On June 20, 2008, MBIA Inc. (NYSE: MBI) announced that as a result of Moody’s downgrade of MBIA Insurance Corporation’s insurance financial strength rating from Aaa to A2 it expected that it would be required to post additional eligible collateral and fund potential termination payments under its outstanding Guaranteed Investment Contracts (GICs). The Company announced today that following a portfolio rebalancing within its Asset/Liability Management (ALM) business, which included sales of approximately $4 billion of investment assets during the second quarter, it has sufficient eligible collateral and cash to satisfy these additional requirements. As a result of these activities, the Company’s entire remaining GIC portfolio will be fully collateralized, to the extent all GIC holders exercise their right to collateralization. While MBIA continues to buy and sell municipal securities in the ordinary course of managing its insurance investment portfolio, the repositioning activity in the ALM portfolio did not include the sale of municipal securities.

“Contrary to recent statements in the media, MBIA is not in a ’tenuous situation’,” said C. Edward "Chuck" Chaplin, Chief Financial Officer. “Our ability to quickly reposition the assets underlying our ALM business in a difficult market demonstrates the high quality and liquidity of the portfolio. The holders of our insurance policies, GICs, medium-term notes and other debt instruments can rest assured that MBIA will meet its obligations to them as it always has — on time and in full.”

MBIA’s ALM portfolio liabilities declined from $25.1 billion at March 31, 2008 to $24.1 billion at June 27, 2008 through normal amortization of the portfolio. The $24.1 billion balance at June 27 consists of $15.8 billion in GICs, $7.3 billion in medium-term notes (MTNs) issued by MBIA Global Funding, LLC, and $1.0 billion in fixed term collateralized repurchase agreements. Of the $15.8 billion in currently outstanding GICs, $8.3 billion were collateralized prior to Moody’s downgrade of MBIA Insurance Corporation to A2. As a result of the downgrade, of the remaining $7.5 billion in previously uncollateralized GICs, $3.9 billion are now being collateralized and $3.6 billion are now being terminated, assuming in each case that the holders exercise their rights to collateralization or termination.