Fitch fires back at MBIA

The battle between Fitch and MBIA (MBI) has taken another twist. The rating agency’s CEO, Stephen Joynt, responded this week to MBIA’s recent request that Fitch withdraw its insurer financial strength rating on MBIA and some subsidiaries. MBIA said Friday that Fitch’s model differs from those of Moody’s and S&P, a discrepancy that could confuse investors. But Joynt asks what the company’s real motivation is, given that the other rating agencies recently reaffirmed MBIA’s triple-A rating, while Fitch is considering a possible downgrade.

“Your conflicting views lead me to question whether it is the Fitch capital model, rating process or fees that you object to or rather is it that you are aware we are continuing our analytical review and may conclude that, in our view, MBIA’s insurer financial strength is no longer ‘AAA,’” Joynt writes in a letter dated Monday. “I believe the central issue is MBIA’s financial strength and the value of your insurance policies to investors, not the value of an IFS rating. It seems an unusual first step in attempting to rebuild MBIA’s reduced credibility with investors to limit information, decrease transparency and restrict ‘informed opinions’ (which I believe Fitch has) just because we may not conclude that MBIA is a ‘AAA’ company.”