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MBIA said on Wednesday it would raise $750 million by issuing new shares, as the largest U.S. bond insurer tries to boost its capital to retain the top credit ratings crucial for its

business. MBIA But the additional capital may not help with rating agency Fitch. On Tuesday Fitch said MBIA's main bond insurance unit could lose its triple-A rating even with new

capital, because the bond insurer is facing such big potential losses after guaranteeing repackaged subprime debt and other complex assets. It will not be easy for MBIA to sell the 50.3

million common shares it aims to issue in the public market. But WARBURG PINCUS, a private equity firm that invested $500 million in MBIA last month, has agreed to make up for any shortfall

in MBIA's target of raising $750 million of capital in public markets. Selling the securities in the public market may not be easy, but it may be possible, said James Ellman, president

of Seacliff Capital in San Francisco, which does not have a position in MBIA . "They don't have to convince everybody to buy the deal, they only have to convince enough people to

buy $750 million shares," Ellman said. JP Morgan Securities and Lehman Brothers are joint book-runners on the stock offering. New York State Insurance Superintendent Eric Dinallo, who

has been working with banks to organize rescues for some of the bond insurers, praised the deal. "This is good progress," he said in a statement. "It's the kind of

transaction we've been discussing and encouraging." Ambac Financial Group , a rival bond insurer, withdrew plans in January to issue at least $1 billion of new equity or

convertible securities, citing difficult market conditions and recent rating agency moves. MBIA, which guarantees $679 billion of debt, has had better luck raising capital. It issued $1

billion of surplus notes and received $500 million from Warburg Pincus last month. But MBIA's main unit is still in danger of losing its top triple A ratings from all three major rating

agencies, who are all reviewing the company's ratings. Warburg Pincus has agreed to buy at least enough MBIA convertible participating preferred stock to make up for any shortfall in

MBIA's efforts to sell $750 million common stock. On top of that, Warburg Pincus may choose to buy another $300 million convertible preferreds. MBIA also said it was reducing by $6.5

million its previously announced $2.3 billion fourth-quarter loss, after boosting a reserve for second-lien mortgages by $100 million and decreasing the size of a write-down.