NEW YORK (TheStreet) -- MBIA (MBI) shares are down 18.84% to $5.17 in morning trading on Tuesday, continuing to suffer the fallout from Puerto Rico's admission that it will not be able to pay off its $72 billion in debt.
Puerto Rico Governor Alejandro Garcia Padilla told the New York Times Friday that the country was unable to pay off its debts and as of March 31 MBIA held about $4.5 billion of par exposure to the U.S. territory, according to Bloomberg.
Yesterday a newly appointed adviser to the territory, who also was the judge that oversaw Detroit's bankruptcy proceedings, said that the island was insolvent and would soon run out of cash, according to Reuters.
"It can no longer pay its debts, it will soon run out of cash to operate, its residents and businesses will suffer," said retired U.S. Bankruptcy Court judge Steven Rhodes.
TheStreet Ratings team rates MBIA INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MBIA INC (MBI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself."