Sector Snap: Bond and Mortgage Insurers Wednesday April 23, 1:42 pm ET Shares of bond and mortgage insurers plunge on report of Ambac loss
NEW YORK (AP) -- Shares of bond and mortgage insurers plummeted Wednesday after Ambac Financial Group Inc. reported a steep loss for the first quarter, stirring worries about how badly the credit crisis will crimp the beleaguered industries. ADVERTISEMENT
Ambac Financial, a bond insurer based in New York, reported a $1.66 billion loss for the first quarter. The company has lost $5.3 billion in the past nine months.
Stung by lack of liquidity and bad credit, a portfolio of credit contracts lost $1.73 billion in value during the quarter. Ambac also set aside $1 billion to cover claims and payments on insurance contracts.
Banc of America Securities analyst Tamara K. Kravec expected a provision of just $150 million.
Demand for many kinds of bonds has diminished from the credit markets, especially bonds deriving their payments from mortgages.
Kravec said Ambac, which has been downgraded by Fitch Ratings, is at risk of further downgrades and may have to raise cash by selling stock or bonds.
Ambac's stock plunged $2.38, or 39 percent, to $3.65 in early afternoon trading and have tumbled 76 percent in 2008. Ambac's shares touched as low as $3.47, a record low. In Ambac's 17-year history as a publicly traded company, the stock never traded at lower than $8 until this year.
The company's loss, which was far steeper than analysts' polled by Thomson Financial expected, shows demand for risky debt in the credit markets has not picked up.
The report of the loss dragged other bond insurers lower. Shares of Ambac's biggest rival, MBIA Inc., sank $4.01, or 30.2 percent, to $9.27. Shares of Security Capital Assurance lost 19 cents, or 19.2 percent, to 80 cents.
Even shares of Assured Guaranty Ltd., a bond insurer with much less exposure to mortgage credit than its industry rivals, slipped $1.41, or 5.5 percent, to $24.20. Kravec on Tuesday cut her earnings estimates for Assured Guaranty, saying the company may incur losses on home-equity lines of credit.
The report also yanked down prices for mortgage insurance stocks. MGIC Investment Corp.'s shares fell $1.45, or 10.9 percent, to $11.90; shares of PMI Group Inc. sank 30 cents, or 5.8 percent, to $4.91; and shares of Radian Group Inc. fell 28 cents, or 5.6 percent, to $4.75.
Watching this for another flip.
Keep an eye on these also...
ABK AGO MBI PMI RDN TGIC ACAH
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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SECURITY CAPITAL ASS(NYSE: SCA) After Hours: 1.04 0.01 (1.31%) as of 7:07PM ET on 04/29/08 Last Trade: 1.0266 Trade Time: 4:00PM ET Change: 0.0866 (9.21%) Prev Close: 0.94 Open: 0.96 Bid: N/A Ask: N/A 1y Target Est: 1.67 Day's Range: 0.9400 - 1.1200 52wk Range: 0.48 - 34.58 Volume: 2,136,563 Avg Vol (3m): 1,288,560 Market Cap: 67.02M P/E (ttm): N/A EPS (ttm): -19.09 Div &
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
Remember to cover or take profits when recent highs are challenged - don't trade on the fade (near top people sell causing the stock to "fade" down - don't get caught holding the bag). jmho.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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SECURITY CAPITAL ASSURANCE LIMITED Earnings Conference Call (Q1 2008) Scheduled to start Fri, May 9, 2008, 8:30 am Eastern
Check back at the scheduled start time for the audio link to appear in this spot. Add This Event To Your Yahoo! Calendar
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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Report: Insurers face $3.35 billion in claims for 1Q Tuesday April 29, 12:58 pm ET ISO reports insurers face $3.35 billion in claims for damage in the 1st quarter
NEW YORK (AP) -- Insurers face the most claims in a decade from damage caused in the first quarter because of severe weather and an explosion at a sugar refinery, an industry group reported Tuesday. The Insurance Services Office reported it expects insurers to pay $3.35 billion in claims submitted in the first quarter.
Nine catastrophes -- or events each causing more than $25 million in damage -- forced claims during the quarter, two more than the first quarter last year and triple the number in 2001 and 2002.
An explosion at a sugar refinery in Georgia prompted workers compensation claims in February, ISO said.
Eight other claims stemming from destructive weather generated 615,000 claims in seven states.
The biggest losses were in Georgia, Tennessee, California, Texas and Arkansas, ISO said.
The costliest event of the quarter was an outbreak of severe weather in early February that caused $955 million in damage. http://biz.yahoo.com/ap/080429/insurers_report.html?.v=1 SCA wasn't targeted for this release but still may be affected by it.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
HEY Tex, wanna move this to the nasdaq, amex, nyse thread?
Cheers
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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Thinkin of putting TMA in the same boat as SCA. TMA finished at .89 with a low of .71.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
Security Capital Assurance (SCA, $0.78, -$0.04, -4.88%) said Chief Financial Officer David Shea is leaving the struggling bond insurer to pursue other opportunities. He will be replaced by Elizabeth Keys, the current head of financial planning and analysis at Security Capital, the company added.
Could see a decent dip. we'll see.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
Ripplewood considering starting bond insurer-paper Wed May 28, 2008 11:20am EDT
NEW YORK, May 28 (Reuters) - Private equity firm Ripplewood Holdings is considering starting a bond insurer to compete with industry leaders such as Ambac Financial Group (ABK.N: Quote, Profile, Research) and MBIA Inc (MBI.N: Quote, Profile, Research), the New York Post reported on Wednesday.
Ripplewood would look to raise $1.5 billion to launch the effort, according to the report. Discussions regarding launching a bond insurer are in early stages and a deal may never get off the ground, the newspaper said, citing an unnamed source.
Ripplewood would be entering an industry whose future is uncertain. Many bond insurers are reeling after guaranteeing repackaged subprime mortgages and other risky securities that have headed south, or are expected to.
The percentage of municipal bonds insured has declined over the last year, and some investors are questioning whether it makes sense to accept lower returns on a bond in exchange for insurance.
Meanwhile, new, well capitalized competitors like Warren Buffett's Berkshire Hathaway Assurance Corp, a unit of Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research)(BRKb.N: Quote, Profile, Research), are winning bond insurance business.
Ripplewood is looking at whether it is worth spending the time to set up a business that can be a consistent cash-flow generator but can otherwise be a low-return operation, the New York Post said.
Ripplewood declined comment. (Reporting by Dan Wilchins, additional reporting by Megan Davies; editing by John Wallace)
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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