Bond insurer MBIA was hit today with an announcement from FitchRatings that it has placed the firm on rating watch negative, andcould downgrade the insurer if it doesn't get more financing inplace.

Fitch said that after a review of the Armonk, N.Y.-basedinsurer's exposure to collateralized debt obligations (CDO) backedby subprime mortgage collateral, the rating service found the $30.6billion exposure falls below a “triple-A” rating by about $1billion.

During the next four-to-six weeks, MBIA must obtain additionalcapital commitments and/or obtain reinsurance or other riskmitigation measures to avoid losing its “triple-A” rating. If MBIAfails to get the capital or measures in place, Fitch said it wouldprobably knock down MBIA's rating one notch to “double-A-plus.”

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