MBIA is Creating a Separate Public Finance Bond Insurance Division

MBIA is reorganizing

Bond insurer MBIA Inc. started a public finance-only financial-guarantee insurance company, which will operate only in the U.S., as part of its restructuring plan.

The company’s beaten-down shares jumped 15% at $4 in premarket trading. The stock is off 72% in the last year.

Late last year, Moody’s Investors Service cut its debt ratings on MBIA to junk status, citing its exposure to losses on U.S. mortgages and problems in the bond-insurance …