Fitch: MBIA's Ratings Unchanged After Wells Notice Announcement.

NEW YORK -- The 'AAA' insurer financial strength (IFS) rating of MBIA Insurance Corp. and the 'AA' long-term debt rating of MBIA Inc. (collectively, MBIA) remain unchanged following MBIA's announcement that it has received a Wells Notice from the staff of the U.S. Securities and Exchange Commission (SEC). The Wells Notice relates to MBIA's use of certain loss mitigation products entered into in connection with losses on MBIA-insured bonds issued by Allegheny Health, Education and Research Foundation (AHERF). The Rating Outlook for MBIA is Stable.

In Fitch's view, the announcement confirms that the SEC's ongoing investigation, which commenced in November 2004, is progressing to a more formal stage beyond the gathering of information. The Wells Notice indicates that the staff of the SEC is considering recommending that the SEC bring a civil injunctive action against MBIA alleging violations of federal securities laws 'arising from MBIA's action to retroactively reinsure losses it incurred from the AHERF bonds MBIA had guaranteed, including, but not limited to, its entering into excess of loss agreements and quota share agreements with three separate counterparties.'

A resolution of the SEC investigation that does not result in a financial assessment that would exceed MBIA's existing excess capital position is not expected to affect MBIA's 'AAA' IFS rating. Material fines or penalties that exceed excess capital could potentially have ratings consequences.

In addition to the SEC investigation, MBIA also remains subject to separate investigations by the New York State Attorney General's Office and the U.S. Attorney's Office for the Southern District of New York. MBIA has indicated that it is fully cooperating with these regulatory bodies and is actively working towards a resolution of their investigations. Fitch remains in frequent dialogue with MBIA, and developments with respect to these investigations will factor into Fitch's ongoing general review of the company.

The following ratings remain unchanged by Fitch:

MBIA Insurance Corp.

MBIA UK Insurance Limited

MBIA Assurance, S.A.

MBIA Insurance Corp. of Illinois

Capital Market Acceptance Corp.

-- Insurer financial strength 'AAA'.

MBIA Inc.

-- Long-term debt 'AA'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.