LCCCA Bond Investment in Jeopardy

When the Lancaster County Convention Center Authority sold $25 million in construction bonds, it invested that money with a public bond insurer.

"With an amount that large, you don't simply have it sitting around in the bank," Finance Committee Chair Laura Douglas said.

The Authority's funds are invested with a financial management group called MBIA.

On June 19, however, the Moody Investor's Service downgraded MBIA's "insurance financial strength rating from Aaa to A2 on its Asset/Liability Management Business (ALM)."

Under the terms of an agreement between LCCCA and MBIA, the latter has until July 7th to collateralize on the Authority's investment, or the Authority will withdraw its funds.

The Authority passed a resolution at their full board meeting, Thursday night, permitting their Executive Director, Kevin Molloy, to do just that - to withdraw the Authority's funds from MBIA, Inc. if it does not collateralize on the funds by July 7.

In a Press Release dated June 20, MBIA, Inc. assures its investors that it has the resources to protect their investments.

MBIA, Inc. (NYSE: MBI) closed Thursday at $4.39, down from a 52-week high of $68.98 in October 2007.