National Public Finance, indirect unit of MBIA, names William Fallon as interim CEO

National Public Finance names Fallon interim CEO

ARMONK, N.Y. — National Public Finance Guarantee Corp. on Tuesday named William C. Fallon as its interim chief executive officer.

Fallon will take the place of Thomas G. McLoughlin, who is resigning effective July 23 and moving to UBS Financial Services.

McLoughlin has led the subsidiary of bond insurer MBIA Inc. since its formation in February 2009.

Fallon is currently president and chief operating officer of MBIA. He joined the company in 2005, and was previously a partner at McKinsey & Co.

National Public Finance said the executive change “does not affect the company’s intention to re-engage in the U.S. municipal bond insurance business once the litigation challenging the establishment of National has been resolved.”

The subsidiary was formed in early 2009 to handle guaranteeing public finance debt, or bonds issued by local governments to fund public works projects such as building new schools or improving sewer systems.

The move was intended to separate that business from MBIA’s riskier operations, particularly securities backed by mortgages, which helped sink the company when the housing market collapsed. Certain policy holders have sued, claiming that the split involved fraudulent movement of company assets.

Shares of MBIA rose 62 cents, or 9.6 percent, to $7.05 in afternoon trading, after a top fund manager disclosed that he has purchased a large stake in the company.