there it is "Fitch's coverage of the underlying credit quality of the transactions that MBIA insures is limited, and in turbulent times, the impact of this difference becomes significant, raising the risk of misinterpretation." http://investor.mbia.com/phoenix.zhtml?c=88095&p=irol-newsArticle&ID=1116614&highlight= misinterpretation?whom are they to judge if those models are correct?last time I checked it was this corporate executives that got the company in this mess, now they feel that they can cherry pick ratings models because they know so much about CDOs
Fitch says will keep rating on bond insurer MBIA Mon Mar 24, 2008 1:08pm EDT .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 On Monday, MBIA said the nonpublic information that Fitch has soon will become out of date "and public information alone will be insufficient to maintain the ratings."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money market funds hold securities rated by Fitch based on MBIA insurance and may be forced to sell if the rating is withdrawn, the agency said.
TMA Thornburg Mortg $1 bln convertibles offering lacks appeal for buyers - DJ (1.27 ) gotta love how a $1b surplus note offering from a company with history of fraud and mistakes had investors flocking all over them(mbia) and tma whose huge portfolio of mortgages in california and other bubbly areas had virtually no losses so far wont get a dime and will be bankrupt. only in wall street
Bond Insurer FGIC Falls Below Key Regulatory Capital Level Wednesday March 26th, 2008 / 17h33 By Lavonne Kuykendall Of DOW JONES NEWSWIRES CHICAGO -(Dow Jones)- After setting aside just over $800 million to pay expected subprime mortgage-related losses, troubled bond insurer FGIC Corp. says it has fallen below legally required statutory capital levels, which means it must come up with a plan to raise money or face stringent consequences, the company said Wednesday. If its plan fails to meet regulatory approval, "the Superintendent of the (New York State Insurance Department) has discretion to take various remedial actions, including suspending FGIC's ability to write new policies and seeking an order to place FGIC under regulatory control," FGIC said in its 2007 financial statement, which it released Wednesday. As its situation has deteriorated over the last few months, FGIC has already voluntarily stopped writing new insurance policies, and has applied to the regulator for permission to split itself into separate municipal and structured finance bond insurers. The move is seen as a way to protect what are considered less risky municipal bonds from securities structured and sold by investment banks and backed by consumer and commercial loans. That move came as its largest shareholder, PMI Group Inc. (PMI), which owns a 42% share, said that it will not be contributing any capital to prop up FGIC. Other owners are the Blackstone Group LP (BX), The Cypress Group LLC, and CIVC Partners LP. The group acquired FGIC from a General Electric Corp. (GE) subsidiary in 2003. GE retains 5% ownership to PMI's 42%, Blackstone and Cypress has 23% each and CIVC owns 7%. A PMI spokesman said Wednesday that the company will consider whether to write off the $103 million that remains of its original $900 million investment in FGIC during the first quarter. PMI has already written down $776.1 million after-tax of that investment in the fourth quarter. In its financial report, New York-based FGIC outlined the continuing problems it is having with credit derivatives it wrote on subprime mortgage-backed collateralized debt obligations or CDOs, complex securities that have seen skyrocketing losses in the past six months. FGIC lost $1.89 billion in the fourth quarter mostly because of a $1.71 billion so-called mark-to-market loss on that credit derivatives portfolio. Bond insurers have argued that mark-to-market losses represent changes in the market value of their derivatives and are likely to largely reverse themselves over time. But FGIC and other bond insurers have reported growing expectations that the on-paper losses will turn into actual payments. For FGIC, 2007 loss reserves of $800.3 million represents its estimate of how much it expects to pay out. It warned that the number could rise even more if the securities continue to deteriorate. FGIC's financial strength rating has been cut by all three of the major ratings agencies, and Standard & Poor's said Friday that it was putting its rating on CreditWatch with negative implications, from CreditWatch with developing implications, which could mean more downgrades are coming. Even at the $800 million level, the reserves "substantially reduced FGIC's statutory capital and surplus position," the company said in its financial report. The reduction pushed it above aggregate as well as single risk limits set by New York. The company said it has cash on hand to pay its obligations for "at least the next 12 months." FGIC's qualified statutory capital dropped to $836.7 