MBIA unit denied approval to make surplus notes payment; no default

By Caroline Salls

Pittsburgh, Jan. 15 - MBIA Inc. said the New York State Department of Financial Services has denied a request by wholly owned subsidiary MBIA Insurance Corp. to make the Jan. 15 interest payment on its 14% fixed-to-floating-rate surplus notes due 2033, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

As a result, MBIA said the surplus notes payment will not be made. The fiscal agency agreement governing the notes only allows payment with the approval of the NYSDFS.

The payment does not become due without the department's approval, so MBIA Insurance is not required to make the Jan. 15 payment, and non-payment does not constitute an event of default.

The deferred interest payment will be due on the first business day after MBIA Insurance obtains approval to make the payment. No interest will accrue on the deferred interest, the 8-K said.

Armonk, N.Y.-based MBIA is a holding company whose subsidiaries provide financial guarantee insurance and related reinsurance, advisory and portfolio services for the public and structured finance markets as well as asset management advisory services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.