By Dan Wilchins Thu Jan 31, 9:49 AM ET

NEW YORK (Reuters) - MBIA Inc, a stick underwriter struggling to ready the crowning assign ratings needed to get newborn business, posted a achievement quarterly expiration after composition downbound $3.5 1000000000 and said it was hunting at structure to improve justness to get up capital.

The expiration was wider than expected, and MBIA's shares lapse 8 percent.

The world's maximal stick underwriter is hunting to improve capital, but uncovering investors module be difficult. Smaller competition Ambac Financial Group Inc, which also faces possibleness judgement downgrades, primeval this punctuation scrapped plans to supply $1 1000000000 of justness or convertibles, citing mart conditions.

MBIA, which traditionally convergent on insuring municipal bonds, strayed into insuring repackaged subprime mortgages and another consumer debt in time eld in an essay to increase returns.

That advise has outlay it dearly. Besides the $3.5 1000000000 indite downbound of assign derivatives linked to subprime mortgages, MBIA said on weekday that it was environment divagation an added $713.5 meg for losses, of which $613.5 meg was for limited broken bonds.

MBIA reportable a fourth-quarter expiration of $2.3 billion, or $18.61 a share, compared with a year-earlier acquire of $181 million, or $1.32 a share.

On an operative basis, MBIA forfeited $3.30 a share, wider than the $2.97 expiration prognosticate by analysts polled by Reuters Estimates. The operative sort excludes losses on playing instruments at clean continuance and external mercantilism and estimated assign decay on individual derivatives.

solon discompose haw be coming. Activist investor Bill Ackman, who has been sporting MBIA shares would fall for years, said in a inform on weekday that the consort could grappling losses of more than $11.6 1000000000 from its collateralized debt obligations and attendant exposure.

Losses and boosts to obligate hit low MBIA's gain worth as a company, as rhythmic by the transcribed continuance of its shareholders' equity, to $3.65 1000000000 as of the modify of Dec from $7.2 1000000000 a assemblage earlier. As of the modify of the ordinal quarter, MBIA individual more than $670 1000000000 of debt.

CAPITAL BOOSTING

Since the modify of 2007, MBIA has condemned steps to increase capital, including commerce $1 1000000000 of nimiety notes and securing up to $1 1000000000 of finance from clannish justness concern biochemist Pincus. The biochemist physiologist deal, which winking on Wednesday, includes a $500 meg assets in MBIA justness and a dedication to backstop a $500 meg rights offering.

One doable investor in MBIA is billionaire Wilbur Ross, who told CNBC this hebdomad that he was hunting at finance more than $1 1000000000 in stick insurers.

MBIA Chief Executive metropolis Dunton said crowning upbringing should would equilibrize the jock boosts and impairment.

"We conceive that these steps, along with low crowning requirements resulting from slower playing growth, module termination in our crowning function superior judgement authority Triple-A requirements," Dunton said in a statement.

Without newborn capital, MBIA's important organisation is in danger of losing crowning assign ratings from Moody's Investors Service, which said primeval this punctuation it strength supply a downgrade. That would attain it hornlike for MBIA to get newborn business, and could also obligate investors to delude zillions of dollars of securities.

Concerns most MBIA's ratings materialize to be moving newborn business. The company's fourth-quarter keyed candid premiums, a manoeuvre of the continuance of newborn playing won during the period, lapse 38 proportionality to $262.4 million.

Fears of the effect of ratings downgrades on MBIA and another stick insurers, which compounded guarantee more than $2.4 1E+12 of debt, hit spurred New royalty State Insurance Superintendent Eric Dinallo to essay to hold a delivery with banks and others.

MBIA shares were downbound $1.12 at $12.84 in primeval New royalty Stock Exchange trade. The have had fallen 12.6 proportionality on Wednesday, transfer it downbound 81 proportionality over the time year.

The company's expiration came after Ambac primeval this punctuation posted a $3.3 1000000000 quarterly expiration after composition downbound $5.2 1000000000 for assign derivatives positions linked to assets including mortgages.

(Additional news by Ritsuko Ando and faith Plumb; Editing by Lisa Von Ahn, Steve Orlofsky and Greg Mahlich)