million at the end of 2007, down from $2.4 billion the year before. The regulator could restrict its ability to pay cash dividends to its holding company, which could affect FGIC's "ability to meet its cash needs," the company said. CreditSights Inc. analyst Rob Haines estimated that FGIC needs to raise around $2 billion to get itself out of trouble, which could be a difficult task to pull off. "PMI is going to have to write FGIC off to zero unless there is someone who is willing to step in an inject money," Haines said. "They will need to get their house in order. Shares of bond insurers and mortgage insurers both traded down recently, with PMI Group down the most of the mortgage insurers, off 7.1% recently to $6.46. -By Lavonne Kuykendall, Dow Jones Newswires; 312-750 4141; lavonne.kuykendall@dowjones.com
MBIA Loses AAA Insurer Rating From Fitch Over Capital (Update2) By Emma Moody April 4 (Bloomberg) -- Fitch Ratings cut MBIA Inc.'s insurance rating to AA from AAA, saying the bond insurer no longer has enough capital to warrant the top ranking. MBIA, the world's largest bond insurer, would need as much as $3.8 billion more in capital to deserve an AAA, New York- based Fitch said today in a report. The outlook is negative, Fitch said. Fitch issued the new, lower rating even though Armonk, New York-based MBIA asked the ratings company last month to stop assessing its credit worthiness. The two companies disagree over how much capital MBIA needs to absorb losses on the bonds it insures. ``It will be difficult for MBIA to stabilize its credit trend until the company can more effectively limit the downside risk'' from collateralized debt obligations, Fitch said in the report. MBIA's long-term rating was cut to A from AA, Fitch said. ``We respectfully disagree with Fitch's conclusions,'' MBIA Chief Financial Officer Chuck Chaplin said today in a statement. ``MBIA has a balance sheet that is among the strongest in the industry with over $17 billion in claims-paying resources, and has a high quality insured portfolio.'' Capital Raising MBIA raised $2.6 billion in capital through a bond offering and the sale of a stake to Warburg Pincus LLC, eliminated its dividend and stopped guaranteeing asset-backed securities for six months. Those decisions prompted Moody's Investors Service and Standard & Poor's to affirm their top ratings for MBIA. Fitch continued its review. MBIA last month asked Fitch to stop rating the company because it disagreed with the ratings company's requirement that MBIA hold more capital. MBIA, which started as the Municipal Bond Insurance Association in 1974, and the rest of the bond insurers stumbled after expanding into CDOs that caused losses of more than $7 billion. CDOs repackage pools of assets into securities with varying degrees of risk. The company previously recorded at least 15 years of consecutive profits insuring bonds sold by schools, hospitals and municipalities. MBIA's suspension of its structured finance business, which includes CDOs and asset-backed securities, may help to boost the company's rating back to AAA in the future, Fitch said today. MBIA will have losses on CDOs backed by subprime mortgages of as much as $4.9 billion after taking into account that they will be paid over time, Fitch said. The analysis assumes that subprime mortgages backing securities sold in 2006 will experience losses of 21 percent and those originated in 2007 will lose 26 percent, Fitch said. Subprime mortgages are given to borrowers with poor credit.
"Ambac's new business slumped 87 percent last quarter, and the company increased its estimate of the claims it will need to pay on home-loan debt by $2 billion." wow what a huge surprise, the management estimate of losses was too low, wonder how much marty whitman is puking right now http://www.bloomberg.com/apps/news?pid=20601087&sid=ak.p2C4fDS.c&refer=home
ABK is virtually bk and won't be able to meet obligations yet the market is up 100 points. I guess everyone knows Uncle Sam will print more money to cover everyone. Financial markets have become a joke of epic proportions. I am staking my career on a market hangover of epic proportions. This market is like a drunken frat boy driving his Daddy's Porsche down the highway with no headlights. I'm loaded up on May and June puts.
I think if ABK goes BK the dow could easily rise to 13k, thats how an irrational market works these days, the more writedowns the higher the markets go, the federal reserve will always step in and save wallstreet....
If a nuke hit the exchange we would see the Dow hit 20K since the PPT's little "market stability server" would keep chugging away on the buy side but there would be no traders alive to sell!!?!? Good thing they keep that server in a bunker.
ACA Capital Forbearance Extended until May 30, 2008 these guys will hit a new low when the entire news archive and business activity for 2008 will be 'forbearance extensions' http://phoenix.corporate-ir.net/phoenix.zhtml?c=176523&p=IROL-news