MBIA Inc. unit MBIA Insurance Corp. fully paid its obligation under a financial guaranty insurance policy that it had issued insuring certain notes issued by Zohar II 2005-1 Ltd.

The policy related to the Jan. 10 sale of its European business to Assured Guaranty Ltd. Assured Guaranty transferred its Zohar notes to MBIA as consideration for the deal.

On Jan. 20, the maturity date of the notes, MBIA Insurance satisfied the insurance claim of about $770 million under the Zohar policy. That total consisted of about $60 million paid from MBIA Insurance's own resources, about $363 million from a financing facility entered into with some of the holders of its 14% fixed- to floating-rate surplus notes and $347 million recorded as an offset to dividend payments MBIA UK Holdings, the European subsidiary sold to Assured Guaranty, paid to MBIA Insurance.