MBIA Inc. Shuffles Executive Officers to New Posts

MBIA Inc.'s board of directors appointed a number of executive officers to new positions earlier this week as it begins the transformation of its corporate structure that chief executive officer and chairman Jay Brown announced when he rejoined the company earlier this year, according to a filing with the Securities and Exchange Commission.

All the executive officers named already held top positions at the company and those the board did not reappoint will remain officers at bond insurer subsidiary MBIA Insurance Corp. The appointments could mark early steps in Brown's plan to create a more traditional holding company with various operating subsidiaries beneath it, including separate public finance and structured finance firms.

The company wants to complete the separation of the public finance and structured finance operations "as soon as it's feasible but within a five-year period," Brown wrote in a letter to shareholders earlier this year.

As part of the appointments, the board named C. Edward Chaplin president, chief financial officer, and chief administrative officer, expanding from his previous roles as vice president and CFO. Chaplin will remain vice chairman of the company.

The board named William Fallon president and chief operating officer, following his time as vice president and head of the global structured finance division. He had previously served as a vice president and head of corporate and strategic planning.

The board also appointed Clifford Corso to executive vice president and chief investment officer, after he served as vice president, chief investment officer, and head of MBIA Asset Management, a title he will retain. It named Mitchell Sonkin executive vice president and chief portfolio officer from vice president and head of the insured portfolio management division. It named Ram Wertheim executive vice president, chief legal officer, and secretary from vice president, general counsel, and secretary.

Four former executives were not reappointed to executive officer positions of MBIA by the board, but will remain officers at MBIA Insurance Corp., as the parent company begins to split its public finance and structured finance divisions. The executives include Thomas McLoughlin, Kevin Silva, Christopher Weeks, and Ruth Whaley.

Elsewhere, Syncora Holdings Ltd. disclosed in an SEC filing that Edward Hubbard, president and chief operating officer of bond insurer subsidiary Syncora Guarantee Inc., will leave the company in either December or January. He has already stepped down from his position as president and COO, but will remain as chief remediation strategist until he leaves.

Hubbard will continue to work on the company's exposure to the Jefferson County sewer system, its outstanding residential mortgage-backed security exposure, and its efforts to commute its credit default swap exposures. His contact is expected to terminate Dec. 31, but the company could extend it until Jan. 31.

Until that time, Hubbard will continue to receive compensation at his $375,000 annual base salary rate and all other benefits he is entitled to as an officer of the company. In addition to his lump-sum termination payment, paid in two parts, he will receive 24 months of medical coverage and any earned and unpaid compensation and benefits upon his termination.

Syncora entered into an employment agreement with acting chief executive officer, president and general counsel Susan Comparato, which will expire Oct. 30, 2009, automatically renewable each year. She will receive a base salary of $450,000 plus bonus.

Comparato, who had been general counsel, took over as acting CEO and president in August when Paul Giordano announced his resignation the day of the company's second-quarter earnings announcement.

Comparato said during the second quarter earnings conference call that discussions with counterparties to commute $52.9 billion in credit default swaps exposures were Syncora's "primary objective" in the near term. An already extended negotiation period with these counterparties expired last week, but the company has continued the discussions, while saying in an SEC filing it cannot guarantee any further extension or agreement.

Moody's Investors Service Friday downgraded the insurer financial strength of MBIA Insurance Corp. to Baa1 with a developing outlook from A2 on review for downgrade.

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