MBIA CEO says no new capital needed

NEW YORK (Reuters) - MBIA Inc's (MBI.N) CEO, in a letter to investors on Tuesday, maintained the bond insurer does not need to raise new capital and advised that its first-quarter results would reflect new estimated values for assets hit by the credit crunch.

The letter from MBIA Chairman and Chief Executive Jay Brown comes a week before the insurer, which finds its triple-A credit rating threatened by its exposure to subprime mortgage securities, reports quarterly results.

"I will repeat what I said in my first week back: I see no need to raise dilutive equity capital to support our existing business plans," Brown wrote. "While I believe the long-term opportunities for our business remain strong, in my view we have adequate equity capital to get through this crisis and it makes no economic sense to our current owners to raise equity capital at today's price levels."

MBIA, he added, continues to underwrite new business and expects to increase market share if all rating agencies were to restore its "stable" credit ratings.

"Contrary to public reports, we have written new business in both our insurance operation and in asset management during the first quarter," he wrote.

Brown said MBIA would not immediately deploy the $1.1 billion raised in a February offering until it decides on how it will structure the company and boosts capital levels in its insurance unit. For now, he said MBIA's insurance and asset-management units have ample liquidity.

Brown, who returned to the company as part of a management shake-up, said MBIA's outlook assumes debt markets will return to more normal conditions by the end of this year and that U.S. housing prices will bottom out in the second half of 2009 at a level about 10 to 15 percent below today's values.

"While there are some signs that the rate of deterioration is beginning to slow, it is way too early for us to say with any certainty that this trend will continue and what will be the ultimate outcome," he said.

(Reporting by Joseph A. Giannone; Editing by Braden Reddall)