MBIA Posts $2.4 Billion Loss for 1st Quarter

[Mister K]

Source: New York Times

MBIA, the biggest player in the troubled bond insurance industry, said Monday that it lost $2.4 billion for its first quarter, as the credit crisis continued to roil the subprime-based instruments that the company had insured.

The figure, which amounts to a loss of $13.03 a share, is a stark reversal from the $198.6 million and $1.46 per share in net income MBIA earned at the same time last year.

Driving the loss was a $3.6 billion unrealized loss on credit derivatives that the company had insured, which includes $800 million of credit impairments.

MBIA and other bond insurers like Ambac Financial have taken fire over recent months for insuring collections of subprime mortgages, giving such instruments the sheen of triple-A rated securities. As mortgage default rates rose, however, bond insurers found themselves taking on greater and greater exposure to potential losses.

Read more: http://dealbook.blogs.nytimes.com/2008/05/12/mbia-posts-24-billion-loss-for-1st-quarter/?ref=business