MBIA's surplus notes plunge to 80 cents on dollar

NEW YORK, Jan 17 (Reuters) - MBIA Insurance Corp's recently issued $1 billion of surplus notes plunged on Thursday to about 80 cents on the dollar, down from 90 cents on Wednesday, according to an analyst.

The notes, issued by the insurance arm of MBIA Inc (MBI.N) at a yield of 14 percent, are now trading at a yield of about 20 percent, according Justin Monteith, market analyst at high-yield research firm KDP Investment Advisors. Insurers' debt was battered on Thursday after Moody's Investors Service put Ambac Financial Group (ABK.N) on review for a downgrade and said it was evaluating other bond insurers' ratings because of market stresses. (Reporting by Dena Aubin; Editing by Dan Grebler)