The Wall Street Journal-20080131-Warburg Injects --36-500 Million in MBIA

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Warburg Injects $500 Million in MBIA

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Bond insurer MBIA Inc. said it has closed a deal with Warburg Pincus LLC in which the private-equity fund agreed to buy $500 million worth of the bond insurer's shares at $31 each.

MBIA shares were at $13.96, down $2.02, or 13% yesterday in 4 p.m. New York Stock Exchange composite trading. The Armonk, N.Y., company also said two Warburg managing directors, David A. Coulter and Kewsong Lee, will join the MBIA board.

MBIA has been pressured by the major rating firms to raise capital to absorb higher-than-expected losses.

The $500 million Warburg investment, which gives the firm 16.1 million warrants to buy MBIA common shares, is half of a previously announced $1 billion commitment.