Warburg Pincus LLC, the largest holder of MBIA Inc.’s stock, will reduce its stake by more than half, according to a statement from the bond insurer on Monday.
MBIA said Warburg would sell 27.3 million shares in a registered public offering, leaving it with 18.4 million. MBIA’s National Public Finance Guarantee Corp. will buy 8 million of those shares from underwriter BTIG LLC, according to the statement.
Warburg’s current stake of 47.5 million shares represents about 26 percent of MBIA’s stock, according to data compiled by Bloomberg. It’s more than three times the stake of the next-largest holder. The shares fell to $9.81 in regular trading on Monday. They were down 5.7 percent to $9.25 in activity after the New York Stock Exchange closed.
MBIA shares reached as high as $76.02 in January 2007, then plunged as low as $2.17 in March 2009 after the financial crisis stripped bond insurers of their AAA ratings. Warburg acquired 16.1 million shares in January 2008 as part of an investment to try to help the insurer maintain its top rating. The initial stake was purchased at $31 a share and the private-equity firm then bought about 24.7 million more in a public offering at $12.15.
The insurer’s shares peaked last year at $15.26, then declined to trade between about $8 and $10 in 2015 to reflect the financial crisis in Puerto Rico that could lead the government and public agencies to restructure their $72 billion in debt. MBIA’s National unit insures $4.54 billion face value of the territory’s debt.
Kevin Brown, a spokesman for MBIA, said the Purchase, New York-based company didn’t have additional comment on the sale beyond the statement.