Financial stocks were generally leaping high above the modest gains of the major indices on Monday as investors fervently awaited the Federal Reserve's Tuesday meeting, which is widely anticipated to result in another cut of the fed funds target rate.
Among the big individual winners was MBIA (MBI Quote), which leapt 11.3% to $33.39 after the financial guarantor said that private-equity firm Warburg Pincus had agreed to inject it with up to $1 billion in cash. Warburg will fulfill half of that maximum sum by purchasing 16.1 million MBIA shares at a 3% premium (as of MBIA's Friday closing price) of $31 apiece.
As for the rest of the amount, Warburg will support an expected first-quarter MBIA shareholder-rights offering of up to $500 million. In connection with that, Warburg will get warrants to buy 8.7 million MBIA shares at $40 apiece and B warrants exercisable for 7.4 million shares at that same price. ...
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