MBIA slashes dividend by more than half
Bond insurer says move will save the company $80 million annually, warns of bigger-than-expected quarterly loss.
NEW YORK (CNNMoney.com) -- MBIA Inc. slashed its dividend by more than half Wednesday as part of a larger plan by the troubled bond insurer to raise capital and maintain its lofty credit rating.
The Armonk, NY-based company said it would cut its quarterly dividend by 62 percent, lowering it to 13 cents a share from 34 cents a share.
MBIA said the move would save the company approximately $80 million annually and it expected it to help the company maintain its Triple-A credit rating.
"We are committed to the successful implementation of this comprehensive plan to significantly strengthen our capital position and secure our Triple-A ratings without qualification," MBIA Chairman and CEO Gary Dunton said in a statement.
The company also warned that it expects to post a $737 million loss for the fourth quarter when it reports its results Jan 31. Analysts polled by Thomson Financial were anticipating the company would post a net loss of $182 million.
But Wall Street was encouraged by the news. MBIA (MBI) shares gained more than 11 percent in pre-market trading after the announcement.