Standard & Poor's yesterday announced it had assigned MBIA Insurance Corp.'s AA rating with a negative outlook to credits that MBIA now backs as part of a recent reinsurance deal with Financial Guaranty Insurance Co., which is rated BB on negative watch.

The action does not apply to any variable-rate transactions, "which are under review to determine the impact of the dual ratings," Standard & Poor's said. MBIA earlier this month closed on the transaction, in which it will reinsure $166 billion of FGIC's U.S. public finance book in return for upfront unearned premiums of $639 million.

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