Bond insurer MBIA (NYSE: MBI) said hedge fund founder William Ackman's proposal for a restructuring of U.S. bond insurers is no more credible or viable than his flawed open-source model, The Wall Street Journal reported [subscription required]."Like Mr. Ackman's open-source model, his statements in the media and the barrage of letters he has sent to regulators and the rating agencies -- which contain half truths, innuendo and faulty analysis -- this proposal is simply a continuation of Mr. Ackman's campaign to profit from his short positions and credit default swaps in the bond insurance industry," MBIA said. MBIA added that it is continuing to work with New York State Superintendent of Insurance Eric Dinallo and his advisers to evaluate options for maintaining the highest rating for its policyholders.
Furthermore, MBIA, the nation's largest bond insurer, said it agrees with a spokesman for the New York Insurance Department who said Ackman's proposal would split the company and likely lead to a substantial downgrade for the structured side.
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