MBI Surges on Restructuring

MBIA Inc. (MBI) announced today that it has established a new U.S. public finance financial guarantee insurance company, giving the bond insurer a new entity dedicated exclusively to the U.S. public finance market. The move is part of the company's goal to separate its municipal business from its structured finance business.

Investors obviously liked the move as MBI is the best-performing S&P 500 company today, with shares surging 35%.

Specifically, MBI transferred stock of MBIA Insurance Corp. of Illinois to a newly established intermediate holding company dubbed National Public Finance Guarantee Corporation. It will operate as a subsidiary of MBIA Corp.

"We believe this new business model will not only preserve the interests of both our public finance and structured finance policyholders and enhance the value for our shareholders, but will benefit the U.S. public finance markets as well," stated MBI CEO Jay Brown.

While the surge in its share price is welcome, it's unclear whether this restructuring will improve the company's Zacks #3 Rank ("hold").

Read the full analyst report on MBI