MBIA bets it can keep AAA rating

MBIA Corp. (NYSE: MBI) remains confident that it can keep its AAA ratings and brushed aside suggestions by hedge fund investor William Ackman that it's on shaky financial ground.

"Our anticipation in response to the turn in the market has been singular among the monoline insurers, putting us in the best position to maintain our AAA ratings among the large public companies," The Wall Street Journal quotes CEO Gary Dutton as saying.

Those bullish comments were enough to give a lift to MBIA's shares, which are down almost 80% over the past year, along with rival Ambac Financial Corp. (NYSE: ABK), down almost 87% for the year. For now, the market ignored the $2.3 billion fourth quarter loss which included a whopping $3.5 billion in write down in its credit derivatives portfolio.

Ackman, who is pledging his short-selling profits to charity, argues that the Armonk, NY-based company faces losses of $11.63 billion from asset-based securities nearly equal to the $11.61 billion losses looming at Ambac. MBIA , which says it's on track to raise $2 billion, scoffs any suggestions that it may be insolvent. CFO Chuck Chaplin told the paper that it has enough capital for the next six years.

Is this a sucker's rally or the real deal?