Several Catalysts Lay Ahead Which Could Turn MBIA (MBI) Sentiment Positive

MBIA, Inc. (NYSE: MBI) shares are nearly flat after starting out lower Tuesday.

BTIG noted Monday that peer Assured Guaranty (NYSE: AGO) was seeing recent pressure as investors moved on concerns over the company's exposure in Puerto Rico. While MBIA has similar exposure, investors might be searching for a catalyst that might snap the sentiment.

Analyst Mark Palmer noted that one catalyst that might reverse sentiment is an improved credit rating from S&P, which could move to 'AA' from 'A' for MBIA's National Public Finance Guarantee Corp unit. The analyst commented, Such a rerating would not only pave the way for the unit to begin to write new business for the first time since 2008, but would also serve as an affirmation that its capital levels are robust even when various scenarios involving Puerto Rico are taken into consideration. MBIA might also get its rating moved up from 'BBB' to 'A'.

MBIA might also look for another ratings agency so that it might be able to complete more wholly with peers like Assured.

In November, ResCap's reorganization plan is slated to be approved, which would entail a $796 million payment to MBIA.

Finally, MBIA might also announce commuting about $837 million of remaining exposure in CMBS with underlying collateral rated ‘BBB’ and below at MBIA Insurance Corp. its structured product insurance unit. This exposure is considered worst of the worst for the unit.

Shares of MBIA are up about 0.2 percent.

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