Standard & Poor's changed some of its ratings for National Public Finance Guarantee Corp., the municipal bond insuring subsidiary of MBIA. S&P affirmed the financial strength rating of National at BBB and lowered the standalone credit profile to A from A-plus.

There is currently litigation challenging MBIA's 2009 split into National Public Finance Guarantee Corp. and MBIA Insurance Corp. "If the litigation is adverse to the companies, National might need to support MBIA Insurance Corp.'s capital, which would place significant downward pressure on the rating," said S&P credit analyst David Veno.

"If the litigation is resolved favorably and National remains a separate legal entity and maintains the assumed book of business and capital, we could raise the rating on National to its stand-alone credit profile," S&P stated in a press release.

MBIA Insurance Corp. is currently rated B with a negative outlook.

"S&P's rating of National reflects the application of their new criteria and the impact of ongoing litigation," said Kevin Brown, spokesman for MBIA and National. "We continue to be focused on resolving this litigation, achieving the highest ratings available and reestablishing National as a leader in the public finance insurance business. S&P also reaffirmed MBIA Insurance Corp.'s rating, and we remain confident that it has adequate resources to meet all of its expected obligations."

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