MBIA's rating slashed to deep junk status, litigation worries continuesOn Thursday, June 25, bond insurer MBIA's (MBI) senior debt rating was lowered by Moody's Investors Service to Ba3 -- three levels below investment grade -- from Ba1. The downgrade cited expectations of further portfolio deterioration due to its exposure to risky mortgage-backed securities coupled with the uncertainties associated with the ongoing litigation over the company's restructuring that happened last February.Moody's also changed the rating outlook of MBIA Insurance Corp. to negative. Additionally, Moody's affirmed the investment-grade Baa1 rating of National Public Finance Guarantee Corp., MBIA's dedicated municipal-bond insurance company.Investors and world's 18 largest banks, including JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) have sued MBIA, claiming a fraudulent restructuring in February this ...