Beleaguered bond insurer MBIA ( MBI) posted a net loss of $2.3 billion in its fourth-quarter, according to its earnings report on Thursday. The Armonk, N.Y.-based bond insurer has been under pressure from rating agencies to increase its capital reserves to ensure that it has sufficient means to backstop potential losses on the debt that it insures, or be stripped of its vaunted triple-A rating. Thursday's results did not exactly present a bullish case for why it is worthy of the stamp. MBIA's net loss equates to a loss of $18.61 a share, compared with a net income of $181 million, or $1.32 a share during the same period last year. MBIA also estimates that it will take a credit impairment of $200 million included in the pre-tax net loss of $2.3 billion on its insured credit derivatives portfolio on three so-called collateralized debt obligations squared, where it is forecasting actual losses. CEO Gary Dunton described the results as "disappointing" and attributed the earnings hit on the performance of its insured prime, second-lien mortgage portfolio and its CDO-squared transactions. Still, the chief executive maintains that capital infusions that have come by way of private equity shop Warburg Pincus and a predicted slowdown in activity will translate into the company having sufficient capital on hand to keep its triple-A rating. Dunton also noted that the first installment of the Warburg Pincus transaction closed last night,
as reported by TheStreet.com. "The effect of these reserving and impairment activities on our capital position will be more than offset by the successful completion of our capital plan, which will increase our capital position by well over $2 billion," Dunton said in a statement. "We have raised $1.5 billion to date through our $1 billion surplus notes offering and the Warburg Pincus' $500 million investment in MBIA common stock, which closed Wednesday ." MBIA, along with the rest of the monoline insurance sector, has seen its stock price hammered over the past several weeks as it scrambles to raise cash amid a mortgage meltdown affecting some of the highest-rated products that the firms insure. Over the past several days, insurers including Ambac Financial ( ABK) and Financial Guaranty Insurance Co. were stripped of their triple-A ratings and now stand as double-A rated entities in the eyes of Fitch Ratings. Standard & Poor's and Moody's Investors Service have yet to chime in with their own rating downgrade, although many fear such moves are imminent. The imperiled insurers have gotten the attention of activist investor Bill Ackman, a longtime critic of the industry, and government officials, who fear the sector's fall could spell trouble for the municipal bond market. New York Insurance Superintendent Eric Dinallo has been talking to banks and other investors in an effort to arrange a plan that might offer solutions to the ailing guarantors by providing much-needed capital. Meanwhile, Ackman, who heads hedge fund Pershing Square Capital, on Wednesday issued a 20-page letter arguing that guarantors such as MBIA are underestimating actual losses on their books. He estimates that Ambac and MBIA each need about $12 billion to right themselves. Ackman, who is short monoline insurers Ambac and MBIA, has been a critic of MBIA in particular for the past decade and looks to line his pockets with billions via bets he has made that the monolines will go belly up -- a scenario which seems unlikely, since the firms can exist in runoff, in which a guarantor takes payments on its existing book of business and underwrites no new policies. MBIA shares were shedding 14.9 to $11.88 in Thursday morning trading.