MBIA Inc. yesterday closed on its transaction to reinsure a $166 billion portion of Financial Guaranty Insurance Co.'s $200 billion public finance book, following the New York Insurance Department's approval of the deal last week, the companies announced yesterday.

MBIA will receive unearned upfront premiums of approximately $639 million, net of a ceding premium paid to FGIC. The premiums will be placed in a trust immediately and released to MBIA when either MBIA Insurance Corp.'s A2 rating is removed from review for a downgrade or the passing of ninth months, as required by the New York Insurance Department. Moody's Investors Service placed MBIA Insurance's A2 rating on review for downgrade Sept. 18.

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