Huge Loss for MBIA in First Quarter
MBIA reported today an unexpectedly large first-quarter loss, hit by a loss on revenue of $2.96 billion as the on-paper value of insured derivatives plunged.
The bond insurer said its net loss was $2.4 billion, or $13.03 a share, in the three months ended March, compared with a profit of $198.6 million, or $1.46 a share in the year-ago period. Analysts, on average, predicted a loss of 11 cents a share.
The company said results included $3.6 billion unrealized losses on insured derivatives.
MBIA "has received subpoenas or informal inquiries from a variety of regulators, including the SEC, the Securities Division of the Secretary of the Commonwealth of Massachusetts, and other states’ regulatory authorities, regarding a variety of subjects," MBIA said in a statement.
MBIA has raised more then $2.5 billion of capital from investors to help offset those losses and has taken other measures to boost capital, such as eliminating its dividend.
Earlier this month, MBIA Chairman and Chief Executive Jay Brown wrote to investors that he saw no need to "raise dilutive equity capital to support our existing business plans."
Published on May 12, 2008
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