Fitch Rating Service said there will be no change in the rating of MBIA Insurance Corp. or MBIA Inc. after MBIA announced Friday that it received a "Wells Notice" from the Securities & Exchange Commission.
The "triple-A" financial strength rating of MBIA Insurance and "double-A" long-term debt rating of MBIA Inc. remained unchanged, Fitch in New York said. The rating outlook remains stable, Fitch added.
On Friday, MBIA said the Wells Notice concerned the retroactive reinsurance of losses incurred from the Allegheny Health, Education and Research Foundation (AHERF) bonds MBIA guaranteed and entered into excess of loss agreements and quota share agreements with three separate counterparts.
MBIA said while the Wells Notice is an indication the staff of the SEC is considering a civil injunction, "the company is engaged in discussions with the staff concerning the possible resolution of these charges."
MBIA also acknowledged that the company is in discussions with the New York state attorney general and insurance department over possible civil charges regarding the matter.
As long as the SEC and New York state resolutions do not exceed the excess capital position of MBIA, the ratings would remain unaffected, Fitch said.
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