MBIA Completes Bond Changes to Protect It From Toxic Subsidiary
MBIA Inc. (MBI) said a majority of investors holding almost $900 million of bonds approved changes to terms governing the debt that will allow the company to shield itself from being dragged into bankruptcy by a cash- strapped unit.
Bondholders approved changes to indentures that accelerate payments under a cross-default provision, replacing its MBIA Insurance Corp. with the more stable National Public Finance Corp. The Armonk, New York-based insurer said it repurchased about $170 million of 5.7 percent bonds due in December 2034 that Bank of America Corp. (BAC) had offered to buy from bondholders in an effort to block the changes.
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