Fitch says will keep rating on bond insurer MBIA

NEW YORK, March 24 (Reuters) - Fitch Ratings on Monday said it plans to maintain its ratings on MBIA Inc. (MBI.N: Quote, Profile, Research), the world's largest bond insurer, despite MBIA's request to withdraw the rating and decision to withhold nonpublic information.

Fitch is the only one of the three major U.S. credit rating agencies that still has the "AAA" rating of MBIA's insurance arm on review for downgrade.

Fitch said it expects to complete its review in a few weeks, and if the insurer financial strength rating is downgraded, it will likely be no lower than the "AA" category.

Because MBIA has decided to stop providing nonpublic information about its portfolio, however, Fitch said it may not be able to maintain the ratings beyond the next few months.

MBIA said on March 7 it had asked Fitch to withdraw its insurer financial strength ratings for six units, including its main bond insurance arm MBIA Insurance Corp.

MBIA said in a statement at the time that Fitch's rating process differed from those of other agencies, and that in turbulent times, there was a risk of misinterpretation.

On Monday, MBIA said the nonpublic information that Fitch has soon will become out of date "and public information alone will be insufficient to maintain the ratings."

Fitch said maintaining the ratings "is most appropriate for investors and causes the least disruption to the marketplace." For example, several large money market funds hold securities rated by Fitch based on MBIA insurance and may be forced to sell if the rating is withdrawn, the agency said.

(Reporting by Dena Aubin, Editing by Chizu Nomiyama)