MBIA Insurance, the insurance subsidiary of New York-based MBIA, has acquired the 83% of Channel Re Holdings and Channel Reinsurance that it did not previously own for $40m.
Channel Re is a financial guarantee reinsurer founded in 2004, which assumed business only from MBIA and its affiliates.
MBIA has said that it is planning to commute all of its reinsurance with Channel Re and liquidate the company in the third quarter of 2010.
The transaction is expected to result in an increase in MBIA’s statutory capital and will be accretive to its liquidity position.
MBIA is a holding company whose subsidiaries provide financial guarantee insurance, fixed-income asset management, and other specialized financial services. The company services its clients around the globe, with offices in New York, Denver, San Francisco, Paris, London, Madrid, Mexico City and Sydney.