MBIA Inc., parent company of the market’s largest bond insurer, yesterday debuted its plan to boost capital. Fitch Ratings said the plan will “effectively address” the company’s current shortfall, though MBIA also listed $737 million in new reserves to prepare for losses it expects to suffer from its exposure to the souring mortgage market.

MBIA plans to sell $1 billion of surplus notes, cut its quarterly dividend to 13 cents per share from 34 cents, and reinsure enough of its book to free up another $50 million to $150 million, according to filings submitted to the Securities and Exchange Commission. The insurer speculated that its dividend cut would save it $80 million each year and that it would free up about $300 million to $500 million of capital by slowing its new business production in the fourth quarter.

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