We now have Ambac (ABK), Assured Guarantee (AGO) and now MBIA (MBI) handily beating estimates.
MBIA (MBI), the holding company for MBIA Insurance Corporation, today reported a net loss of $706.4 million, or $3.37 per share, for the first half of 2008, compared with net income of $410.4 million, or $3.07 per share, during the same period in 2007. For the second quarter, net income was $1.7 billion, or $7.14 per share, compared with $211.8 million, or $1.61 per share, for the same period of 2007. Net income in the quarter was driven primarily by unrealized gains on insured credit derivatives, which totaled $3.3 billion on a pre-tax basis. The majority of the unrealized gain was the result of a substantial widening of credit default swap spreads on MBIA Insurance Corporation during the second quarter. The Company did not materially alter its projection of ultimate loss on mortgage-related exposures. As a result, loss reserves had an insignificant impact on net income.
Net income was also affected by $742 million of pre-tax realized losses resulting from the rebalancing of the asset/liability portfolio in the Company’s Asset/Liability Management (ALM) business. The $742 million in realized losses consisted of $306 million on asset sales related to the rating downgrades of MBIA Insurance Corporation during the second quarter and $436 million of impairments on assets sold or that are expected to be sold in the third quarter to further enhance liquidity in the ALM business.
After-tax operating loss, a non-GAAP measure that excludes the effects of timing-related gains and losses (all non-GAAP measures used herein are defined in the attached Explanation of Non-GAAP Financial Measures), for the first half of 2008 was $339.4 million, or $1.62 per share, compared with after-tax operating income of $408.1 million, or $3.05 per share, for the first half of 2007. After-tax operating income for the second quarter of 2008 was $228.9 million, or $0.96 per share, compared with after-tax operating income of $206.9 million, or $1.57 per share in the same period of 2007.
Here is a quick video on it:
It appears the worst is over for the bond insurers. This isn’t to say it will not be a bumpy ride but their extinction is not in the cards…..
Disclosure (“none” means no position):None
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One reply on “MBIA Completes Bond Insurer Trifecta”
I have already begun dipping my big toe in a couple of the bond insurers. I call it the Templeton approach.