Bond insurer MBIA Inc., in a restructuring move that has been in the works for a year, said it is creating a separate entity to handle municipal bond business.
The action splitting off that portion of the Armonk, N.Y.-based firm's business into a separate unit was given final approval by the New York Insurance Department yesterday.
In making its announcement, MBIA said it expects the transaction to provide “critical liquidity” to the municipal bond insurance market, which has had difficulty functioning after financial strength ratings for such firms dropped, making them unattractive as backers of municipal debt.
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