By Laura Lutz
Des Moines, Dec. 10 - MBIA Inc. arranged a $502 million private placement of stock, according to a news release.
Under the agreement, Warburg will buy about 16.1 million shares at $31.00 apiece for a total investment of $500 million. The company's senior management will buy $2 million of stock at the same price.
The stock price is a 3.33% premium to the closing price of MBIA's stock on Friday.
Warburg has also agreed to backstop a $500 million shareholder rights offering that MBIA plans to conduct during the first quarter of 2008.
In connection with both deals, Warburg will receive seven-year warrants for 8.7 million shares at $40.00 per share and B warrants for 7.4 million shares. Upon approvals, the B warrants will also be exercisable at $40.00 per share for seven years.
MBIA is a financial company based in Armonk, N.Y.
| Issuer: | MBIA Inc.
|
| Issue: | Stock
|
| Amount: | $502 million
|
| Price: | $31.00
|
| Warrants: | For 16.1 million shares
|
| Warrant expiration: | Seven years
|
| Warrant strike price: | $40.00
|
| Investor: | Warburg Pincus (for $500 million)
|
| Announcement date: | Dec. 10
|
| Stock symbol: | NYSE: MBI
|
| Stock price: | $30.00 at close Dec. 7
|
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