MBIA Inc., the biggest insurer of municipal bonds, said Friday it has agreed to buy an insurer of asset-backed securities for $607 million in stock.

The deal for Capmac Holdings Inc. is scheduled to close in the first quarter.

Capmac, formerly part of Citicorp, insures investors from deterioration in securitized assets or defaults on issuers' obligations.

MBIA said in a press release that it expects to take a one-time charge in connection with the deal, but did not disclose the amount. The deal is expected to add to MBIA's earnings in 1998.

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