MBIA Inc. (NYSE:MBI) – Losing Stock Prices over Fed Indication of Quantitative Easing and Tapering Refinance Index – MTG, RDN


Dallas, Texas 09/12/2013 (Financialstrend) – MBIA Inc. (NYSE:MBI) a financial service company along with its subsidiaries offers financial guarantee insurance and asset management advisory services in the United States and globally. The company is an insurer primarily of municipal bonds and on asset backed securities and mortgage backed securities. The company also provides fixed income asset management service which is primarily operated by its Cutwater Holdings, LLC and its subsidiaries. Today three companies of MBIA trade under the same corporate name of MBI. The three companies are MBIA Inc., National Public Finance Guarantee Corp., and Cutwater Asset Management.

The mortgage insurers are witnessing downtrend following the lower demand for new homes or refinancing existing debt. The refinance index slipped 28% alongside seasonally adjusted purchase index which dipped over 2.7%. More importantly, the Mortgage Bankers Association (MBA) fell 23% last week that is 13.5% on a seasonally-adjusted basis. The indication to taper the Quantitative Easing measures by Fed would significantly impact mortgage insurers – because the plans to hike key rates would undoubtedly make borrowing a costly affair.

The mortgage insures which get the likely blow besides MBI include MGIC Investment (NYSE: MTG), Assured Guaranty (NYSE: AGO), Old Republic International (NYSE: ORI), Radian Group (NYSE: RDN) along the others. Given the scenario many experts are eyeing to a FOMC meeting next week.

The stock of MBI closed at $11.52 (-2.87%) on Wednesday, September 11, 2013 and at this price it is trading around 28% below its 52-week high of $16.15. A total of 6.59 million shares were traded, which is almost 2.75 times the daily average volume of 2.40 million. MBI’s shares have declined by 8.13% in the last five trading sessions, underperforming the S&P 500 which has gained 3.44% during the same period.

The New Beginning

With receding pending trials, tribulations and losses on its RMBC portfolio, continuity of revenues from policies it wrote before the recession and restructuring of its assets could certainly put MBI on a path to write new business.