Updated from 12:49 p.m. EST
Bond insurer MBIA's(MBI Quote) shares plunged anew Thursday, after its bombshell revelation of its significant exposure to the riskiest asset-backed paper.
The financial guarantor's shares dove more than 30% in early trading after the firm announced that it guarantees $8.1 billion of structured products called CDOs-squared, among some $30.6 billion in total exposure to CDOs, or collateralized debt obligations. That means MBIA guarantees payment on CDOs that package up other CDOs. Many are filled with subprime or other mortgage-backed debt, which has been subject to downgrades, deterioration in value and default of late.
The revelation sparked a warning from Fitch Ratings, a day after a similar action by Standard & Poor's, which could ultimately force the firm to scramble for yet more capital. MBIA received a $1 billion cash injection from private equity firm Warburg Pincus last week. ...
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