Bond insurer MBIA was hit today with an announcement from Fitch Ratings that it has placed the firm on rating watch negative, and could downgrade the insurer if it doesn't get more financing in place.

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

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

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