is above $30 a share, Barron's said in its Jan. 21 edition.

11 Dec 2007 Warburg Pincus invests $1bn in MBIA
Warburg Pincus will initially plough $500m into MBIA by purchasing 16.1 million of the company’s shares at $31 each - a small premium to Friday’s closing price of $30. Warburg will then back a $500m rights issue which MBIA expects to complete early next year.

Warburg will have the right to nominate two board members, and will receive warrants to purchase additional MBIA shares at $40, allowing to it bolster its profit if the share price rises.

December 10, 2007 Press Release MBIA Increases Capital with $1 Billion Warburg Pincus Commitment

In connection with its investment and backstop commitment, Warburg will receive warrants to purchase 8.7 million shares of MBIA common stock at a price of $40 per share and "B" warrants, which, upon obtaining certain approvals, will become exercisable to purchase 7.4 million shares of common stock at a price of $40 per share. The term of the warrants is seven years.

The Company's senior management team has also committed to invest a total $2 million in the Company's common stock at the same price as Warburg.

As part of the agreement, MBIA's Board size will increase by two members to a new total of thirteen, with Warburg Pincus having the right to nominate two directors.

The Company believes that mark-to-market losses are not predictive of future claims, and that in the absence of claims, the cumulative marks will net to zero over the remaining life of the bonds insured. The Company has not paid losses on any of the marked transactions. The mark-to-market also does not affect rating agency evaluations of the Company's capital adequacy.

January 31, 2008 By KAREN RICHARDSON (WSJ)
Bond insurer MBIA Inc. said it has closed a deal with Warburg Pincus LLC in which the private-equity fund agreed to buy $500 million worth of the bond insurer's shares at $31 each.

MBIA shares were at $13.96, down $2.02, or 13% yesterday in 4 p.m. New York Stock Exchange composite trading.

The $500 million Warburg investment, which gives the firm 16.1 million warrants to buy MBIA common shares, is half of a previously announced $1 billion commitment.


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