MBIA to get $1B reserves infusion

Purchase-based bond insurer MBIA announced last week it will receive a $1 billion cash injection from private equity firm Warburg Pincus to boost reserves.

Warburg Pincus will make an initial investment of $500 million by acquiring 16.1 million shares of MBIA common stock at a price of $31.00 per share, a 3 percent premium to the $30.00 per share closing price on Dec. 7, according to Forbes.

Warburg Pincus will then backstop a shareholder rights offering of up to $500 million during the first quarter of 2008. The private equity firm will also receive warrants to purchase an additional 16.1 million shares at $40 per share over the next seven years.