MBIA Inc. is asking bondholders to shield it from being dragged into bankruptcy by the insurance company's unit that backed some of Wall Street's most toxic debt securities, Bloomberg's Bankruptcy & Restructuring Brief reported yesterday. MBIA wants to change bond indentures that accelerate payments under a cross-default provision with cash-strapped MBIA Insurance Corp., replacing that unit with its more stable municipal bond insurer National Public Finance Corp. Subbing in National re- moves “the direct link between a rehabilitation or liquidation proceeding of MBIA Corp. and a company bankruptcy,” MBIA said.
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