The chief executive of MBIA has written to reassure investors that there is little probability of the firm going into default despite its request that Fitch Ratings no longer rate the firm's financial strength.

Jay Brown, chairman and chief executive officer of the Armonk, N.Y.-based bond insurer, wrote his letter to investors on Sunday. On Friday, MBIA had written Fitch asking it to drop the rating. That letter criticized Fitch's rating methodology and fees.

In the wake of the letter to Fitch, MBIA on Friday, after the markets closed, released a statement announcing that it requested immediate withdrawal from Fitch rating its insurer financial strength while continuing the rating of outstanding debt obligations.

MBIA said that Fitch's coverage of insurance financial strength is limited and raises "the risk of misinterpretation." It went on to say that as it works through its five-year re-organization plan it hopes to find new opportunities to work with Fitch in the future.

Fitch in New York responded saying it was "disappointed and surprised" by the insurer's move. The rating service took exception to criticism MBIA leveled at the firm's method of analysis and fees.

"Fitch believes that our analysis is of the highest quality and our understanding of MBIA's municipal and structures exposure is very strong," said Stephen Joynt, president and CEO of Fitch Ratings, in a statement.

Fitch released the letter it received from MBIA requesting the service to quit its IFS rating.

MBIA criticized Fitch for examining only 20 percent of the company's insured structured finance transactions while Moody's and Standard & Poor's examine 85 percent in making their IFS rating.

The Fitch analysis leads to "inappropriate capital requirements for our company." The letter went on to say that because Fitch does not do "the fundamental credit analysis" that "it is virtually impossible for us to understand why your approach generates charges inconsistent with the market and other agency models."

It also called Fitch's assumptions for model finances risk "inconsistent" and added that its model for financial guarantee insurance companies puts a burden on capital planning and pricing.

For these reasons, MBIA said it could not justify the cost of dealing with Fitch, adding that rates grew three times above what they were in 2005, "a rate of growth well in excess of similar fees charged by other major rating agencies."

In his Sunday letter to investors, Mr. Brown, while remaining critical of the rating agency's methods in analyzing insurers, also made conciliatory comments about Fitch. The letter said Fitch's work is "totally on par with the others and, in some sectors, is best of breed."

Outlining why the company would remain solvent, he said if the insurer were to somehow default under contracts, amounting to $80 million in payments, the company would still have more than $500 million in cash on hand without considering other sources of revenue. He said such a default event "is highly improbable over the next year."

He also questioned the motivation of some analysts and investors involved in this line of trading, saying that "given the amount of money that can be made here, people will go to no ends insisting the company be broke in weeks."

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CEO Of MBIA: Default Speculation &quot;Highly Improbable&quot;

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