1:00PM New York – MBIA stock rebounded in the afternoon trading after comments from the management and lifted market sentiment.

MBIA (MBI: chart) reported fourth quarter net loss of $2.3 billion on write-down in its credit derivatives portfolio.

Fourth quarter revenue for direct premium declined 38% to $262 million from $412 million from a year ago on a sharp decline in structured finance revenues. For the year 2007 direct premium rose 45% to $1.49 billion from a year ago.

Earnings per share in the year fell to a loss of $15.22 from a profit of $5.99 per share. For the quarter earnings per share fell to a loss of $18.61 from a profit of $1.32 a year ago.

The press release explained the losses resulting from CDO and other leveraged loans.

The decline in net income for the year was primarily due to the previously announced pre-tax net loss which amounted to $3.5 billion, or on an after-tax basis, $2.3 billion or $18.04 per share, on financial instruments at fair value (“mark-to-market”) and foreign exchange. Significantly wider spreads and ratings downgrades of securities backing Collateralized Debt Obligations during the fourth quarter adversely affected the mark-to-market valuation of the Company’s insured credit derivatives portfolio. As MBIA previously announced on January 9, 2008, the Company estimates a credit impairment of $200 million included in the pre-tax net loss of $3.5 billion on its insured credit derivatives portfolio for three CDO-squared transactions on which the Company expects to incur actual losses in the future.

Gary Dunton, MBIA Chairman and Chief Executive Officer, said, “We are disappointed in our operating results for the year, as the performance of our insured prime, second-lien mortgage portfolio and three insured CDO-squared transactions led to unprecedented loss reserving and impairment activity. The effect of these reserving and impairment activities on our capital position will be more than offset by the successful completion of our capital plan, which will increase our capital position by well over $2 billion.

We have raised $1.5 billion to date through our $1 billion surplus notes offering and the Warburg Pincus’ $500 million investment in MBIA common stock, which closed yesterday. Additionally, we have a commitment from Warburg Pincus to backstop a $500 million rights offering, and we are considering this and other steps to raise equity.

We believe that these steps, along with reduced capital requirements resulting from slower business growth, will result in our capital position surpassing rating agency Triple-A requirements as currently articulated and will allow us to continue serving the needs of our clients and investors.”